Flood damage costs still growing

By BRIAN FALLOW, economics editor

Farms and forests in the lower North Island have suffered up to $180 million damage in last month's floods, the Government estimates.

In addition, the cost of damage to roads and other essential infrastructure was about $65 million, give or take 30 per cent, Prime Minister Helen Clark said yesterday.

The figures are preliminary and likely to be conservative. They do not include downstream losses, such as the value which would have been added in dairy factories, meat works or saw mills.

Agriculture Minister Jim Sutton said MAF estimated about 2600 farmers were affected, but not all of them had been contacted yet and many were still trying to evaluate the damage to their farms.

But MAF's initial estimates are:

* Sheep and beef farms - $66 million. In addition to the losses from 5000 sheep and 150 cattle drowned, there are the costs of reseeding pastures, repairing fences, culverts and other damage, and the loss of production arising from lower lambing percentages, lower growth rates among cattle and lower wool weights.

This estimate does not include the long-term damage from erosion on more than a third of hill country farms in the areas affected.

* Dairy farmers - $41.4 million, from lost milk production, up to 1000 cows drowned, silt on pastures and damage to fences and water supplies.

* Cropping farms - $24 million. Crops were at a vulnerable stage, MAF said, with all the costs of production incurred except harvesting, transporting and marketing.

* Forests - $28 million to $49 million. This does not include farm forestry blocks and only includes the damage to trees, and not the costs of repairing roads, bridges, fences and other infrastructure.

The forest road reconstruction and repair bill would be large, MAF said. Forest companies generally construct roads 12 months before they are needed to allow them to settle and dry out.

This would not be possible if salvage of the downed trees was to be attempted, MAF said.

Many of the country roads which provide primary access to forests would be low priority for councils.

Helen Clark said in addition to bearing 100 per cent of the cost of repairs to state highways, under the standard recovery package central Government met 85 per cent of the costs of restoring other roads and bridges and 60 per cent of other essential infrastructure.

For the farming community, she said, the shape of the recovery package would depend on what others brought to the table: insurers and bankers, Federated Farmers and private funds, even Inland Revenue which might be able to be "helpful" over the timing of tax payments.

MAF said that typically farmers insured only houses, farm buildings and plant. For the few who did insure against natural disasters, cover was typically limited to $20,000.

Forests were typically insured against fire, but not wind, damage.

The damage so far

Dairying

Immediate losses $32.7m

Medium term losses $8.7m

Total $41.4m

Sheep, beef & deer

Immediate losses $28m

Medium term losses $38m

Total $66m

Crops

Immediate losses $24m

Medium term losses nil

Forestry

$28m-$49m

Roads & bridges

$45m-$85m

Total

$204m-$265m