Sask. study finds that $26.5 million in irrigation spending resulted in an $86.6 million GDP benefit over 20 years
MOOSE JAW, Sask. — An economic analysis of irrigation infill development in Saskatchewan found that public investment in the sector is well worth the money.
Jillian Brown of the University of Saskatchewan told the recent Saskatchewan Irrigation Projects Association conference that 8,472 acres were developed from 2011-16.
That development cost $26.54 million — $21.13 million from the federal government and the rest from the districts where the infill was developed.
“The total economic impacts of this development in Saskatchewan over a 20-year period were estimated to be $200.83 million in output sales, $86.6 million in GDP impacts (and) $62.48 million in impacts to household income,” said Brown’s research.
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“Associated with these changes, another 1,179 FTE (full-time equivalent) jobs were estimated to have been created as a result.”
This is the equivalent of $1,185.26 per irrigated acre in annual output.
As well, she said it would take just two years to earn back the government investment when using these numbers.
Brown said the public doesn’t always see the benefits of irrigation because the obvious impact is at the farm level.
However, she said her work indicates how widespread the dollars go.
The government investment in the study period works out to about $3,100 per acre, while the farmers invested about $1,200 per acre on their farms.
“All of that is going back into the province,” Brown said.
She also calculated the regional level effect of the five-year infill expansion in the Lake Diefenbaker Development Area (LDDA), where the work took place and where about 32,250 acres of development could be feasible.
She said spending on farm inputs alone totalled $25.53 million.
Farmers surveyed for her research reported $57.68 million in revenue, and $49 million of that was spent within the LDDA.
For every dollar invested in irrigation within the region, $1.44 is generated in output sales, she said.
Brown suggested one way to point out the value of irrigation investment beyond the farm is to look at what would be lost if certain acres were farmed under dry land conditions.
“Of 116,485 acres irrigated during 2011 in the LDDA, if those were to have been dry land as opposed to irrigated, we would have been looking at a loss of $116.52 million in output sales or $1,000.39 per acre in output sales lost,” she said.
It would also mean a loss of 11 jobs for every 1,000 acres.
“The producer investing the full amount for irrigation development isn’t justified when the impact extends far beyond the farmgate,” Brown said, adding there is no way to put a value on risk management and cropping options that irrigation will provide as the climate changes.
