29 May 2014

PGPs could yield big returns

1:08 pm on 29 May 2014

A report which suggests the Primary Growth Partnership (PGP) will bring economic benefits is attempt to head off the Auditor General's inquiry into the scheme, Labour says.

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Photo: PHOTO NZ

The Government, which commissioned the report, intends to spend $333 million on 18 research and innovation projects under the PGP programme, designed to boost productivity and profitability across the primary sector.

The New Zealand Institute of Economic Research (NZIER) report released on Wednesday suggests the economy could benefit by $11 billion a year by 2025, if all the research and development work is successful.

But Labour Party primary industries spokesperson Damien O'Connor said the analysis was based on unrealistic, best-case scenario assumptions.

"This report is a desperate attempt by the minister to try and justify spending on PGP," Mr O'Connor said.

"He knows full well that the auditor general is soon to release its assessment on what has been going on in PGP, and the value of the taxpayers' investment."

Primary Industries Minister Nathan Guy said while the report showed the PGP could massively benefit the overall economy, it would also have a very real impact on the farm.

"And when you break all these numbers down it's quite exciting for our hill country farmers - NZIER are estimating returns of $270 a hectare for the hill country farmer."

Mr Guy said there could also be a $600 per cow benefit for dairy, the seafood industry could gain around $370 a tonne and forestry $190 per hectare.

NZIER said its report assessed innovation, and research and development, which were uncertain and risky processes. However, it had assumed all the science was sound, it said.