Diversifying Southland's economy; easier said than done

Southland’s long-term economic plan is probably easier to write than to put into action. We as a province have a job on our hands.

Southland leaders have been working towards diversifying Southland’s economy.

Analysis: I’m wary about casting any sort of negative cloud over Southland. There’s plenty to like about what’s going on in the province and plenty to like about its future.

When starting The Southland Tribune part of it was to ensure Southland’s success stories are celebrated and to champion the region where possible.

But it would also be wrong to ignore any struggles, setbacks, and hurdles Southland has to clear.

The past fortnight or so has offered up a couple of blows in the province’s quest to diversify its economy.

Southland’s long-term economic plan is probably easier to write than to put into action. We as a province have a job on our hands.

Some of it will also rest on decision-makers outside the region.

Probably the biggest setback came last week. A resource consent application from Ngāi Tahu Seafood to construct and operate an open ocean salmon farm off the coast of Stewart Island was declined.

As part of the Beyond 2025 Southland Regional Plan aquaculture had been identified as a potential $1 billion industry for the region.

Ngāi Tahu’s Hananui Project was a key component in that.

The independent panel that declined the consent acknowledged the proposal would have significant benefits for the wider Southland community.

They stated the decision to decline the resource consent was made with a “heavy heart”.

Ngāi Tahu is now reviewing the decision.

The resource consent application was made in May 2021 under the Covid-19 Recovery (Fast-track Consenting) Act 2020 to develop an area of approximately 2,500 hectares off the north-eastern coast of Stewart Island/Rakiura.

The panel - chaired by Clare Lenihan, with Reginald Proffit and Sharon McGarry -stated the decision to decline the application was based on environmental factors.

Sandford Limited also has plans to farm salmon in Foveaux Strait waters about 28km from Bluff.

Although what last week’s Ngāi Tahu decision means to their plans, time will tell.

Many Southland leaders have talked with excitement about the prospects of aquaculture for Southland for many years.

When the previous Southland Regional Development Strategy was put together in 2016 aquaculture was identified as a key focus area for the region. Along with a rejuvenation of Invercargill’s city centre, which has happened.

Invercargill Mayor Nobby Clark has been one of those who have spoken publicly, with a sense of excitement, about what aquaculture could offer up in diversifying the Southland economy.

Clark says he is frustrated by the decision and hopes Ngāi Tahu appeals it.

“It’s put a major roadblock into the development of aquaculture,” Clark says.

“I’m seriously disappointed. When I consider the reasons and what I hear about the research that went into that application, which looked at potential for damage to the environment, and impacts to the land, and all that sort of stuff, I’m seriously disappointed the panel of three decided to decline the application.”

“It’s really disappointing for a region that is trying to divest away from primary agricultural food productions into some alternatives and spread the load. It’s a major disappointment.”

The decline of the salmon farm resource consent came hard on the heels of news that a proposed plant-based milk factory for Makarewa would now be built elsewhere, most likely in Canterbury.

Great South - who is a 49% shareholder in New Zealand Functional Foods - has talked up the move as still being a positive for Southland.

Great South chair Ian Collier said it was still a great opportunity for Southland, with world-leading Southland-grown oats now able to be showcased on a much bigger platform.

Others in Southland are not so thrilled by the move, and what it will mean for Southland’s quest for economic diversification.

The proposed plant-based milk factory was also identified as a key component as part of the Beyond 2025 Southland Regional Plan that was released in June.

It identified that it would create 100+ new jobs through construction and 70 skilled jobs thereafter.

We might as well rip the band aid off completely and point out last week’s reduced Fonterra Farmgate Milk Price forecast as another blow for a province like Southland, where dairy farming is prominent.

Although it should be acknowledged that drop in farmgate milk price is expected to be a short-term impact rather than a long-term hit for a province like Southland.

It does though provide a reminder just why there is a quest to diversify Southland’s economy to ensure we don’t remain over reliant on the likes of agriculture and the smelter at Tiwai Point long-term.

Green hydrogen and data centres have also been identified as potential new industries for Southland.

Clark believes having an abundance of renewable energy is a key in attracting new industry to the region.

“We don’t want to hang our economic future just on the hydrogen plant. While the hydrogen plant is a great concept, hopefully it will get where it needs to be. But we need to be diversifying our economy much wider than that.”

The Government announced last week a Southland wind farm project would be fast-tracked through consenting.

The Southland Wind Farm proposed by Contact Energy would have 55 turbines at a site east of Wyndham.

Although Clark now has concerns about the outlook of offshore wind farms following the decision to decline resource consent for Ngāi Tahu’s salmon farm plans.

“It does also raise a much wider issue around offshore wind turbines, because we a looking for renewable energy, will they be up against the same sort of issues when it comes to getting consent? It’s a frustration.”