The first such study, done by AgFirst agricultural economists Erica van Reenen and Phil Journeaux, quantified the benefits of installing onfarm stock water systems on hill country farms.
The study last year involved investment analysis of 11 hill country sheep and beef farms across New Zealand where farmers had invested in stock water systems.
“There had been anecdotal reports of how good stock water systems contributed to production but not a lot of evidence.
“There had been little pockets of private work done but nothing publicly available so we thought it was a good opportunity to quantify the benefits and put some analysis around it,” van Reenen said.
“Our study was driven by the perceived actual benefits and the economics.
“We were confident the result would be positive but we have been blown away, the end result was staggering,” she said.
The analysis showed a significant return on investment for all of the properties.
The average internal rate of return was 53% with a range of 14-85%.
On average, the time it took to repay the initial investment was just three years.
Without fail, every single farmer who took part in the study said their investment was a good decision, van Reenen said.
There was improved pasture use and production, improved stock numbers and stock performance.
Providing stock with alternative drinking sources reduced pressure on waterways and allowed environmental improvements that couldn’t otherwise be made.
Waterways, wetlands and dams could be fenced while riparian strips were planted and regeneration programmes started.
“From and onfarm perspective there were significant gains in grazing management, production and performance.
“From an industry-good perspective there were huge environmental benefits and that is a particularly important factor given the increasing environmental pressure farmers are facing,” van Reenen said.
The key for farmers was the practical advice for other farmers contributed by farmers in the study.
“When asked what their main advice would be to farmers contemplating installing a water scheme, the unanimous response was ‘Just do it’,” van Reenen said.
The report was jointly funded as a regional economic development initiative by the Ministry for Primary Industries, Ministry of Business, Innovation and Employment and Beef + Lamb NZ.
The full report can be read at www.mpi.govt.nz
