Trickle down works with irrigation

The trickle down theory has been discredited in economics but it works with irrigation and North Otago Irrigation Company’s decision to extend its scheme will provide a boost for the whole region:

The decision by the North Otago Irrigation Company to expand its scheme is a big Christmas present for the region. David Bruce looks at what it means.

It’s a pun, but the trickle-down from new irrigation in North Otago is evident in all sectors of the community.

And it’s the old story – when farmers are doing well, so is North Otago. When they shut their chequebooks, all North Otago suffers.

The figures for the first stage of the North Otago irrigation scheme, opened in 2006, tell the story, and here comes the second stage.

Our farm and the two immediate neighbours had four houses on them before the first stage of NOIC’s scheme brought water to our valley, now there are 14.

That has been repeated all over the district and the people living in the new houses have dropped the average age by decades.

The company has committed to a second stage which will spread the benefits further.

An economic benefit study in 2010 of stage 1 said it was ”the single most significant economic development” project in the Waitaki district in recent years.

Until then, and before dairy prices boomed, then collapsed, it had created 76 jobs on farms that now earn $44 million a year more than before. Since then, on-farm development has continued.

More people now live in the irrigated area, many of them young families, which had brought community and social benefits such as increased school rolls.

It also contributed to population growth in the district.

Business people in Oamaru can point to very tangible gains through the whole of the economy, not just from a more stable agricultural sector but new businesses and increases in jobs in existing businesses.

These have resulted in demands for all services, from motorcycles to new houses, and new farm service companies, particularly related to irrigation.

That was echoed by Otago Chamber of Commerce North Otago spokesman Simon Berry who was pleased with the decision.

”The benefits will be felt far and wide through the whole community. The knock-on and trickle down (from stage 1) has already been shown to be major,” he said.

In terms of new businesses, the chamber had noticed not only people returning to Oamaru but also coming in to set up new businesses, he said, quoting the Tees St Cafe and Scott’s Brewery as recent examples.

Another example was an Oamaru company which was building dairy sheds but had now expanded in to prefabricated buildings and housing which it was selling, not only in North Otago but other expanding regions.

”There are the irrigation servicing companies who are growing or have moved in to town to support the development.”

All that activity was benefiting sub-contractors such as painter and plumbers.

”Anyone who tries to get a tradie will know that.”

That was all a direct result of irrigation, Mr Berry said. . .

The mood in North Otago has been increasingly positive since irrigation first came, even when the weather’s dry and drought’s threatening as it is now, in spite of some rain at the weekend.

Nothing beats water from the sky, but there’s now enough critical mass under irrigation to drought-proof the area, giving farmers on dryland options to sell stock and/or buy supplements or grazing.

The growing optimism has been helped by growth in tourism too.

The little blue penguins, Oamaru’s beautiful old (by New Zealand standards) buildings and more recently steam punk and the Alps to Ocean cycle way have brought more people to the area, providing opportunities for artists, artisans, hospitality and other businesses which service and supply visitors.

The latest Lonely Planet guide to New Zealand crowned Oamaru the coolest town in the country.

The expanded irrigation scheme will provide another boost for the area as money spent by farmers trickles through the rest of the community and into the wider economy.

 

 

 

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