PROJECTS

Hawkes Bay Irrigation Plan, New Zealand

The problem

The Ruataniwha Plains, an area in New Zealand’s Hawkes Bay, were unsuitable for high value horticultural and dairy farming because they faced periodic droughts. Local farmers and a leading commercial bank wanted to develop an irrigation scheme to make the land more productive but weren’t sure it would be profitable.

How we helped

Castalia assessed the commercial viability of the scheme. We forecast demand for irrigation and assessed volume risk for the proposed Ruataniwha Plains Water Storage Project. We developed a land use optimization model predicting how farmers would switch to irrigated crops once water was available. We confirmed the analysis through a survey of all farmers in the region as well as focus groups to assess willingness to pay for reliable water supply. We assessed farmers’ willingness to switch land use given their current skill set and farming experience. We constructed a model of change of ownership based on farmer age profiles, expected hand-over rates and typical land sale trends and developed a long-term forecast of uptake in irrigation connections.

Impact

Although our analysis showed that the Ruataniwha Plains Water Storage project was commercially viable, the scheme could not secure the necessary environmental permits, and so did not proceed. Instead additional groundwater abstraction was allowed, threatening the local aquifer.