TOP Leader Geoff Simmons digs into Dairy NZ's claim that proposed fresh water reforms could cost our economy up to $6 billion a year by 2050

TOP Leader Geoff Simmons digs into Dairy NZ's claim that proposed fresh water reforms could cost our economy up to $6 billion a year by 2050

By Geoff Simmons*

Moments after the Government and farmers reached a cosy agreement on emissions reductions proposals, the two camps were back at war over freshwater. On Thursday afternoon, Dairy NZ published an economic analysis of the Government’s freshwater proposals. Predictably the tone was of doom and gloom. So how much truth is there to their claims? 

Dairy NZ report

The Dairy NZ report estimates that the reforms would drop milk production by about quarter and cost our economy $6b per year by 2050. That sounds like a big, scary number, but – for context – in 2050 that is predicted to be about 1.1% of GDP. Given that Kiwis will be much richer by then, we might well respond that paying 1c in the dollar for swimmable rivers is a pretty good deal. That’s certainly how I feel. 

The Zero Carbon Bill is predicted to add a further cost of $1b per year by 2050. I have to say up front that I don't buy this. If we implement the freshwater reforms and milk output falls by a quarter, farmers will make mincemeat of our methane targets. 

Here’s the hidden kicker in Dairy NZ’s modelling: the average Kiwi will be slightly better off overall in 2050 with these freshwater reforms. That is just in terms of their back pocket, before we even consider the benefits of having swimmable rivers. Why? Because reducing milk production means reducing our dairy herd, which means lower greenhouse gas emissions. And this means our government can buy fewer carbon credits from overseas, which means we are actually better off as a country. So Dairy NZ’s modelling says that overall this reform is a win for everyone – except farmers. You won’t hear Dairy NZ shouting that from the rooftops. 

Dairy NZ have used the modelling to point out that farmers can make changes to improve water quality without having a massive impact on the economy. Its list of changes pretty much reflects what they should already be doing.

I'm not sure about the value add of these additional scenarios that Dairy NZ has modelled. Does it really expect Kiwis to accept the status quo when it comes to freshwater quality? Sure, some regions might be prepared to negotiate the pace of change with farmers, but are we really going to say it’s okay to pollute our rivers as part of doing business? I don’t think so. 

Critiques

The Environmental Defence Society (EDS) has published a critique of economic costings, claiming that the total costs of freshwater reforms will not be that high. It was obviously written in anticipation of Dairy NZ publishing a report like this, because many of the critiques EDS raises are actually included in the Dairy NZ modelling. This is dynamic stuff that most economic models miss, like the fact that if people lose their job in dairy most will go get another job and the economy won’t be that much worse off overall. In summary, dairy isn’t that big a deal to our economy, and besides economies adjust. 

EDS’s main critique of note is that the Dairy NZ economic modelling relies on previous modelling which estimates how farmers will respond to the changes. EDS argues that this underestimates the possibility for good farmers to find win/wins – i.e. reducing intensity, cutting input costs, and maintaining profits while reducing their environmental footprint.

The counter argument is that this sort of adaptation requires skill, and not all farmers will have the capability to do it. My counter to that counter is that if we use market-based mechanisms, capable farmers will expand and buy out farmers who perform poorly. Again, individual farmers may fail as a result of the reforms, but that doesn’t necessarily mean that dairy production will fall. The crucial point is that we need to give farmers incentives to improve their environmental performance. Sadly, this is something that the likes of the Green Party oppose because of their left-wing tendencies.

There will be an impact

On the other hand, the Government is clearly Pollyanna-ishly playing down the impact of these reforms. It is clearly mistaken in claiming that there will be no cost. The drop in dairy production may not be as high as the quarter suggested by Dairy NZ, but there will definitely be an impact. 

EDS estimates that around 10% of farms lie in catchments where real restrictions will bite. That doesn’t mean that all those farms will shut down, but some in those catchments will. 

Massive changes seem unavoidable in Southland and Canterbury, but the fact that the Dairy NZ modelling also pointed to Taranaki and West Coast (where there aren’t massive freshwater quality problems) again suggests it is exaggerating. 

The size of the eventual bill depends on how this is implemented - as mentioned above market based mechanisms will cushion the blow. It also depends on whether farmers can find some other profitable thing to do with that land. Again this was a major limitation in the model of how farmers will respond, which only switched farms between dairy, drystock, and forestry. What about organic dairy, manuka honey, pip fruit, or wine? There are so many options to explore, especially in the context of a changing climate. This is where research is urgently needed to help farmers adjust. 

As I have pointed out before, the big impact here will be the hit to land values rather than the economy. Farmers have been farming for capital gain rather than yield, and this has driven intensification even when it makes little sense profit-wise. Banks seem to have recognised this, which is why they have pulled back from funding farmers to reduce their risk. Farmers will have to start farming for profit rather than hoping for a bumper payment when they retire and sell up. 

Summary

In short, the $6b pa cost quoted by Dairy NZ looks very much like a worst-case scenario. Sure, ineffective farmers everywhere will need to exit the industry, but those who adopt new best practice will be able to continue farming profitably and maybe even expand. 

But the Government can’t get away with claiming that this will have little cost. A lot depends on how the reforms are implemented, and this is where the Government proposals have been woefully short on detail. In a few areas, farmers will almost certainly take a hit if we can't find profitable alternative land uses. This is where the research needs to happen, and urgently. 

Overall, I don’t think Dairy NZ’s case will persuade the Kiwi public to accept polluted rivers. At best, it might just buy them some time. 


*Geoff Simmons is an economist and the leader of The Opportunities Party. 

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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Sure, ineffective farmers everywhere will need to exit the industry, but those who adopt new best practice will be able to continue farming profitably and maybe even expand.

Yes, gotta love that new best practice, means everything and means nothing at the same time!

More an example of People making laws, that they the law makers & supporters need not live within. Especially the clean up and tune up of the city environments.

It's about as useful as 'swimmable'.
https://www.mfe.govt.nz/fresh-water/fresh-water-and-government/national-...

Focus on e.coli in rivers and additionally toxic algae in lakes. No mention on the page linked above of industrial or other unnatural pollutants.

Also, it mentions monitoring at recreational sites. Who chooses those?

Who chooses recreational sites? I'd have thought those that recreate there

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As far as I'm concerned any costs reflect the value free ride they have been given to pump all their personal c##p into our public resource. Time to pay up.

Well hit me down with a feather! Mr Simmons you have no idea what you are talking about! There has been no capital gains in dairy farming for at least 6 years and as any property market expert will tell you the market goes up or down based on profitability, interest rates, government policy and availability of capital.
Your ignorance shows very clearly that you don't understand these basic factors that have influenced land prices over time.
None of us farm to make a loss!
For the past 72 years successive governments have encouraged farmers to increase production by cutting bush down, planting grass seed & applying fertiliser etc, all for the benefit of NZ Inc. Now Jacinda has shut all future growth of pasture based production systems down and even worse shes ruling that we now have to drop production in order to be compliant.
There is no compensation being offered for the change in rules that every past governments and local governments have encouraged in order to feather their own nest, her actions are simply unfair given the history, unfair on all those people of the land that have made the wrong decision by following what our trustable governments have encouraged.
At the very least their needs to be an orderly approach by Government to this change, recognising that they the government are the reason farming is what it is today, and understanding that the radical changes they have made will/has put blood on the floor.
No other country has/would destroy its number one export earner with no suitable pastural production system to replace it (read Keith Woodfords reports on replacing pasture with crops and horticulture in NZ).
We all need to understand the consequences of our actions, all of NZ has benefited from the economic return of our dairy industry, we have nothing to replace it, our economy will melt away to that of a third world country if we dont handle the change properly by firstly finding suitable economic replacement production systems and then providing a suitable system of change without spilling blood on the floor.

I agree. Parents farm value hasn't changed significantly since they bought it 10 years ago. Theyll maybe make 5% more in the current market at best when they find a buyer...
The main difference for them from then till now is paying 4.5% interest instead of 12.5%

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Cry me a river. You guys have paid well over the top for land, purely based on the ability to exploit at no cost our public resource and with the hope of cashing in with a tax free capital gain. You were sucked in by John key and his bankster mates to take on debt, yet still put the blame on the greens, labour, Forest and Bird, trout fisherman - anyone but the promoters that you listened to.

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You seem to think all farmers are inherently evil and willfully damage the environment for exorbitant profits.
But I guess it's ok to turn a blind eye to the urban populations impact on the environment e.g. swathes of fertile land turned into subdivisions, sediment runoffs killing marine ecosystems, contaminated water from said Auckland fire being dumped into the ocean, household rubbish being dumped in conservation areas.
Be careful not to throw stones in that overpriced urban glasshouse of yours

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No, I don't think urban is without fault. In fact the entire problem can be rammed back to population control. More and more feeding from the same pot, more stress on resources all round, be it rural or city waste and effluent and so on.

The knobs running the show are in denial - people are the problem yet they think importing and breeding more is the solution. So we end up blaming each other - farmers blame the greens, the greens blame the farmers, the developers blame the rma. All a distraction. It's the people and more of them that is driving it all.

We are stupid. Rapidly destroying the best little country that was.

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Rastus, so you blame the greedy farmer who are no different to the greedy urban house owners and the greedy business owners and greedy wage makers. This world revolves around greed but at the moment its easy to for your type to blame the greedy farmers rather than work out how to fix your own problems! Farmers have been onto this issue for the last decade and then some, as we learnt the environmental cost of pollution weve changed our ways and most have spent a truckload of coin on mitigation and theres still more to spend but our pockets arent limitless.
You boys in town couldnt save yourselves without us so why bag the hell out of us! When I see travel in planes and cars drop then I know you urbanites are on the same wave!

Farmers have spent a billion plus on working to clean up waterways. Auckland city ratepayers have been spending on Watercare infrastructure constantly, and the Central Interceptor aimed at reducing overflow into waterways is a billion plus.

So, both farmers and urban folk have been investing in reducing pollution of waterways.

So youre intentionally adding to division by blaming the farmers for everything? Looks like you've taken the urban eco warrior bait hook line and sinker.

Oh dear, poor chap, he doesn't read interest.co, but still believes in the out of date neo Marxist pap we all supped on as teenagers: Farmers have been farming for capital gain rather than yield

Er, no:
https://www.interest.co.nz/rural-news/102198/farm-land-prices-are-not-ri...

Er yes. Just because the rule changed and they didn't catch on soon enough...

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=106...

That report rastus is from 2010 - a lot has changed since then.

RW -That was a selective period chosen by DC to fit his narrative (2008 to recent). As I outlined in the article if you look at dairy farms 91-2008 they went up 300%.
"..they're not making any more land eh"
Farming (and investment prop )has always been about long term cap gains in NZ

Capital gains is not what inter-generational farms are about - and that's a significant part of farming in NZ. Investors and syndicates on the other hand.......

"Clean fresh water will cost us $6billion a year". I'd rather we thought that $6billion will cost us our clean fresh water

We shit into potable water in NZ. We don't really deserve clean water the way we squander it

Economic analysis places no premiums on export earnings.
Fundamental that is.

In 2017 Ecan commissioned an economic report on the consequences of reducing dissolved inorganic nitrogen in the waterways of the selwyn waihora zone to 0.88mg/litre. This study found that economic output in the region would fall from $375m per annum to $75m resulting in "severe social and economic consequences". David Parker's plan requires that DIN be 1mg/litre, which is not much different, so the outcome would be much the same. It is hard to see how NZ will be better off by 2050 if we forgo $180 bn ( in 2020 dollars) in income in the interim. If city people think this is just a "farmer issue" wait until they see what will be in their rates bills when city issues are addressed." Similar rules for urban centres will come later because of the complexity of dealing with storm and waste water. Standards for urban drinking, waste and stormwater will closely mirror those facing farmers" says Environment Ministry principal advisor Bryan Smith.

If DNZ's figures can be trusted it paints a damning picture of just how much previously unacknowledged damage is actually caused by just one sector, worse still that costed damage is actually being inflicted on and paid for by other parts of the economy. I'd quite like to see the heavy road transport sector costed out in a similar manner, I think we'd find some interesting results there too

those who adopt new best practice will be able to continue farming profitably and maybe even expand. URL to support that statement?

https://www.newsroom.co.nz/@ideasroom/2019/08/21/763831/why-nz-should-sa...

Lincoln University Dairy Farm undertook a major destocking exercise in 2011/12 and again in 2015/16. The Lincoln lesson was that if one has fewer cows and feeds them better (on low-cost grass) then you get more milk at lower cost.

Let’s say that again: cow numbers went down but milk production and farm profitability went up.

In a nutshell, Lincoln got rid of its overstocking problem, reduced negative environmental effects and made money doing it.

But, but, but, oh you don't understand.

This characterisation as to what happened at the LUDF is at best a gross simplification and at worst a gross falsification. The LUDF was stocked in the earlier years of this decade at over four cows per hectare and with particularly high N applications of over 300 kg N per ha. Several years back they changed to a lower stocking rate of around 3.5 cows per heatare (still high by NZ average standards), employed some new technologies (e.g new pasture species), and reduced N applications (still high at about 160 kg N per ha). Production is actually back (down) between about 7% and 15% , depending on the year. Profitability is broadly similar. Nitrate leaching is back about 19 percent. The current LUDF intensity of farming is now broadly similar to many other farms in Canterbury, but N leaching is somewhat less than many and perhaps most Canterbury farms because of the specific soil types. And given that the cows are wintered off the farm, much of the broader system leaching will be occurring elsewhere. In terms of profitability I use the term 'broadly similar' because LUDF did and still does rank near the top but not at the top of Canterbury dairy farms for profitiability per ha. And the Lincon soils are superior to most but not all Canterbury dairy farms. The LUDF is a great example of how to farm with low cost systems and high milk production per cow (approx 1kg MS per kg LW, plus or minus depending on the year) and how to address some environmental problems. But it should not be used as a simplistic solution to the challenges that the dairy industry faces, because those challenges are a lot more complex than any solutions provided by the LUDF.
KeithW

Thanks Keith for your detailed response to Kate. Her post shows the common error of those outside the industry, believing they can take a report at face value without understanding/knowing the underlying basis of it.
Soil type is one of the biggest factors in leaching as you said, as is rainfall, and yet there is very little acknowledgement of these in leaching reporting in research such as the above. I am aware of two farms same number of cows, same all grass management system etc and yet one has a very significantly lower leaching rate than the other due to receiving one third less rainfall and having heavier soils.

I have concern that some of the examples for both N and GHG reductions being shown by sector groups currently, comes off farms that a number of farmers would say had high bottom lines to start with. This creates the perception with the public, (like Kate) and politicians that large reductions are easy to come by.

Both of you support my understandings. What you are essentially saying is that you want an equivalence of land-use profitability regardless the soil type/suitability for that land to be in dairy. I agree wholeheartedly with both of you - some soil types are suited to intensive dairying - others are not. AND on soil types suited to dairying, one can farm more profitably with fewer cows.

What you folks seem to be arguing is that if I rock up to the Melbourne Cup on a nag, I ought to have an equal chance of winning the race against the thoroughbreds.

Kate, No, I did not say I wanted equivalence of land-use profitability regradless of soil type / suitability. Definitely your words, not mine.
KeithW

No you didn't say it, but that seems to be the argument many in the farming community put forward. Surely you cannot be proud of what the environment of the Canterbury Plains has become?

but that seems to be the argument many in the farming community put forward. The saying "I know that you believe that you understood what you think I said, but I am not sure you realize that what you heard is not what I meant." comes to mind with regards your statement. ;-)

But answer the question, CO - are you proud of what the environment of the Canterbury Plains has become?

Kate, beauty may be in the eye of the beholder, but those parts of Canterbury that I see every day have never looked better. About three weeks ago we took a trip to Wanaka, going down through Central and returning via the coastal route. In my seventy plus years I have seen a lot of country, and in my opinion those parts of the island that we passed through are the equal of anything in the world. What I saw made me proud to be a NZer.

I'm not a Cantabrian Kate so I don't believe that I have a right to tell other communities that they should aspire to what I believe they should be. Part of the problem we have in NZ is others from far afield sitting in glass houses throwing stones at others, when those throwing the stones don't have their own houses in order. I'm all about catchments taking responsibility for their catchment waterways. It's the simplest way to improve water quality nationwide but NGOs seem to hate the idea. I guess they lose some of the power of influence they have via the media.
But my view of Canterbury is:
What's not to be proud of ;-)-Now there is less topsoil loss and therefore fewer dust storms due to land now being kept 'green' instead 'brown, thriving and more diversified communities, more diversified farming types, less smoke in the air due to less stubble being burnt due to cropping land now dairy, more native plantings on farm - due to old shelter belts being taken down, and lower growing plants (usually natives) needed where pivots have gone in. When early settlers first arrived, looking down on to the plains from the top of the Port Hills, they saw a treeless land. Catchments via zone committees are now charged with operating under rules that in time will improve environmental outcomes. There is a lot going on, on farms too. Some via projects like Carex which is winding down/reducing, some just communities working together. A lot you don't hear about. There has however, being varying degrees of water quality and degradation.
This link has an interesting and in my view, one of the most balanced reports, on the Selwyn river. It also gives hope that where communities take ownership of a problem, good environmental outcomes can result, though in some catchments due to lag times, it will not happen overnight. https://www.agriview.nz/fact-check/2018/9/10/qa-the-selwyn-river

The LUDF is a great example of how to farm with low cost systems and high milk production per cow (approx 1kg MS per kg LW, plus or minus depending on the year) and how to address some environmental problems.

Exactly what Casual Observer asked for.

No Kate -LUDF is NOT a great example of how to farm with low cost systems and high milk production per cow. It is an irrigated farm - irrigation is carried out on approx 2000 of NZs 14500 dairy farms. So hugely irrelevant for mainstream dairy in NZ.

So what part of the country do you want me to search out the evidence for? The below article covers both irrigated and non-irrigated dairy farms (the irrigated one pointing out he has reduced his irrigation requirement in line with the adoption of the regenerative agriculture principles);

https://thespinoff.co.nz/business/04-11-2019/with-the-walls-closing-in-r...

And then you have the economic explanation of the marginal cow;

file:///C:/Users/user/Downloads/The%20marginal%20cow.pdf

DairyNZ also studied this;

https://www.nddt.nz/site_files/13861/upload_files/MarginalCostofMilk(1).pdf?dl=1

Point about the LUDF - it IS a great example of low cost system/lower stocking rates and higher milk production. That its soil type differs from other soil types, and its inputs differ as well, does not make it any less convincing that fewer cows can = more profit.

Kate regenerative ag is in the eye of the beholder. https://www.nzherald.co.nz/the-country/news/article.cfm?c_id=16&objectid... Mixed pasture species is something we and a number of dairy farmers have been using for years, but we don't use the tag 'regenerative farmer'. Mixed pasture species is just part of the evolution of farming in today's world - usually the impetus is due to environmental considerations.

Forget marginal cow - your original comment was supporting that LUDF is an a good example of low cost/low stocking rate/higher production farm.
It is an implication that it can be held up as a good example for farms to consider following. But it isn't about its soils. It is about farming systems. Any farmer understands this.
LUDF is NOT a lower stocking rate farm, it is slightly above the average stocking rate for Canterbury at 3.5cows/ha. Nth Canterbury avg 3.43 Sth 3.44. Average for NZ in 2017/18 was 2.8cows/ha. https://www.dairynz.co.nz/media/5791052/quickstats-about-dairying-new-ze... It is irrelevant as a viable option to consider for the 86% of dairy farmers.
There are non-irrigated farms in Southland doing the same per cow production as LUDF, in our catchment. Nth Canterbury has highest national avg per cow production at 413kgs followed by Southland at 408kgs/cow. And Southlands avg stocking rate is 2.64cows/ha cow/ha - less than Canterbury.

Farmers are well aware of the regional differences in dairy in NZ. However, an economist and a fresh water ecologist does not a farming systems expert make. Interesting that they are both promoting irrigation in Canterbury by their quoting LUDF and that they consider a stocking rate considerably higher than the national average to be acceptable for their purposes. It is always easier to reduce inputs and become more profitable when you start from a very high/excessive stocking rate. The problem with that is it becomes an expectation that all farmers just have to reduce stocking rate to make more profit, but for the majority of farmers sitting around the avg stocking rate, that will not apply. There can also be an argument made for a higher stocking rate = more profit.

I always learn from your posts - so really appreciate that. But I think we're on the same page. In some cases, fewer cows = higher profitability and in some cases more cows = higher profitability.

But am I right in thinking that, as a general principle, where more cows = higher profitability which comes with more inputs (increased N application, new irrigation or increased irrigation, more supplementary feed, etc.) - then maybe that land/region isn't suitable as an example of a long-term sustainable place to undertake dairy farming?

What is top of my mind is the exponential rate of dairy conversions we have seen over the last couple of decades. All/most requiring high inputs to maintain the viability of the farm. Inputs that have been and continue to be exponentially harmful to the environment. And I ask myself whether they should ever have converted to dairy in the first place. Just as a son can't be responsible for the mistakes of his father, neither can the father be responsible for the mistakes of his son.

LUDF was not set up to be average - the intention was to push the envelope in order to see what emerged and how applied science could deal with it. In the initial stages this process was one of production/ costs, and only later was the issue of N leaching introduced, as a sort of extra bottom line.The focus ,however is still the same; to demonstrate the means by which a dairy operation can show a profit in a changing regulatory environment. That Lincoln is a very favourable location for dairying assists this process by largely eliminating seasonal variations, it does not imply that it is a gold standard for dairy suitability.

Kate, It often comes down to the skillset of the farmer and the farming system being used. Just as some doctors excel at surgery and others at general practice you get some farmers who excel at grass based systems, some who excel at high input. Genetics also can make a difference in production/cow. But don't be fooled by thinking only dairy is intensive. Farming is a complex integrated biological system.
Land use changes with time. Look at the horticulture now going in on what were once dairy farms, in the Waikato. If that continues at pace will future generations say 'that should never have been allowed to happen? They have poisoned our land with chemicals.' Perhaps they will, or perhaps they will say 'that was the right thing to do'.

Casual Observer is correct in pointing out that the LUDF system is deigned for a farm with reliable irrigation and hence weather resilience. A similar all-grass system is not going to give these production levels in most other parts of NZ because of the lack of resilience to drought, and the associated pasture-growth curve and pasture-growth volatility.
KeithW

Nutrient levels in New Zealand rivers are still low by international standards. Our most nutrient-enriched rivers have about half the average nutrient levels of rivers in Europe, North America, and Asia that have been reported by the Organisation for Economic Co-operation and Development.

So?

CO, in Western Europe there are tight nutrient controls on farms e.g. cropping fert use, animals inside and bio digestors etc. These countries have got onto the environmental problem a long time ago and used subsidies and tax breaks to help/encourage their farmers to change as they knew they needed their farmers to live e.g. a known food source for their people (food security is a key for any government).
However in NZ our government has little respect for the farming community as it easily produces enough food for the locals (97% of our milk products are exported) so there is little threat on our ability to feed our people. This is totally opposite to what happens in the rest of the world where each country puts huge value on its farming community as most other countries can barely grow enough food to support its own population.
NZ government and urbanites, however dont appreciate this fact nor do they understand the financial benefit NZ farming contributes to the economy. Without the Rural Sector NZ becomes a third world country!
The whole NZ education system is broken, our urban communities live on another planet, common sense isnt so common, we are ruled by what we see on a phone screen, modern world techology is making us dummer not brighter.
The Paris Accord that NZ has signed up to clearly states that there is to be no changes made that will effect food production. Jacinda's plans are in breach of this as clearly from all the work weve done farm production will drop in order for farmers to be compliant UNLESS their are incentives in the form of subsidies or tax incentives put in place to encourage farmers to develop capital intensive production systems that are environmentally friendly.
These systems have already been developed in Europe such as, Cow Barns that collect Nitrate with Bio Digestors attached that extract methane, direct drill effluent slurry wagons, robot milkers etc etc. These are expensive capital systems costing something in the order of at least $10-15,000 per cow. Clearly the rest of the world is moving very fast down this path whereas little old NZ is still stuck at a road block.
If the current government wants a future dairy industry that has a lower environmental footprint it needs to incentivise change not bash the sh@$ out of farmers hoping they will change or just disappear.

Grumpy, I agree with what you broadly say, however lets not get too hung up about Europe's environmental rules. Even though they have rules in place, the EU ground water nitrogen level charts have <25mg/l as the lowest report measurement, and freshwater at <2mg . https://ec.europa.eu/environment/water/water-nitrates/pdf/nitrates_directive_water_quality_infographic.pdf
And they aren't necessarily enforced. The Netherlands can't meet the EU limits of 170kgN/ha of applied animal effluent (in Southland ours is 150kg/n/ha and has been for years) so they have successfully applied to the EU for a derogation that allows them to use up to 250kg/n/ha. And they have successfully applied for one for years. Direct drill of slurry tankers are a large part of that.
https://www.rivm.nl/bibliotheek/rapporten/2019-0026.pdf

Ireland's all sector farmers received an average of 59% of their total 2018 income from subsidies - other EU countries are similar. In effect they have a bankrupt ag sector.

I spoke to a large scale kiwi farmer that put in a bio digester on one of their farms. Wouldn't do it again due to the cost, but also the resistance of the energy sector to take what energy was produced.

I was at a public meeting recently where the future of farming was being discussed - organised by One NZ. A lot of talk about needing to get more $$$ for ag products. When asked about what they suggest for NZ consumers due to the current link between international and domestic ag product pricing, and how any increase internationally would be met with increase in NZ consumer price, one response was to have a two tier food system. Tier one is our our good quality ag which would go solely to export and Tier two would be to import food of a lower quality and sell it cheaper for NZ consumers. There was an uncomfortable silence after that remark. But also IMO a dawning of the realisation that is isn't as simple as saying 'we need to get higher prices offshore'.

Interestingly enough, most of the negative comments in this stream are about dairy. But as the recent Sunday show farming segment showed, it is not dairy that will necessarily be hardest hit. In gunning after dairy the govt proposal in fact creates significant impact on the non dairy sector. That is not to say dairy won't be affected it will, but the downstream effects will hit will rural and provincial communities hard.

Where we are being let down is that the reality of NZ overall has good water quality - that doesn't mean that some areas don't have significant water quality issues - and the ag sectors are among the worlds ag lowest ghg emitters - Fonterra's products are half that of the EU. But this government doesn't want to acknowledge those facts as it would not play well in to their hand of virtual signalling to the rest of the world.

Traditionally weve relied on a low dollar to compete offshore, unfortunately its the low dollar that makes the capital cost of change so expensive in comparison to the rest of the world. The bio digesters in Europe were incentivised via high depreciation rates and a move to replace nuclear power, so little reason to use them here apart from possibly controlling methane output. I cant see biodigestors working in NZ unless they are fed 24/7 by a constant supply of effluent e.g. from a fully housed cow system, even then weve got little incentive to do so due to our cheap hydro energy.
Europe will have to wait decades for nitrates to drop out of the cycle provided they can stop the inputs without affecting food production. This I see as impossible as N will always be required to grow enough food for the growing populations and N is difficult to stop leaching due to the uncontrolables. Limit human population and then we can start the cleanup of the environment??
You are dead right about the negative comments on dairy, everyones going to get hit including the hort and market gardening boys. The real issue is that the whole games becoming to complex for the average farmer and there certainly arent enough educated advisors/consultants/experts (politicians) etc to get even close to working through this massive cluster fu#@ the governments created.
Looking in my crystal ball it shows very clearly that few farmers can afford to spend any capital on change, so that means we are reliant on god to produce the magic fix or we are simply going to have to reduce production by less cows, less nitrogen, no imported off farm feed. All of this will destroy the NZ economy as a farm use change to say cropping, market gardening, kiwifruit is only possible on a small percentage of our soil types and regional climates and this needs huge capital which is now very limited in NZ (bring back foreign investors??).
I think at the end of the day there needs to be balance, at the moment that is in the form of Winston Peters, and I dont see to much help coming from National at this stage.

Balance is not something NGOs and David Parker seem to understand in an environmental or social context. The proposals as they stand won't allow any increase in cropping or vege in majority of the country anyway, so for many even diversification isn't an option - until after 2025. Conversion to sheep or forestry are the only options and as the sheep folks are selling out to forestry.........
Will be interesting to see what does shake out of the tree as the final draft....The restlessness out there is just waiting for the spark.....

Great post!

Instead of chasing phantoms lets stick to our guns and monitor the results.

It's fascinating who wasn't invited to discuss the new Freshwater proposals, Fish & Game get a say and not NZ's leading freshwater scientists and toxicologists? The NZ Soil and Health Association and Physicians and Scientists for Global Responsibility wrote a comprehensive paper on the failings of the Freshwater Policy to acknowledge chemical pollutants in waterways which you can find here https://organicnz.org.nz/submissions/submission-on-healthy-waterway-prop... if you’re interested.

An outstanding point, that clearly shows theres been little discussion prior to releasing the National Policy Statements.

Fish and Game charge over $100 a year to shoot ducks and catch an invasive fish species that tastes like mud, then plays eco warrior running down the rural sector pretending they care for the environment.
Pretty obvious to even the casual observer they only care for trout fishing and duck shooting, not the environment

Perhaps we should suggest a working party to see if Fish and Game should be cut loose from government funding. ;-)

Environment Ministry principal adviser Bryan Smith in NZ Farmers Weekly Nov 4th says "a common misunderstanding is that 1mg/l is unobtainable or is really low but the reality is most waterways are actually below 1mg already"
The article by Neal Wallace says that those above tend to be about 1.5mg/l or 1.6mg/l.
so 6B/year (Dairy NZ) or 9B/year (Beef and Lamb) or somewhat less according to Geoff all for what exactly?

Hahaha, "paying 1c in the dollar for swimmable rivers is a pretty good deal." How I laughed when I read that. Not just the idiot maths, but the assumption that rivers are unswimmable - specifically because of dairy farming. He's got the virtue signalling turned up to 11. I bet he doesn't even swim in rivers.

Right on Geoff Simmons. Farmers say they have been doing good stuff for the environment – I see it every day. I also see they need to do one hell of a lot more. None of us saw global warming coming 15 years ago. It’s here. Everyone needs to do their part. I’ve retired 34ha – to revert to native bush this year. I don’t want a medal, I don’t want a payout, I don’t want carbon credits. Its my very small part to play for living on this planet.

What else are you doing Stu? Retiring land where it is appropriate is great - but it in itself, is not enough. We started doing that around 20years ago. Retiring land to revert to native bush is not an option for many farmers.

"in 2050 that is predicted to be about 1.1% of GDP. Given that Kiwis will be much richer by then..."

Lost me already Geoff
Clearly you have no idea whats coming - you dont even know where wealth comes from

There is a saying about not looking a gift horse in the mouth. When we see the consequences of the Australian drought now in its fourth year for some, with many who would walk off if only they knew where to go, we should be thanking our lucky stars for the water we have, and not quibbling over whether it is 1mg/litre or 1.6mg/litre dissolved N. Wasn't it the Jesuits who spent a lifetime arguing over how many angels would fit on the head of a pin? and while they were doing that achieved b..... all else!