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6. Testing Parameter Values

The parameter values established in the previous section of this report have been put through a process both to test and prove them in a real scheme analysis. This has been carried out on an ex- post basis on the Lower Waitaki Irrigation Scheme and the results from that analysis compared with those prepared as part of an ex-ante analysis of the proposed Central Plains irrigation scheme.

This exercise has been carried out to demonstrate the calculation of the parameter values and also to investigate their application in a "toolbox" of assessment parameters.

6.1 Ex Post Analysis

6.1.1 Study Area

The Lower Waitaki Irrigation Scheme (LWIS) was chosen for the ex-post analysis primarily because of the available information on the scheme. In order to be able to carry out a "with and without" analysis of the Lower Waitaki Irrigation Scheme it was necessary to choose a comparison area. This was done in order to be able to model the land use changes and degree of private irrigation development that would occur in the LWIS area without the benefit of a community irrigation scheme. The Rangitata delta was an appropriate comparative area because of its soil type, shape and location to the south of a major river.

Irrigation was introduced into the Lower Waitaki plains with the development of a community irrigation scheme in 1974. Development of the scheme was gradual with the off-farm works not totally completed until 1984. By 1990 the total command area was under either border dyke or spray irrigation. By 1994 50 percent of the area was under dairy farming with an increase to approximately 70 percent of the command area by 2001.

Farms in the Rangitata area were badly affected by the droughts and economic downturn of the 1980s. As a result of this there has been significant ownership change and development of properties through the early 1990s. Irrigation development has occurred privately with a significant acceleration in that development since the early 1990s, to the point where it is estimated that approximately half of the land area is now irrigated from groundwater (2001). While some of this land use is in dairy farming (19 percent) there is still a significant area of dairy support and arable cropping under irrigation. Dryland farming activities are traditional sheep farming with conservative systems because of the threat of drought.

6.1.2 Study Method and Results

Land use was taken from the Agribase data base for each area, and models were made of farm income and expenditure for the main land use types on the basis of typical budgets for farms in these areas. These models were based on MAF Farm Monitoring models but were adapted to local conditions. Models were created for both dryland and irrigated land use. The price series used was based on the average of the SONZAF 4-year predictions.

Farm output models of income and expenditure were created to mirror the Lower Waitaki Irrigation scheme area, under a dryland scenario, under the same land use mix as the Rangitata area, and under its present land use mix. Use of this technique in the "with" scenario estimates the economic output of the area as it is at present. Two "without" scenarios have been created, the first assumes that the area remained in dryland; the second models the area under partial development with private irrigation. The difference between the "with" scenario and each of the "without" scenarios can be calculated and reported as the net economic impact arising from either private or community irrigation development.

These income and expenditure estimates were incorporated into district, regional and national economic models and economic multipliers for each mix of land uses were estimated. These multipliers are the relationship between the direct effects on farm and the total effects in the district, the region and nationally.

To estimate the total economic impacts at the geographic levels relevant to the study area, three geographic models were used. A "local" model was for the combined TLAs of Timaru, Waimate and Waitaki. A "regional" model was developed for the combined Canterbury / Otago regions, and an existing national model was used. The direct purchases of inputs by each farm type from each geographic level was estimated on the basis of the types of expenditure and levels of expenditure contained in the farm budgets and the share of each expenditure type taking place in each geographic area.

The empirical data for the Social analysis were obtained from two main sources: statistics from the five censuses from 1981 to 2001 obtained directly from Statistics New Zealand and from Supermap, and a mixture of quantitative and qualitative data from the Ministry of Education, local government agencies and three community studies. A case study approach was adopted by focussing on two geographical localities and comparing the selected parameters.

Maps of the Lower Waitaki irrigation scheme and the area between the Rangitata and Orari rivers were compared with Supermap. Clusters of meshblocks were identified for each area. The meshblock boundaries did not always coincide with the geographical boundary of the areas, but where there was some difference between the two sets of boundaries it was decided to select meshblocks whose boundaries were slightly outside the geographical boundary. Census data was initially obtained from Supermap and then by a special order from Statistics New Zealand for both areas and the country as a whole. Statistics New Zealand advised that census data for these meshblocks before 1981 would be very difficult to extract from their records so the analysis has been restricted to the five censuses between 1981 and 2001. This longitudinal analysis also raises the issue of the comparability of data between censuses which is discussed later with reference to particular parameters.

Economic

The Return on Capital has been calculated by updating scheme capital costs to 2002 with the Cost of Construction index to give total scheme costs of $25.226 million. On-farm development costs of the current land use mix, using present day development costs, are estimated at $205.436 million.

The net change in annual Cash Farm Surplus from dryland to "with" community scheme development is $28.967 million. Therefore the scheme achieves a 14.1 percent return on Capital at the farm gate.

Multipliers have been calculated for six different farm types for irrigated and non-irrigated situations, based on the farm budgets drawn up. The multipliers for any particular farm type vary between irrigated and non-irrigated situations, because the expenditure patterns in the two situations differ. These multipliers are then applied to the direct output changes and the results are shown in the Figures below.

Figure 3 reports the total output per thousand hectares at the four geographic levels of farm, district, regional and New Zealand. This is reported for each of the three scenarios modelled.

Figure 3: Total Output per ‘000 Ha at Geographic Level

The net impact that can be attributed to community scheme development is the difference between that which would occur under either dryland or private development and that which would occur under community development. Table 3 reports this analysis.

Table 3: Net Increase in Output as a Result of Community Scheme Development by Location ($ million per ‘000 Ha)

Developing from	Farm	District	Region	NZ
Dryland to Community	3.8	4.6	12.3	13
Private to Community	2.5	3.4	9.2	9.7

Table 3 shows us that the net output increase as a result of a shift from private to community scheme development ranges from $2.5 million per thousand hectares at the farm gate to $9.7 million nationally.

Figure 4 reports the total employment per thousand hectares at the four geographic levels of farm, district, regional and New Zealand. This is reported for each of the three scenarios modelled.

Figure 4: Total Employment per ‘000 Ha at Geographic Level

Dryland to Community	10.4	17	36.2	39.4
Private to Community	7.5	12.6	27	29.4

Table 26 shows us that the net employment increase as a result of a shift from private to community scheme development ranges from 7.5 FTEs per thousand hectares at the farm gate to 29.4 FTEs nationally.

Figure 4 reports the total value added per thousand hectares at the four geographic levels of farm, district, regional and New Zealand. This is reported for each of the three scenarios modelled.

Figure 4: Total Value Added per ‘000 Ha at Geographic Level

The net impact that can be attributed to community scheme development is the difference between that which would occur under either dryland or private development and that which would occur under community development. Table 4 reports this analysis.

Table 4: Net Increase in Value Added as a Result of Community Scheme Development by Location (per ‘000 Ha)

Developing from	Farm	District	Region	NZ
Dryland to Community	2.3	2.7	4.5	4.8
Private to Community	1.5	1.8	3.2	3.4

Table 4, shows us that the net value added increase as a result of a shift from private to community scheme development ranges from $1.5 million per thousand hectares at the farm gate to $3.4 million nationally.

The figures and tables above show us that after approximately 30 years of irrigation development there are significant advantages showing. Output, employment and value added increases reported are all significant. The analysis also confirms that the flow on impacts at the district and regional level are substantial and proportionately greater than those achieved at the farm gate. These figures confirm that there are significant flow on impacts to community scheme irrigation development over that which may occur through gradual private development or from continued dryland farming. More detailed reporting of the results of the analysis is shown in Appendix 1 including direct impacts by land use type.

Geographic Location of Impacts

A significant part of the first round farm multiplier effects and farm household spending effects will take place in the rural towns and the proportion of the expenditure taking place in these small towns has been estimated on the basis of survey work undertaken for MAF in 1999. (These geographic locations are different to those identified in section 5.1.2.) This survey showed that the approximate proportion of first round and household spending effects taking place locally are as shown in Figure 4 and these figures have been used in assessing the multiplier effects at the various geographic levels.

Figure 4: Geographic Source of Inputs by Farm Type

Figure 4 shows us that the different farm types have significantly different patterns of expenditure. For example, sheep and beef farmers spend more than 50 percent of their farm expenditure in smaller centres whereas dairy and cropping farmers spend between 30 and 40 percent. It should be noted that this figure reports proportional spending (%). Significant differences in the total amounts spent could mean that, in dollar terms, impacts from dairying are higher than those for sheep and beef.

Social

Usually Resident Population

Usually resident populations of the Lower Waitaki, Rangitata, and New Zealand were compiled for the 1981 to 2001 census, and the increases or decreases in population between the census were calculated as percentages. The results of this analysis are presented in Table 5.

Table 5: Changes in Usually Resident Population of Lower Waitaki and Rangitata 1981-2001

Census Year	Lower Waitaki		Rangitata		New Zealand
	Number	% change over five years	Number	% change over five years	Number	% change over five years
1981	681	n/a	480	n/a	3,143,310	n/a
1986	714	4.8	420	-12.5	3,263,280	3.8
1991	762	6.7	387	-7.9	3,373,932	3.4
1996	795	4.3	465	20.2	3,618,297	7.2
2001	786	-1.1	477	2.6	3,737,277	3.3

Source: Statistics New Zealand

Lower Waitaki had a steady increase in population between 1981 and 1996 which during the 1980s exceeded the growth rate of the national population. Rangitata, by contrast, experienced a sharp decline of population in the 1980s, but had a strong period of population growth during the first half of the 1990s. Rangitata’s population decline during the 1980s reflects the impact of the reform of government agricultural policy which is masked to some extent in Lower Waitaki by changing patterns of land use. The presence of a community irrigation scheme in the Lower Waitaki since the mid 1970's contributed to population growth as dairying has become the most important farming activity in the area. Although dairying has also existed in Rangitata throughout this 20 year period, it is only with the introduction of groundwater irrigation by individual farmers since the beginning of the 1990s that it has become a significant component of the local economy.

Age structure of the usually resident population

Age structures of the Lower Waitaki, Rangitata, and New Zealand populations were compiled from the 1981 to 2001 censuses. They were summarised in several age categories from 0-14 years and 15-19 years, then by four decades to 59 years, and finally by 60-64 years and 65 years and over. Percentages were calculated for each category, and then the percentages of these categories were consolidated for further analysis into two major age groups - people aged 0-14 years and people aged between 15 and 64 years. The results of this analysis are documented in Table 6 and Table 8.

Table 6: Percentage of Usually Resident Population 14 years & under 1981-2001

	1981	1986	1991	1996	2001
Lower Waitaki	33.0	27.7	22.8	23.0	26.0
Rangitata	31.3	33.6	31.0	21.9	25.2
New Zealand	26.9	24.4	23.2	23.0	22.7

There has been a trend for both the Lower Waitaki and Rangitata populations to have higher proportions of children (14 years & under) in their populations than the national average over the period between 1981 and 2001 (see Table 6). Both areas have also had increasing proportions of people of working age in their populations over this period (see Table 7). For Lower Waitaki this trend was more evident between 1981 and 1991, while for Rangitata it did not emerge until 1991. Both these demographic changes indicate that these areas have relatively youthful populations compared with the rest of New Zealand. However, it is difficult to isolate the impact of the community irrigation scheme on the age structure of Lower Waitaki’s population as similar demographic changes have occurred in Rangitata. The trend may be due to separate independent factors impacting on the rural populations.

Table 7: Percentage of Usually Resident Population 15-64 years 1981-2001

	1981	1986	1991	1996	2001
Lower Waitaki	59.4	64.3	68.6	66.1	65.8
Rangitata	61.3	58.6	65.2	69.6	68.5
New Zealand	63.2	65.2	65.5	65.3	65.3

Source: Statistics New Zealand

Age structure of the farmers and farm workers occupational group

The age structures of farmers and farmer workers of Lower Waitaki, Rangitata, and New Zealand populations were collected from the 1981 to 2001 censuses. Statistics New Zealand assembled this data by using the appropriate occupational codes for each census to separate the farmers and farm workers from the rest of the population in each of these areas. Like the data for the general population they were summarised in several age categories from 15-19 years, then by four decades to 59 years, and finally by 60-64 years and 65 years and over. Percentages were calculated for each category, and then the percentages of these categories were consolidated for further analysis into one major age group - farmers and farm workers under 30 years of age. The results of this analysis are presented in Table 8.

Table 8: Percentage of Farmers and Farm Workers Occupation Group under 30 years of age 1981-2001

	1981	1986	1991	1996	2001
Lower Waitaki	24.5	27.5	30.1	35.9	36.5
Rangitata	29.6	29.6	19.1	22.4	21.0
New Zealand	34.1	31.0	24.4	24.7	22.2

Source: Statistics New Zealand

The proportion of farmers and farm workers under 30 years of age in Lower Waitaki gradually increased from about 25 percent in 1981 to 37 percent in 2001. From 1991 onwards the proportion of farmers and farm workers in this age category in Lower Waitaki was markedly higher than for the country as a whole. By contrast the proportion of farmers and farm workers in this age category in Rangitata steadily declined after 1986, and by 1991 was significantly lower than the national pattern. Thus farmers and farm workers in Lower Waitaki are relatively younger than their counterparts in the national population, while the same occupational group in Rangitata are relatively older.

A recent study by McCrostie Little et al. (1998A: 6-7) of the Waitaki Plains notes that irrigation farming in the area is the domain of younger people. During the early years of the irrigation scheme these younger people were from the North Otago down lands who intensified the cropping and grazing practices in the area, and later they were dairy families from the North Island. This conversion of farm units to dairy production was investigated by examining census data about dairy farmers and dairy workers.

Dairy farmers and Dairy Workers

Data about the number of dairy farmers and dairy farmers in Lower Waitaki, Rangitata, and New Zealand populations were compiled from the 1981 to 2001 censuses. Statistics New Zealand assembled this data by using the appropriate occupational codes for each census to separate the dairy farmers and dairy farm workers from the rest of the farmers and farm workers in each area. Then the proportion of dairy farmers and dairy farm workers to the total number of the farmers and farm workers occupation group in each area were calculated as percentages. These percentages are presented in Table 9.

Table 9: Percentage of Dairy Farmers & Dairy Workers in the Farmers and Farm Workers Occupation Group 1981-2001

	1981	1986	1991	1996	2001
Lower Waitaki	5.7	19.4	39.7	48.7	56.8
Rangitata	14.8	20.3	16.7	22.4	32.6
New Zealand	24.4	24.0	23.4	23.5	23.8

Source: Statistics New Zealand

The rapidly increasing proportion of dairy farmers and dairy workers among the broader occupational group of farmers and farm workers in the Lower Waitaki (from 6 to 57 percent - see Table 9) demonstrates the major shift in land use from dryland farming to dairying that has occurred over the last 20 years. By comparison the switch to dairy production in Rangitata was more erratic and uncertain during the 1980s. But even there the introduction of groundwater irrigation in the early 1990s has been associated with a growing number of dairy conversions.

Age structure of the dairy farmers and dairy workers occupation group

As dairy farmers and dairy workers have become a growing proportion of the farmers and farm workers occupational group in the study areas so their age structure has altered not only the demographic characteristics of farmers and farm workers in general, but has also influenced the cultural values and practices of farming itself. Thus an examination of the age structure of dairy farmers and dairy workers provides an indicator of the cultural gap between dairying and other forms of agricultural production.

The previous section describes how the data about dairy farmers and dairy workers were collected. Like the farmers and farm workers occupational group they were summarised in several age categories from 15-19 years, then by four decades to 59 years, and finally by 60-64 years and 65 years and over. Percentages were calculated for each category, and then the percentages of these categories were consolidated for further analysis into one major age group - dairy farmers and dairy workers under 30 years of age. The results of this analysis are documented in Table 10.

Table 10: Percentage of Dairy Farmers & Dairy Workers under 30 years of age 1981-2001

	1981	1986	1991	1996	2001
Lower Waitaki	-	58.3	40.0	50.0	45.2
Rangitata	14.8	27.2	28.6	27.3	28.5
New Zealand	24.4	31.5	24.3	25.1	21.5

Source: Statistics New Zealand

Note: A percentage was not calculated for Lower Waitaki in 1981 as the number of people of dairy farmers and workers recorded in the area at that census was only nine.

The proportion of dairy farmers and dairy workers under 30 years of age in the Lower Waitaki area is much higher than that existing among the country’s dairy farmers and workers (e.g. 45 percent cf. 22 percent for NZ in 2001) for the four censuses for which there were sufficient data (see Table). Furthermore, the major shift to dairying in Rangitata during the 1990s was also associated with a relatively high proportion of farmers and workers belonging to this age group. Thus both the study areas have relatively young populations of dairy farmers and workers who have transformed the pattern of land use.

Highest educational qualifications of the usually resident population

Data about highest educational qualifications were compiled from the 1981 to 2001 censuses. Although Statistics New Zealand advised that the categories comprising "highest qualification gained" for 1981 contained less detail than the other four censuses, this did not affect the analysis as it was focussed on three broad categories of tertiary qualifications, secondary qualifications, and no qualifications. Percentages were calculated for each of these three categories, and the results for two of them (tertiary and no qualifications) are documented in Table 11 and Table 12.

Table 11: Percentage of Usually Resident Population aged 15 years & over with tertiary qualifications 1981-2001

	1981	1986	1991	1996	2001
Lower Waitaki	13.6	23.5	30.7	29.8	24.0
Rangitata	16.4	23.3	23.2	27.5	21.8
New Zealand	19.5	29.2	35.4	32.2	27.7

Source: Statistics New Zealand

Table 11 reveals the proportions of residents in both Lower Waitaki and Rangitata with tertiary qualifications increased steadily until 1996. In Lower Waitaki, however, the increase was much stronger than occurred in Rangitata, and even appeared to exceed the national trend during this 20-year period. The substantial growth in the number of residents of Lower Waitaki holding tertiary qualifications may partly be explained by the shift to dairying in the area as this type of production generally requires farm operators and managers to have some type of tertiary education.

Table 12: Percentage of Usually Resident Population aged 15 years & over with no educational qualifications 1981-2001

	1981	1986	1991	1996	2001
Lower Waitaki	59.1	40.0	37.5	36.6	31.2
Rangitata	49.1	32.2	32.9	33.3	26.1
New Zealand	44.4	37.1	31.1	32.2	23.7

Source: Statistics New Zealand

At the other end of the educational scale there were steady declines in the proportions of residents in both areas who reported they held no educational qualifications (see Table 12). Although the proportion of residents was almost halved in both cases, these declines followed the national trend. Throughout the 20-year period Lower Waitaki had higher proportions of residents with no qualifications than did Rangitata. Again this difference between the two areas may be explained by the shift to dairying in the Lower Waitaki. Although dairying requires highly qualified operators and managers, it also needs a pool of young people to provide relatively unskilled labour for milking and other farm tasks.

Employment by Industry

Data about employment by industry were obtained through Supermap and Statistics New Zealand. The standard industrial categories were basically the same for the 1981, 1986 and 1991 censuses, but reclassification by Statistics New Zealand for the 1996 census expanded the number of industrial categories from nine to seventeen. Percentages of the number of residents employed in each of the industries were calculated for all five censuses even though there were a higher number of industrial categories for the last two censuses. It was possible to compare changes over this 20 year period by deducting the percentages of residents employed in the primary sector and those whose source of employment was "not specified" from 100 percent to determine the percentage of residents employed outside the primary sector. The results of this analysis are presented in Table 14.

Table 13: Percentage of residents employed outside the primary sector

	1981	1986	1991	1996	2001
Lower Waitaki	41.3	42.6	44.3	38.0	40.0
Rangitata	21.4	32.8	37.9	39.8	36.8
New Zealand	87.6	88.3	87.9	84.6	86.4

Source: Statistics New Zealand

Table 13 shows that the proportion of residents of Lower Waitaki who were employed outside the primary sector remained relatively constant at around two-fifths over the 20-year period. By contrast an increasing proportion of Rangitata’s residents held employment outside the primary sector, rising from 21 percent in 1981 to 37 percent in 2001. These trends indicate that although the population of Lower Waitaki increased by 15 percent over 20 years, most of its residents continue to be employed in the primary sector. In Rangitata, however, where the population in 2001 was about the same level as 20 years before, a growing proportion of residents depended on industries other than the primary sector for their employment. This comparison between the two areas suggests that an irrigation scheme not only stimulates population growth, but can also provide greater employment in an area provided the shift in land use (e.g. to dairying) provides more on farm jobs.

Occupational Status of Residents

Occupational data were obtained through Supermap and Statistics New Zealand. There were seven occupational categories in 1981 and six in 1986, with the sales workers and service workers categories of 1981 being combined into one category (i.e. sales and service workers). In 1991 the number of occupational categories was increased to ten and several were reclassified. Then in the 1996 census the armed forces category was removed. There were nine occupational categories for 1996 and 2001, and their classifications remained the same as in 1991. Percentages of the number of residents employed in each of the occupational categories were calculated for all five censuses even though there were different numbers of occupational categories except for the last two censuses. Changes were compared over this 20 year period by consolidating most of the occupational categories into two broad occupational groups - higher status occupations and blue collar occupations - and then calculating the percentages of residents belonging to each of these groups. The results of this analysis are presented in Table 14 and Table 15.

Table 14: Percentage of residents with higher status occupations

	1981	1986	1991	1996	2001
Lower Waitaki	6.2	7.7	12.8	13.6	19.2
Rangitata	6.8	7.8	16.4	14.1	16.5
New Zealand	17.7	19.9	34.4	34.2	37.4

Source: Statistics New Zealand

The proportion of residents with higher status occupations in Lower Waitaki increased threefold between 1981 and 2001 (see Table 10), while the proportion with these occupations in Rangitata increased by almost two and a half times. The shift towards higher status occupations in Lower Waitaki was much stronger than the national trend suggesting that over this period residents of this area have gained access to higher quality jobs. As this shift is not so evident in Rangitata it would appear to support the previous finding that the growing proportion of people with tertiary qualifications is partly explained by the development of the dairying in Lower Waitaki. While as Table 15 reveals the proportions of residents with blue-collar occupations in both areas declined over the same period. This decline was more marked in Rangitata probably because Lower Waitaki had a relatively constant proportion of its residents employed in the primary sector as a result of the shift to dairying.

Table 15: Percentage of residents with blue collar occupations

	1981	1986	1991	1996	2001
Lower Waitaki	76.5	79.9	70.4	71.4	70.2
Rangitata	83.8	79.7	69.1	70.5	68.3
New Zealand	43.5	41.5	37.0	33.6	36.0

Source: Statistics New Zealand

Employment Status of Residents

Employment status data were compiled from Supermap and Statistics New Zealand. Although the six categories of employment status in 1981 were replaced by five categories from 1986 onwards, and there were some minor changes in the descriptions of the categories, the classification system is relatively consistent over all five censuses. Three of these categories of employment - wage and salary earners/ paid employees, employers, and self-employed - were selected, and percentages of the number of residents employed in each category were calculated for the censuses. These percentages are presented in Table 15, Table 16, Table 17 and Table 18.

Table 16: Wage & Salary Earners/Paid Employees as Percentage of Residents 1981-2001

	1981	1986	1991	1996	2001
Lower Waitaki	50.5	55.0	54.5	57.0	55.3
Rangitata	47.8	43.2	48.3	42.5	44.8
New Zealand	81.7	75.7	70.1	68.6	69.7

Source: Statistics New Zealand

Table 17: Employers as Percentage of Residents 1981-2001

	1981	1986	1991	1996	2001
Lower Waitaki	19.7	17.1	15.9	21.2	24.0
Rangitata	21.7	18.9	11.7	17.2	21.8
New Zealand	5.9	6.8	6.9	6.9	6.9

Source: Statistics New Zealand

Table 18: Self Employed as Percentage of Residents 1981-2001

	1981	1986	1991	1996	2001
Lower Waitaki	23.1	19.8	17.4	11.3	12.0
Rangitata	27.5	29.7	26.7	21.8	20.6
New Zealand	7.0	8.2	10.2	10.5	11.5

Source: Statistics New Zealand

An examination of Tables 15 to 17 reveals that Lower Waitaki had increasing proportions of wage and salary earners and employers among its residents between 1981 and 2001, whereas the proportion of self-employed residents was nearly halved from 23 to 12 percent. For Rangitata, however, the proportion of wage and salary earners decreased slightly, the proportion of employers remained virtually the same, while the proportion of self employed fell from 28 to 21 percent. These findings indicate that the scale of enterprises has increased in the Lower Waitaki as there are more employers and wage and salary earners among the population, and that additional jobs have been created in the area. Many of those additional jobs would have been on farm as dairying has increased labour requirements compared to sheep and crop farming. In the case of Rangitata, however, the findings suggest that the scale of enterprises may not have changed, and thus did not contribute to any job creation in the area.

Labour force status

Data about the labour force status residents were obtained from Supermap and Statistics New Zealand for the five censuses. The number of labour force status categories at each census varied between three and four. There were also some minor changes in the naming of these categories. Percentages of residents employed full-time were calculated for each census and the results are recorded in Table 19.

Table 19: Employed Full-Time as Percentage of Labour Force 1981-2001

	1981	1986	1991	1996	2001
Lower Waitaki	53.6	55.0	54.5	59.0	63.0
Rangitata	57.7	64.5	60.9	55.6	56.7
New Zealand	51.9	54.3	49.3	45.0	46.0

Source: Statistics New Zealand

In terms of holding full-time jobs the residents of both Lower Waitaki and Rangitata have fared relatively well compared with other New Zealand citizens. As Table 19 shows the proportion of Lower Waitaki’s residents with full-time employment increased from 54 to 63 percent between 1981 and 2001. The residents of Rangitata almost maintained their share of full-time jobs over this period, while at the national level the proportion of people employed full-time declined from 52 to 46 percent. Thus Lower Waitaki’s residents have benefited from major changes to their economy, including the irrigation scheme and the shift to dairy production, through additional full-time employment.

Median of household incomes

The data for household incomes for all censuses were obtained directly from Statistics New Zealand. The medians of household income were recorded at the bottom of tables that reported the distribution of household incomes. The median household incomes of Lower Waitaki and Rangitata are presented in Table 20.

Table 20: Median Household Income ($NZ) 1981-2001

	1981	1986	1991	1996	2001
Lower Waitaki	14,222	18,688	31,059	34,744	43,864
Rangitata	13,599	20,327	26,471	34,501	38,421
New Zealand	14,957	23,234	30,910	34,707	39,588

Source: Statistics New Zealand

As Table 21 reveals the median household income of Lower Waitaki was higher than that for Rangitata at all censuses except 1986 and from 1991 onwards it was also higher than the median household income for New Zealand. Rangitata, by comparison, consistently had a lower median household income than New Zealand for all five censuses. These findings indicate that Lower Waitaki’s households have improved their incomes relative to both Rangitata and the rest of the country.

Distribution of household incomes

The distribution of household incomes for all censuses was obtained directly from Statistics New Zealand. They were presented in income bands ranging from a loss and zero income through intermediate levels to a variety of top income levels. Percentages were calculated for all these income bands, and then they were added together to comprise two broad income categories - households with incomes of $30,000 and under, and households with incomes of $50,001 and over to allow comparisons to be made over all five censuses. The results of this analysis are recorded in Table 21 and Table 22.

Table 21: Percentage of Households with Incomes of $30,000 and under

	1981	1986	1991	1996	2001
Lower Waitaki	71.8	54.9	42.4	35.8	27.4
Rangitata	74.5	66.0	48.9	39.4	33.9
New Zealand	75.2	56.1	42.5	36.7	32.3

Source: Statistics New Zealand

The proportions of households with incomes of $30,000 or under in Lower Waitaki, Rangitata, and New Zealand declined rapidly over this 20 year period as shown by Table 21. Much of this decline during the 1980s was due to the high rates of inflation rather than rising real incomes. Lower Waitaki consistently had a smaller proportion of households in this lower income category than Rangitata throughout this period. Furthermore, as Table 18 reveals, Lower Waitaki had a greater proportion of households with incomes of $50,001 and over in 1986, 1996 and 2001. Although these results provide further evidence that Lower Waitaki’s households have improved their incomes relative to Rangitata, they are inconclusive as to how that area’s households have fared in comparison with the nation’s households.

Table 22: Percentage of Households with Incomes of $50,001 and over

	1981	1986	1991	1996	2001
Lower Waitaki	5.6	4.2	15.3	26.3	34.7
Rangitata	7.8	-	16.3	23.2	28.9
New Zealand	1.9	9.0	22.9	27.4	31.9

Source: Statistics New Zealand

School rolls and other information about schools

Data about the rolls of schools in Lower Waitaki and Rangitata were available for the years 1990 to 2001. They were obtained in electronic form from the Ministry of Education in Wellington, and are documented below in Table 23. This table includes the two schools currently operating in the Lower Waitaki (Papakaio) and Rangitata (Clandeboye) areas as well as two schools in the these areas (Hilderthorpe and Orari Bridge) which have closed during the last ten years. The roll counts are listed at two year intervals from 1991 onwards. Other information about schools in Lower Waitaki was obtained from community studies by Houghton (1980) and McCrostie Little et al (1998A). Background information of this type was not available for Rangitata.

Houghton (1980: 120) identified four primary schools operating in the Lower Waitaki area in 1980. The schools were Awamoko, Papakaio, Hilderthorpe and Waitaki Bridge. Awamoko was a single teacher school, and Papakaio had three teachers. There was no information in her study about the rolls of those schools. The Papakaio School was staffed by four full-time and two-part-time teachers in 1998, and Hilderthorpe School was under threat of amalgamation with Papakaio. Sharemilkers were arriving in Lower Waitaki when their children were two or three years old, and leaving when their children were between nine and eleven. This made the schools’ rolls "bottom heavy" with large junior classes (McCrostie Little et al, 1998A: 15).

The rolls of schools operating in Lower Waitaki (Papakaio and Hilderthorpe) and Rangitata (Clandeboye and Orari Bridge) over the last 10 years are shown in Table 19. While Papakaio has had strong growth in student numbers over the past years, much of that is probably due to the closure of Hilderthorpe. Hilderthorpe’s closure suggests that schools are not always closed because of declining rolls. Sometimes school closures may be more the outcome of Ministry of Education policy and local politics than the result of rural depopulation. Clandeboye’s roll was also higher in 2001 than it was 10 years earlier. Some of that growth may be due to the recent shift to dairying in Rangitata.

Table 23: School rolls 1991-2001 (two year intervals) - Lower Waitaki and Rangitata

School	1991	1993	1995	1997	1999	2001
Papakaio	75	56	73	87	98	116
Hilderthorpe (1)	19	28	35	38	-	-
Clandeboye	27	24	20	31	26	39
Orari Bridge (2)	15	15	10	-	-	-

Source: Ministry of Education

Notes: (1) Closed after 1998. (2) Closed after 1995.

Community Organisations

Current directories of community organisations in the Waitaki District and Timaru District were obtained from the North Otago Citizens Advice Bureau and the Timaru Visitor Information Centre. From those directories were compiled lists of organisations whose primary purpose was to serve the Lower Waitaki and Rangitata areas. Other information about community organisations in these areas was obtained from case studies of the Lower Waitaki (McCrostie Little et al, 1998A) and Clandeboye (McCrostie Little et al, 1998B). These sources of information were studied and short accounts of community organisations in both areas were prepared.

In the Waitaki Valley there is a wide variety of support services and organisations. Most of those organisations are based in the larger settlements of Kurow and Duntroon which are to the west of the irrigated area. Residents of the Lower Waitaki also participate in community organisations in Oamaru. There are several community organisations based in the irrigated area itself, including a Lions Club, a branch of the Plunket Society, a playcentre, tennis club and garden club. Several of these organisations are based at Papakaio where there is a large multi-facility centre with a heated swimming pool and squash courts, and a golf course (McCrostie Little et al, 1998A: 18).

Formerly, in the Rangitata area there were a range of community activities centred on Clandeboye, but now they no longer exist and residents consider the locality has lost its community spirit (McCrostie Little et al, 1998B: 18). Today the Rangitata area is served by community organisations that are based at Temuka including eight community service organisations (e.g. Lions Club, Arts Council, Aged Citizens Welfare, Challenge Work Club and Community Care Trust), and twelve sports and recreational clubs.

Both the Lower Waitaki and Rangitata areas are well served by community organisations. Without key informant interviews with leaders of those organisations, however, it is difficult to assess what effects economic changes such as the irrigation scheme or the shift to dairying has had on their activities and membership levels. Moreover, these short accounts of community organisations based on secondary sources provide little understanding of the economic and social changes that have transformed the everyday lives of people in these two areas since 1980.

6.1.3 Summary Results

Economic

The Return on Capital of the Waitaki scheme has been calculated by updating scheme capital costs (using the CCI) to give a total of $25.226 million. On- farm development costs of the current land use mix are estimated at $205.436 million. The net change in annual Cash Farm Surplus from dryland to "with" scheme development is $28.967 million per annum. Therefore the scheme achieves a nominal 14.1 percent return on capital at the farm gate.

A summary of the economic impacts identified in the ex post study are shown in Table 24(expressed on a per 000 ha basis) and Table 25(expressed on a Total scheme basis).

Table 24: Net Increase in Economic Parameters as a Result of Community Scheme Development by Location (per ‘000 Ha)

	Farm	District	Region	NZ
Output ($ mill)	2.5	3.4	9.2	9.7
Employment (FTEs)	7.5	12.6	27	29.4
Value Added ($ mill)	1.5	1.8	3.2	3.4

The increase in output attributable to the development of a community irrigation scheme ranges from $2.5 million per 000 ha at the farm gate through to $9.7 million per thousand ha at the national level.

The increase in employment attributable to the development of a community irrigation scheme ranges from 7.5 FTEs per thousand ha at the farm gate through to 29.4 FTEs per thousand ha at the national level.

Added value increases as a result of the development of the community irrigation scheme ranges from $1.5 million per thousand ha at the farm gate through to $3.4 million per thousand ha at a national level.

Table 25: Net Increase in Economic Parameters as a Result of Community Scheme Development by Location for the Lower Waitaki Irrigation Scheme.

The net impact that can be attributed to community scheme development is the difference between that which would occur under either dryland or private development and that which would occur under community development. Table 26 reports this analysis.

Table 26: Net Increase in Employment as a Result of Community Scheme Development by Location (per 000 Ha)

Developing from	Farm	District	Region	NZ
Output ($ mill)	42.12	57.30	155.02	163.45
Employment (FTEs)	126.4	212.3	454.95	495.4
Value Added ($ mill)	25.28	30.33	53.92	57.29

The increase in output attributable to the development of a community irrigation scheme ranges from $42.12 million at the farm gate through to $163.45 million at the national level.

The increase in employment attributable to the development of a community irrigation scheme ranges from 26.4 FTEs at the farm gate through to 495 FTEs at the national level.

Added value increases as a result of the development of the community irrigation scheme ranges from $25.28 million at the farm gate through to $57.29 million at a national level.

Social

Population Trends

The Waitaki area had a net population gain of 15.4 percent since 1981 compared to Rangitata’s loss of 0.6 percent and a national gain of 18.9 percent. This equates to a 16 percent increase in population gain as a result of the development of the community irrigation scheme.

All study area's showed a similar age structure.

Occupation Trends

The proportion of farmers and farm workers under 30 years of age in Waitaki is markedly higher than for the country as a whole. By contrast the proportion of farmers in this age category in Rangitata steadily declined.

The increase in the proportion of dairy farmers and dairy farm workers in the Waitaki area demonstrates a major shift in the land use to dairying over the last 20 years. The Rangitata area has shown a similar increase in the 1990s which is associated with a growing number of dairy conversions.

The Waitaki area shows a relatively younger population of dairy farmers than Rangitata and New Zealand as a whole.

The Waitaki area has retained its proportion of residents employed in primary production while Rangitata has had a growing proportion of residents employed outside the primary sector. This suggests that irrigation scheme development not only stimulates population growth but can also provide greater employment in an area as long as the land use change provides more on farm jobs.

Employment Type

The proportion of residents with higher status occupations in Waitaki increased threefold over the study period while the proportion with these occupations in Rangitata increased by nearly two and a half times. The shift in Waitaki was much stronger than the national trend suggesting that over this period residents have gained access to high-quality jobs.

Analysis of the number of wage and salary earners and employers in each area indicates that the scale of enterprises has increased in the Lower Waitaki as there are more employers and wage and salary earners among the population and that additional jobs have been created. In Rangitata the findings suggest that the scale of enterprises may not have changed and thus have not contributed to job creation in the area.

The proportion of Waitaki's residents with full-time employment increased over the study period. Rangitata almost maintained its share of full-time employment over this period while the national results show a decline in the proportion of people employed full-time. Lower Waitaki's residents have benefited from major changes to the economy through additional full-time employment.

Income Status

Households in the Waitaki area have improved their incomes relative to the Rangitata area and the rest of the country.

Waitaki shows a consistently smaller proportion of households in the lower income category than Rangitata. However Waitaki also shows a greater proportion of households with incomes above $50,000 per annum. This indicates that Waitaki's households have improved their incomes relative to Rangitata.

Qualitative Analysis

A result of analysis of school rolls and community organisations is inconclusive in being able to indicate any significant differences between the two areas. This is partly due to an inability to evaluate the economic and social changes from other sources that have occurred during the period.

Ex Ante Comparison

The assessment parameters developed in this study were tested against an ex ante study of the proposed Central Plains irrigation scheme.

Economic Evaluation

The Central Plains Irrigation study modelled a number of different scenarios to establish a range of the potential impacts that would occur in the future as a result of the development of the scheme. These scenarios were chosen in order to report the likely outcomes of different land use options which have significantly different impacts on employment or output. In this way the decision-makers would be able to judge the impacts on an "in the order of" basis. This was particularly important for this study area as there was significant central and local government input into initial feasibility studies.

This study included other potential irrigation the development in the Central Canterbury and calculated all regional and national flow on impacts from the two schemes.

The following tables show a comparison of the economic parameter reporting for the Central Plains scheme alongside the results achieved from the LWIS. The comparison is with the parameters developed for the difference between dryland and community scheme development in the LWIS scheme area. This comparison is valid as the Central Plains project excluded development in the area where private irrigation development was considered economic. For comparative purposes they are expressed in per thousand ha terms.

Table 27 shows that the predicted output levels are conservative when compared with those being achieved on the Lower Waitaki Plain.

Table 27: Net increase in Output ($ million) per ‘000 ha.

Scenario	Farm	Region
Likely Short Term	1.7	7.8
High Productivity	2.5	10.9
Dairy Country	2.3	9.9
Fruit & Vege Bowl	2.7	9.3
@ Biological	2.8	11.7
Lower Waitaki Results	3.8	12.3

Table 28 shows that the farm level employment impacts appear to be conservative compared to those being achieved on the Lower Waitaki Plain.

Table 28: Net Increase in Employment ( FTEs) per ‘000 ha.

Scenario	Farm	Region
Likely Short Term	5.4	31.5
High Productivity	6.8	44.3
Dairy Country	8.0	36.4
Fruit & Vege Bowl	25.9	61.4
@ Biological	5.9	43.2
Lower Waitaki Results	10.4	36.2

Table 29 shows that the farm level value added impacts appear to be conservative compared to those being achieved on the Lower Waitaki Plain.

Table 29: Net increase in Value Added ($ million) per ‘000 ha.

Scenario	Farm	Region
Likely Short Term	0.9	2.9
High Productivity	1.4	4.2
Dairy Country	1.5	3.9
Fruit & Vege Bowl	1.2	3.7
@ Biological	1.6	4.8
Lower Waitaki Results	2.3	4.5

Overall this comparison serves the purpose of proving that predictions made for the impact of the Central Plains Scheme are not inconsistent with those measured on the Lower Waitaki Plains. This should give decision makers some confidence in the predictive figures depending on the scenario that they believe is the most probable.

Social Impacts

Reporting of impacts of social change as a result of proposed development of the community irrigation scheme on the Central Plains was based on previous studies and reported a general assessment of the types of changes which are known to occur with the development of irrigation. The results of the assessment of different values carried out in this study are an important quantitative proof that the known trends reported actually occur.

There are a number of provisos that should be noted regarding the application of the key parameters that were developed from the comparison of the Lower Waitaki Plains and Rangitata areas to an ex ante social assessment of the proposed Central Plains irrigation scheme. These provisos are as follows:

• the social and economic conditions when the Lower Waitaki Plains irrigation scheme began operation in 1974 were vastly different from those existing today when the feasibility of the Central Plains irrigation scheme is being investigated;
• the pattern of land use in the Lower Waitaki Plains area in 1974 is different from that existing in the Central Plains area today;
• there was a period of population decline in the Lower Waitaki Plains area at that time, while in recent years there has been population growth in the Central Plains area partly as a result of rural subdivision; and
• the Lower Waitaki Plains was a dryland farming area prior to the introduction of the scheme, whereas parts of the Central Plains are already irrigated from groundwater.

All these provisos limit the application of the key parameters to the proposed Central Plains irrigation scheme as they may distort the predictions made on the basis of the historical analysis of the Lower Waitaki Plains. Furthermore, they mean that any exercise that tries to quantify those predictions would be based on dubious premises. Thus the following test of the key parameters is restricted to a discussion of the demographic and social trends that are expected to occur as a result of the introduction of an irrigation scheme on the Central Plains.

Test of the key parameters in an ex ante social assessment of the proposed Central Plains Irrigation scheme

The basic assumption of this ex ante social assessment of the proposed Central Plains irrigation scheme is that there will be a similar shift to dairying as occurred in the case of the Lower Waitaki Plains area, and the uptake of irrigation will be at a similar rate. All four scenarios developed by Butcher Partners Ltd (2000: 21), for instance, project a major shift to dairy farming (76,000 to 149,000 hectares) in Mid and Central Canterbury should 192,000 hectares of land become irrigated. Two of those scenarios also project that an additional 21,000 to 36,000 hectares of land will be used for horticultural and process crop production.

The test of key parameters is restricted to those selected from census statistics as the comparative analysis of information about school rolls and community organisations in the Lower Waitaki Plains and Rangitata areas was inconclusive.

Usually resident population - There will be moderate growth in the population of the Central Plains area as farms are converted to dairying. This trend would be particularly evident during the first 15-20 years after the scheme commenced operation, although it would also be influenced by any continued trend towards rural subdivision.

Age structure of the usually resident population - Higher proportions of people 14 years and under, and people of working age (15-64 years) in the population of the Central Plains area can be expected. This may not entirely be attributable to the introduction of the irrigation scheme as rural subdivision is expected to continue in parts of the Central Plains area.

Age structure of the farmers and farm workers occupation group - As farms are converted to dairy production there will be a gradual increase in the proportion of farmers and farm workers under 30 years of age in the Central Plains area.

Dairy farmers and dairy workers - The proportion of dairy farmers and workers in the farmers and farm workers occupation group will grow at a rate which reflects the conversion of farms to dairy production.

Age structure of the dairy farmers and dairy workers occupation group - The proportion of dairy farmers and workers under 30 years of age in the Central Plains area will eventually be higher than the national pattern of this occupation group.

Highest educational qualifications held by residents - With a shift to dairying on the Central Plains, the proportion of residents with tertiary qualifications will increase due to the arrival of highly qualified operators and managers of dairy farms, while the proportion of residents with no educational qualifications may follow national trends as dairying also requires a pool of young people to provide relatively unskilled labour.

Employment by industry - The proportion of residents of the Central Plains employed inside the primary sector will hold up as dairying and other more labour intensive forms of primary production provide employment.

Occupational status - The proportion of residents with higher status occupations is also likely to increase with the arrival of highly qualified operators and managers of dairy farms in the Central Plains area.

Employment status - There will be a growing proportion of wage and salary earners, while the proportion of self-employed residents will decline as additional jobs are created as the result of the shift to dairying.

Labour force status - The proportion of residents of the Central Plains with full-time jobs will increase due to the rising demand for labour on dairy farms this could be offset by an increase in horticultural production.

Median household income - The median household income will improve relative to the rest of the country as the conversion to dairy production proceeds. The rate at which this improvement occurs will also be influenced by the commodity price cycle for dairy and other agricultural products.

Distribution of household incomes - The analysis of the distribution of household incomes in the case of the Lower Waitaki Plains and Rangitata areas is inconclusive, and does not provide any indication of how household incomes in the Central Plains area will fare should there be a major shift to dairying.

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