WATER AND CHOICE IN CANTERBURY : Review and Assessment of Research Priorities for Lower Rakaia and Central Plains Irrigation Planning K.L. Leathers, B.M.H. Sharp, W.A.N. Brown with M.T. Laing, L.E. ~ochhGad, D. Williams, A.M. Cree, I.S. Knowles, J. Gough February 1983 RESEARCH REPORT NO. 135 AGRICULTURAL ECONOMICS RESEARCH UNIT LINCOLN COLLEGE CANTERBURY NEW ZEALAND ISSN 0069-3790 THE AGRICULTURAL ECONOMICS RESEARCH UNIT Lincoln College, Canterbury, N.Z. The Agricultural Economics Research Unit (AERU) was established in 1962 at Lincoln College, University of Canterbury. The aims of the Unit are to assist by way of economic research those groups involved in the many aspects of New Zealand primary production and product processing, distribution and marketing. Major sources of funding have been annual grants from the Department of Scientific and Industrial Research and the College. However, a substantial proportion of the Unit's budget is derived from specific project research under contract to government departments, producer boards, farmer organisations and to commercial and industrial groups. The Unit is involved in a wide spectrum of agricultural economics and management research, with some concentration on production economics, natural resource economics, marketing, processing and transportation. The results of research projects are published as Research Reports or Discussion Papers. (For further information regarding the Unit's publications see the inside back cover). The Unit also sponsors periodic conferences and seminars on topics of regional and national interest, often in conjunction with other organisations. The Unit is guided in policy formation by an Advisory Committee first established in 1982. The AERU, the Department of Agricultural Economics and Marketing, and the Department of Farm Management and Rural Valuation maintain a close working relationship on research and associated matters. The heads of these two Departments are represented on the Advisory Committee, and together with the Director, constitute an AERU Policy Committee. UNIT ADVISORY COMMITTEE G.W. Butler, M. Sc., Fil.dr., F.R.S.N.Z. (Assistant Director-General, Department of Scientific & Industrial Research) B.D. Chamberlin (Junior Vice-President, Federated Farmers of New Zealand Inc.) P.D. Chudleigh, B.Sc. (Hons), Ph.D. (Director, Agricultural Economics Research Unit, Lincoln College) (ex officio) J. Clarke, C.M.G. (Member, New Zealand Planning Council) J.B. Dent, B.Sc., M.Agr.Sc., Ph.D. (Professor & Head of Department of Farm Management & Rural Valuation, Lincoln College) E.J. Neilson, B.A.,B.Com., F.C.A., F.C.I.S. ,L (Lincoln College Council) B.J. Ross, M.Agr.Sc., *h c, ?. (Professor & Head of Department of Agricultural Economics & Marketing, Lincoln College) P. Shirtcliffe, B.Com., ACA (Nominee of Advisory Committee) C Professor Sir James Stewart, M.A., Ph.D., Dip. V.F.M., FNZIAS, FNZSFM (Principal of Lincoln College) E.J. Stonyer, B.Agr. Sc. (Director, Economics Division, Ministry of Agriculture and Fisheries) UNIT RESEARCH STAFF: 1983 2 Director P.D. Chudleigh, B.Sc. (Hons), Ph.D. Rasearch Fellow in Agricultural Policy J.G. Pryde, O.B.E., M.A., F.N.Z.I.M. Senior Research Economists A.C. Beck, B.Sc.Agr., M.Ec. K.L. Leathers, B.S., M.S., Ph.D. R.D. Lough, B.Agr.Sc. R.L. Sheppard, B.Agr.Sc.(Hons), B.B.S. Research Economist R.G. Moffitt, B.Hort.Sc., N.D.H. Assistant Reseearch Economists G. Greer, B.Agr.Sc.(Hons) (D.S.1.R Secondment) S.A. Hughes, B.Sc.(Hons), D.B.A. G.N. Kerr, B.A., M.A. (Hons) M.T. Laing, B.Com.(Agr), M.Com.(Agr) (Hons) P.J. McCartin, B. Agr.Com. P.R. McCrea, B.Com. (Agr) J.P. Rathbun, B.Sc., M.Com.(Hons) Post Graduate Fellows N. Blyth, B.Sc.(Hons) C.K.G. Darkey, B.Sc., M.Sc. Secretary C.T. Hill PREFACE With the need for increased production from New Zealand's traditional resource strength, land, the waters of our rivers can be seen to make a significant contribution to this end via irrigation. But such uses of river water can conflict with other existing and potential water uses, notably in the realm of conservation and fisheries. These potential conflicts, and the information needed to help resolve them, is the topic of this report. The study was undertaken by a multi-disciplinary team of economists, geographers, physicists, biologists, sociolog~stsand public policy and legal experts from a range of institutions in Canterbury. The project was supervised by Dr K.L. Leathers, Senior Research Economist in the A.E.R.U. The publication of this report forms part of an existing A.E.R.U. programme of research in the field of natural resource economics and management. This report should make a valuable contribution not only to the present decision problem regarding the Rakaia River but also to the future approach to research by various agencies responsible for the development of the country's natural resources. It is important for such agencies to approach these difficult issues with a multi-objective philosophy, if not with a multi-disciplinary team of qualified personnel. This philosophy is important because the resolution of issues such as described in this report calls for logical and integrative thinking by all concerned. P.D. Chudleigh Director ACKNOWLEDGEMENTS AND DISCLAIMERS This study was made possible with a research grant from the Water and Soil Division, Ministry of Works and Development. The Study Team also wish to acknowledge the valuable assistance received from other institutions, agencies and individuals. The study materially benefited by their encouragement and co-operation. With respect to information sources, published and otherwise, the assistance of the following organisations deserve special acknowledgement: (1) the Ministry of Agriculture and Fisheries' Farm Advisory Service, Research Division and Fisheries Research Laboratory (Christchurch); (2) the Ministry of Works and Development's Water and Soil Division and Science Centre (Christchurch); (3) the North Canterbury Catchment and Regional Water Boards' Resource Investigation and Management Sections; (4) the Canterbury United Council's Planning Department; and (5) the Lincoln College/University of Canterbury's Agricultural Economics Research Unit, Centre of Resource Management, Agricultural Engineering Department, and the New Zealand Agri- cultural Engineering Institute. A number of individuals deserve special recognition for the time they willingly contributed at various stages in the study. The Study Team is grateful to Mike Bowden'and staff (Resources Section, North Canterbury Catchment Board), Walter Lewthwaite, Sally Davis, Nicola Shadbolt, Dave Joblin and staff (Ministry of Agriculture and Fisheries' Research Division) for providing a wealth of informative data, including some yet unpublished information. Peter Chudleigh, Bruce Ross, Ken Hughey, Grant McFadden, Herb Morriss, Walter Lewthwaite, John Greer, Garth Cant, and colleagues at the Agricultural Economics Research Unit and Centre for Resource Management provided useful criticisms on content and presentation. The editorial suggestions of an anonymous reviewer, from the Water and Soil Division (M.W.D.), were also greatly appreciated. The final draft benefits greatly by their suggestions. Special mention is due to Herb Morriss and Walter Lewthwaite, the liaison officers for the study, (iii) for their able assistance in formulating and guiding the research effort, and for their critical appraisal of the methodology and results. The funding agency provided considerable flexibility in conducting the study, particularly with regard to the length of time taken to complete it. More effort went into the study than was originally envisaged. This was partly due to individuals' enthusiasm for an exciting area of applied research, but also because it became evident from the importance of the issues that much care was needed in presenting a balanced appraisal. The conclusions reached and recommendations, however, are not necessarily endorsed by the funding agency or by Lincoln College, nor should they be attributed to any organisations or individuals who co-operated in the study. The senior author accepts responsibility for any remaining errors and omissions in the final editing of the report. SYNOPSIS OF FINDINGS Regional agencies responsible for the administration, planning, development and management of water resources in Canterbury face some difficult decisions in the near future. Applications For rights to divert water from the Rakaia to supply two major Community Irrigation Schemes may have to be decided in the next 12 months or so. On the basis of present scheme designs, it is possible that the proposed level of abstraction will affect detrimentally present recreation and preservation uses of the river. The magnitude of this possible loss in regional welfare is not well established, while the anticipated regional income and employment benefits of the proposals are more clearly understood. The dilemma that confronts the Regional Water -Board is that the water allocation decisions will have to be made with limited knowledge of the consequences, especially when some of those decisions are potentially irreversible. A considerable amount of research in connection with the proposals has been carried out by the Regional Water Board, M.W.D. and M.A.F. in recent years. In some cases the level of understanding about certain parameters needed for allocation decisions is more than adequate and supported by well documented empirical evidence. However, there are other decision parameters for which present knowledge is inadequate for informed decision making, and still others where virtually no reliable information exists. The purpose of this study has been to establish what these information "needs" are, to carefully review and assess previous and ongoing research directed at fulfilling these needs, and to recommend priority research areas which can fill gaps in knowledqe and which take account of near-term and future planning requirements. The work was carried out by a multi- disciplinary group of social and physical scientists with backgrounds in economic project appraisal and social and environmental impacts assessment.