The Taieri-Tokomairiro Plains south of Dunedin are an area of fertile sheep, fat-lamb, and dairy farms, but the richest farming districts are included within Bruce and Clutha counties and are associated with the lower course of the Clutha and the South Otago downlands that stretch between Balclutha, Clinton, and Waikoikoi. A system of mixed farming prevails, the bulk of the income being derived from livestock, fat lamb, and wool, and small seeds and crops. Both in Bruce and in Clutha counties the number of sheep shorn has increased by over 60 per cent – 69·51 per cent in the case of Clutha – and the increase in lambs shorn has been extraordinarily rapid, though the numbers involved are relatively small. Of the million and a half increase in sheep numbers, Bruce and Clutha counties alone have sustained approximately 40 per cent of the increase, and the greatest potential for pastoral development is located in these districts.
The greater part of eastern Otago has a higher rainfall. Dunedin has a mean annual rainfall of 31 in. and in the Balclutha district the rainfall increases markedly in the south-eastern areas, rising to over 50 in. in the Catlins. This area of steep and isolated hill country was originally bush covered, in contrast to the lowland tussock country of the downlands and the highland tussock country of the Kaihiku Ranges south-east of Clinton. The highland tussock areas were farmed from the earliest period of settlement (the Catlins not until after 1894) and they are at present worked in large grazing runs averaging about 5,000 acres. With heavy machinery tussock pastures are resown and respond to liming and other fertilisers; but pastoral development in the Catlins is hampered by isolation, high costs, and reversion of pasture to second growth. It is one of the few parts of the South Island that are reminiscent of the wetter North Island hill country. Deep-green swards in the valley bottoms are surrounded by heavily reverted pastures on the steeper slopes through which the stumps of half-burnt trees occasionally protrude. The summits of the hills are covered with second-growth forest and, in the more isolated parts, virgin bush still stands, some of which is still being milled.