The wheel of water: The contribution of the agricultural sector in Selwyn and Waimakariri districts to the economy of Christchurch

Abstract

The impacts of expenditure flows from rural districts on the economy of Christchurch have been calculated as part of a broader research project, “The Wheel of Water”, led by Aqualinc Research Ltd. and funded by the Ministry of Business, Innovation and Employment (MBIE). In 2013, the AERU developed and tested a methodology for identifying and quantifying the socio-economic impacts of expenditure flows from the rural sector on adjacent urban areas. The impacts of expenditure flows from farms, farm households, rural-servicing businesses and food processing businesses located in the Selwyn and Waimakariri districts on the Christchurch economy have been estimated during three stages of the study. In the first stage the methodology was developed and the expenditure flows from farms and rural-servicing businesses were estimated. In the second stage, the inter-annual differences in farm expenditure flows, and the potential impacts of increasing irrigation development were examined, and lastly the contribution of the food processing sector in Selwyn and Waimakariri districts to economic activity in Christchurch was estimated. A three-step process was used to estimate the total expenditure flows from farms, farm households and rural-servicing businesses into Christchurch from the two adjoining districts. A postal survey of farms was carried out to obtain information about the proportions of farm and farm household expenditure spent locally, in Christchurch, and elsewhere by expenditure category. Estimation of the expenditure by all farms and farm households was undertaken by overlaying the survey data with data from the Statistics New Zealand Household Economic Survey and the Ministry of Primary Industries Farm Monitoring data. A web-based survey of rural businesses to acquire information on where they purchased supplies was conducted, and the survey results and secondary data were used to estimate the total value of rural business expenditure in Christchurch. Output and employment multipliers for Christchurch were used to estimate the total effects of agricultural expenditure on gross output and employment in the city.