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Economic Impact of Aquaculture in the Waikato Region

TR 2007/33
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Report: TR 2007/33

Author: Reuben Irvine, Mark Robinson and Andrea Carboni (COVEC)

Abstract

This report estimates the economic impact of the aquaculture industry on the Waikato region’s economy in terms of the additional GDP and employment it generates. It is envisioned that this research will help inform the decision making process for coastal planning in the Waikato region. This is the first study of its type in New Zealand that estimates the regional economic impact of existing aquacultural activity.

Aquaculture began in the Waikato region in the late 1960s with the establishment of inter-tidal oyster farms. It now also involves a relatively large amount of mussel farming and some shellfish processing. The Waikato Regional Coastal Plan identifies marine farming as an important industry that provides for the social and economic wellbeing of people and communities, primarily by creating jobs and contributing directly and indirectly to the local, regional and national economy.

Aquaculture industry

The total value of aquaculture production throughout New Zealand was approximately $289 million in 20041. Mussels accounted for $181 million, with 645 farms encompassing 4,747 ha of marine space. This produced around 95,000 tonnes, over three quarters of which was exported, bringing in around $120 million in export earnings.

Oysters accounted for $26 million, with 230 farms covering 750 ha of marine space. This produced just under 3,000 tonnes, two-thirds of which was exported, bringing in close to $15 million in export earnings.

Regional production

The aquaculture industry in the Waikato region consists of around 40 core businesses that carry out a range of activities. The dominant form of aquaculture in the Waikato region is mussel farming, with around 900 ha of active mussel farms producing over 21,000 tonnes annually. Thus, mussel farming in the Waikato region accounts for around 20 per cent of national mussel production. Oyster farming in the Waikato region is relatively small in comparison, with less than 70 ha of farms producing around 640,000 dozen oysters per year, accounting for around 10 per cent of national oyster production.

Most aquacultural activity occurs in the waters around the Coromandel Peninsula, although there are a few small farms on the west coast.

The total mussel harvest size across the region has been increasing over the past few years. The total harvest in Coromandel in 2006 was around 21,000 tonnes of mussels, compared with 17,600 in 2005 and around 16,000 in 2004. 2007 began with greater harvest sizes than the corresponding months in 2006.

Economic impacts

Aquaculture contributes approximately $27 million to Waikato’s annual regional GDP. This is the total value, or wealth, added to the regional economy because of aquacultural activity. This impact of aquaculture can be broken down between the impacts resulting from farming activities (including harvesting) and those from processing activities. The farming of mussels and oysters accounts for around 70 per cent of the industry’s impact on regional GDP ($19.1 million), while processing accounts for the remaining 30 per cent ($7.8 million).

Economic impacts can also be broken down by direct, indirect and induced impacts. The majority ($18.9 million) of the $27 million contribution to regional GDP comes from the direct impact of revenue earned from within the aquaculture industry itself. Indirect impacts include the value-added by those who provide inputs to the aquaculture industry, eg fuel, utilities, professional services (accountancy, legal services, etc). These indirect impacts contribute $3.7 million to regional GDP. Induced impacts, arising largely from the spending of households who receive wages and salaries resulting from aquacultural activity, contribute a further $4.3 million.

Direct employment within the aquaculture industry itself equates to around 270 full time equivalent (FTE) positions. Because a large proportion of jobs are seasonal, especially within the processing sector, just under one-third (140) of the approximately 400 individuals directly employed in the industry are employed on a permanent full-time basis. Total wages and other remuneration received by employees within the industry is around $10 million.

As well as generating direct employment for 270 FTEs within the industry, with employment split roughly evenly between farming and processing, aquaculture generates the equivalent of an additional 100 jobs throughout the region as a result of flow-on effects to other activities and industries. Accounting for both indirect employment effects as well as employment within the industry itself, aquaculture generates employment for a total of 370 FTEs throughout the entire Waikato region. Around half of this total employment impact is the result of farming activity, the other half results from processing activity.

Economic Impact of Aquaculture in the Waikato Region [PDF, 230 KB]

 

Footnotes

  1. New Zealand Aquaculture Council.