Federated Farmers puts farm damage from cyclone at about $1 billion

Wednesday, 8 March 2023

Federated Farmers’ cost estimate includes lost income as well as damage to farms.

Federated Farmers says the total cost to farmers of Cyclone Gabrielle may top $1 billion.

Chief executive Terry Copeland said the “educated guess” was its estimate of the “total on-farm costs” of the cyclone, including income disruption, infrastructure repair and the cost of restoring crops and orchards for all affected farmers and growers.

It also includes costs from the earlier Cyclone Hale.

He believed the estimate meant the cyclone was shaping up to be the country’s “most expensive weather event”, but it came in the context of initial fears that the total cost to the economy could run into the tens of billions of dollars and rival that of the Canterbury earthquakes.

Finance Minister Grant Robertson had estimated the fiscal cost of the cyclone to the Government would lie somewhere between that of the Kaikoura earthquake, which Treasury at one point estimated would total $2b to $3b, and a figure close to $13b.

* Will disasters like Cyclone Gabrielle widen the city-rural divide?

* Farmers get $5 million of quake relief from Government

But Reserve Bank deputy governor Christian Hawkesby later said the cost of the flood damage to insurers was likely to be in the same order as that they faced from the Kaikoura earthquake, rather than the Canterbury earthquake “which was a much higher order of magnitude”.

Copeland said there were areas that look like a lunar landscape with “just everything wiped out”.

“There are farmers and growers whose livelihoods and everything they own have been stamped out overnight.

“Honestly, the cost is still being counted,” he said. “There will still be farms on the East Cape, for example, who haven’t been able to get out to the back of their properties to do an assessment because of destroyed access.”

Stock losses would be in the “many, many thousands of animals”.

Horticulture businesses in particular had suffered significantly damage, he also said.

There were plenty of farms in Tairawhiti with 10 kilometres or more of fenceline slumped or washed away, he said.

Rural insurance specialist FMG had already handled more than 3000 claims from the cyclone and the sums involved, the stress on families and the hit on production and incomes in rural areas were “horrendous,” he said.

“Recovery is going to be a very long haul and, quite rightly, serious questions are being asked about where, and how, to rebuild roads, bridges, rail, electricity sub-stations and other infrastructure.”