Economic Impact Assessment of Irrigation Development and Related Activities in Manitoba

Abstract

Irrigation development is a capital-intensive process, which must compete with other uses for capital resources at the provincial level. In order to make a decision in favour of irrigation development, policy-makers must know if irrigation development is good only for the irrigators or is in the best interests of society as a whole, particularly in the rural Manitoba context. This study was undertaken to estimate the external (beyond irrigators) economic impacts of irrigation development. A regional input-output model, coupled with an employment model, was used for this estimation. All activities were broken down into those for the investment phase and those for the production phase. Investment phase activities bring forth economic impact only once, whereas those from the production phase are recurring in nature and last as long as the productive life of the capital assets. Results indicate that irrigation creates a significant amount of economic externalities in rural Manitoba: 7,349 jobs are created during the investment phase (about 735 per annum, assuming a 10-year adoption period), while during the production and processing phase 1,981 jobs per annum are created; 411 jobs at the farm level. Thus, for every job at the farm level, there are an additional 5.5 person-years of employment created during the investment, production and processing of irrigated products. Similarly in terms of gross domestic product, every hectare of irrigation generates an additional $10,680 worth of new wealth in the non-farm economy of Manitoba.