Rural spending a $2.2b boost to Christchurch

Last updated 06:52 07/03/2014

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About $2.2 billion is entering the Christchurch economy each year from spending by nearby farmers and rural businesses.

Farmer and agribusiness spending is contributing about 10 per cent of the city's total gross domestic product, the same amount as the retail sector.

Lincoln University research shows sheep and beef farmers directly spent more than $80m a year, mixed-cropping farmers more than $76m and dairy farmers $68m.

Only farmers from Selwyn and Waimakariri districts were assessed in the research, which took into account the spending patterns of rural businesses serving the farm households, and employment generated from the spending.

Lincoln University trade and environmental economics professor Caroline Saunders said the financial contribution of farming to the local economy was important.

Farmer-related spending was 10 per cent of the city's output, which was equal to the retail sector's, she said.

"I sit in committees in town and hear that Christchurch isn't connected to the plains. Well, it is, and that's clearly showing that's not true. We haven't done the Ashburton district or all of Canterbury by any stretch of the imagination, and we didn't include (food) processing, which is obviously connected."

The survey also did not include the economic contributions from the Hurunui district.

The sheep and beef farmer spend was more because their numbers were larger, at 53 per cent of farmers in Selwyn and Waimakariri districts, compared with 17 per cent for dairy farmers, she said.

"When we think farming we go dairying, dairying and dairying, but there are a lot of sheep farmers out there."

However, dairy farmers spend more per capita in the city - about $150,000 on average, against $57,000 from sheep and beef farmers.

Saunders is a director of the university's Agribusiness and Economics Research Unit, which was commissioned by Aqualinc Research, to study spending flows into Christchurch from local farms and their households.

About 26 per cent of direct farm and household spending was in Christchurch, averaging $82,313 a farm for a total of $306m.

Another $511m of spending comes from rural businesses, for a combined $817m, and the total impact from direct and indirect spending is estimated at $2.2b.

The most farmer spending in the city was for fertiliser and lime ($101m) and repairs and maintenance ($29m). Other spending was tracked for recreation, culture and electronics, education, doctors and other medical services, food and beverages, personal care, home maintenance and retail trade.

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Rural businesses spent the most for goods and services in the food manufacturing sector at $84m, other manufacturing $76m and the business service sector $63m.

Saunders said the research could go some way to supporting policymakers in their decisions, particularly with the redevelopment of Christchurch from the 2010 and 2011 earthquakes and broader economic development strategies.

The next stage of the research will assess the economic impact to Christchurch of increased irrigation on the Canterbury Plains.

- The Press

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