Geoff Simmons asks what plummeting milk prices mean for our fresh water. With farmers under financial stress does that means the environment is in second place?

Geoff Simmons asks what plummeting milk prices mean for our fresh water. With farmers under financial stress does that means the environment is in second place?

By Geoff Simmons*

This year milk prices have soured like a bottle left in the sun.

There has been much wailing and gnashing of teeth about the economic impact of the fall in prices, but what, if anything does it mean for our fresh water?

In the short term the price drop is probably good news, and it should keep getting better as dairy companies such as Fonterra help farmers improve their practices.

But the long term question always depends on what the milk price does next year, and whether that will precipitate another round of dairy conversions.

The fall in milk prices

We’ve all heard the news – milk prices have dropped from over $8.40 to $4.70 per kilo of milk solids (the powder that is left once you get rid of the water) in less than a year.

This has led to a predictable squeal from farmers, whose incomes will fall by around $6 billion, the rural economies that depend on their spending and the Finance Minister, whose greatly coveted budget surplus is now at risk (this could wipe 2.7% off the nation’s GDP).

It all goes to prove that old adage – that it takes a year for a farmer to recover from a bad year, but it takes three years to come down from a good year.

Anyone who thought they could bank on milk prices staying at record highs has had a reality check. Thankfully that seems to be pushing the price of dairy land down, as new farmers look to escape crippling debt levels that they may not be able to service.

However, the dairy industry still has $32b of debt to service, and international milk prices have yet to bottom out. Thankfully the easing exchange rate and interest rate expectations seem to be offering some relief. Still, a couple of years of poor payouts could start to see some nervous farmers, particularly if that is backed up by a drought, which is threatening in the east of the country.

Tough times means belt tightening ...

Bad times for any business usually mean bad times for the environment. The recent Global Financial Crisis has seen many governments around the world shelve environmental pledges (such as reducing carbon emissions) in favour of chasing economic growth.

Farming is no different. Good economic times are necessary to make the investments needed to improve the environment. When farmers’ backs are against the wall, some start cutting corners, and the environment can suffer. It is dangerous for any self-respecting greenie to gloat over difficult economic times.

However, according to the latest report on the Sustainable Dairying: Water Accord, the vast majority of dairy farmers have already made the major investments urgently needed to improve water quality.

Some 94% of dairy farm waterways are now fenced (although the dairy companies haven’t quite figured out how to ensure their data is robust and consistent), and 93% of farmers have compliant effluent management systems.

These numbers aren’t good enough – without a doubt they both need to be 100% – but a poor milk payout this year won’t delay progress too much.

The real question the dairy companies have to face is how they will deal with this hard rump of 6-7% of farmers that drag the chain on basic environmental issues. At the moment their threats not to pick up the milk from negligent farmers look like a load of hot air. They have to front up on this issue to retain any real credibility in this space.

The only outstanding investment in the Water Accord is riparian planting. Farmers have plenty of time (until 2020) to prepare a planting plan, and as yet there is no deadline for implementation. So this is the only environmental investment that could potentially suffer at the hands of low payouts.

... but also spend less on inputs

The main issue facing dairy farmers is now nitrogen leaching, which we have talked about previously.

This problem is caused by cow pee, which is so intense that it can’t be picked up by the soil, so ends up draining into waterways and contributing to the growth of the weeds that choke our rivers and lakes. The more cows there are standing on pasture, the worse the problem will be, although exactly how bad depends on the local soil and weather conditions.

The only solution to this problem is keeping cows on a feed pad or inside, so their urine can be collected.

Housing cows and providing them a meals-on-wheels service (the US or European dairy model) may be better for our rivers, but it is expensive.

New Zealand’s dairy industry was built on a low cost model, where cows roam free and get their own dinner. This low cost model is what allowed our farmers to profit when milk payouts were regularly closer to $5 per kilo of solids.

The good news is that most farmers can still switch back to this low cost model to weather lower prices. The even better news is that reducing cost means less fertilizer, less palm kernel, and fewer cows peeing on the grass, which all adds up to a win for our rivers.

Fonterra is trying to help

The dairy companies are all trying to help their farmers understand their nitrogen situation. Currently this initiative is still in the embryonic phase – only 56% of farmers have provided their nitrogen data so far (all are required to under the Accord). This is a disappointing result, but clearly this is a new concept and will take a while to catch on.

Once farmers are measuring nitrogen, they can work with Fonterra’s advisers and a nifty new tool to manage it. And ultimately it is in their interest to do so – nitrogen is a valuable nutrient, and the more they can keep on farm, the more grass they can grow and the lower their costs will be.

There is much to be gained for the environment and profits by getting farmers to be more efficient with the nutrients they use.

fontera-nitrohen

In the long run ...

However, efficiency can only go so far.

The ultimate fate of our rivers depends on how we use our land – particularly how much is converted to dairy.

Dairy NZ and Federated Farmers continually push the line that certain catchments have headroom for more dairying.

What they mean is that some of our rivers and lakes aren’t trashed yet, so let’s keep going.

This is irresponsible – the National Objective Framework calls for the quality of fresh water to be maintained or improved. That means any new dairy farm needs to show how water quality will be improved elsewhere in the catchment.

In some areas the challenge is even greater. The harsh reality is that in some catchments there are already too many cows producing too much nitrogen for the fresh water to cope with.

In these areas we are seeing severe threats not only to the stuff living in rivers, lakes and estuaries, but sometimes even to the drinking water of rural communities. There will be no alternative but to de-intensify the farming in those areas – another issue that the industry is surprisingly quiet on.

The lower payout has caused many potential converters to pause for thought. But if and when milk prices rise again, the pressure to convert will no doubt return. By then farmers lobby groups and Fonterra need to have a more plausible answer to three crucial environmental questions:

  1. How will they deal with the hard rump of negligent farmers that won’t fence their waterways or deal with effluent properly?
     
  2. How will they show that water quality can be maintained or improved when more land is converting to dairy?
     
  3. In areas that have too many cows, how will farming be scaled back?

Without answers to these questions, their genuine and excellent progress will always smack a little of greenwashing – and that’s not the headlines the industry deserves or wants.

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Geoff Simmons is a senior economist at the Morgan Foundation. This article was first published on the blog garethsworld.com and is re-published here with permission.

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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you got the wrong man ref.
A. The 4 australian banks and the one european bank will on balance determine outcomes via terms of credit, their thinking being.
1 to preserve their existing investment
2 to determine the rate - speed and quality - of new credit/credit growth, or book reduction (af)
B. a supporting role will be provided by councils et la in making land use/emmissions approvals.
do not under estimate the influence to date of A on B.
 
for compare see here (its the same lending crew and credit deciders that we have):
http://data.daff.gov.au/data/warehouse/9aas/2014/adfpfd9aas20141216/AustDairyFinPerf_v.1.0.0.pdf
section 4, pages 12 to 17.
seems much less lender financed.
 

Geoff Simmons must have had too much Christmas Cheer when he wrote this load of bollocks. 
 
This has led to a predictable squeal from farmers, Really??  All the farmers I have spoken to started to reassess their costs over the last few months  expecting payout to drop.  Predictable squeal from the media more likely.
that it takes a year for a farmer to recover from a bad year, but it takes three years to come down from a good year  That adage dear Geoff must be an economists one.  Three years to come down from a good year? What on earth are you talking about??? 
 
 as new farmers look to escape crippling debt levels that they may not be able to service. Your proof that this statement is correct? In our area the farms sales that have gone through are existing mature farmers selling to buy bigger. 
 
The real question the dairy companies have to face is how they will deal with this hard rump of 6-7% of farmers that drag the chain on basic environmental issues. At the moment their threats not to pick up the milk from negligent farmers look like a load of hot air.  All the real power is in the hands of the Regional Councils.  Companies have to be very careful about refusing to pick up milk because cows need to be milked from an animal welfare perspective, so where does that milk go - in to the environment.  Be careful what you wish for.  
 
This problem is caused by cow pee, which is so intense it can't be picked up by the soil, it ends up draining into waterways And here's me thinking it was the plants that picked up some of the nitrogen.  We obviously had different science teachers. You then go on to say how bad depends on the local soil and weather conditions. It is either so intense it can't be picked up or it depends on the soil type and/or weather conditions.
 
 The only solution to this problem is keeping cows on a feed pad or inside, so their urine can be collected.   Says who?  Proof??
 
as yet there is no deadline for implementation. While riparian planting plans seems like a positive thing for the industry to do, it is not practical in all situations - especially on farms that can have waterways flooding in times of heavy rainfall.  In Southland these situations have resulted in riparian plantings being ripped out by floodwaters with the resultant sediment increases in the waterway.   
This is also at odds with the Environment Southland Fencing Guide for  ES Maintained Watercourses which state "Machine access side - Place fence on top edge of bank" So we have two sets of rules for one waterway.  One from the industry and a different one from the Regional Council.  'One size fits all regulation" in regards to waterways might give environmental lobbyists a happy face, but reality can mean that they are impractical to implement everywhere. 
 
The dairy companies are all trying to help their farmers understand their nitrogen situation.  And I thought it was the dairy farmers trying to help the dairy companies understand their nitrogen situation!  ;-)  
 
How will they deal with the hard rump of negligent farmers that won’t fence their waterways If you are a farmer in Westland who should you listen to - the Regional Council that says Westland have few water issues because of the volume of water in rivers and/or short runs to sea, or "the one brush fits all" dairy industry that says 'we have to appease the environmental lobby regardless of how impractical their wishes are?'
 
It is the Regional Councils who hold the real power for water quality, not the dairy industry.  I challenge Geoff Simmons, Gareth Morgan et al to take on the non dairy sector over water quality.  
In Southland ES scientists have proven:  Sheep and beef farms were the dominant source of nitrogen and phosphorus loads in most catchments. However, loads from dairy farms were disproportionately large, when compared with the amount of land they use. 
http://www.es.govt.nz/media/39171/mitigating_on-farm_losses.pdf
 

Here the dairy sales going through are also purchases from existing farmers.  Although Mr Manderson's farm is a sharemilker (who I think is going to have a hard time, it's colder than he's used to down there!)

It's the existing farmers that have the core investment to just keep plodding along.  Thus we end up with neighbour expansions being the most common.  Sadly such amalgamations are usually non-reversable, with small farmers turning into big farms which only big money can buy, and removing a lot of the entry level operations.  That was one reason I was hoping to continue to hold on to this place but...

Low payout, inability of Fonterra to demand a reverse price that accurately reflects actual cost of product (including rent),  and as you have mentioned the total interference that is waterway management makes it too risky to keep working for $20,000 a year (payout $5.70)

The urine patches is what has been said for the last 30 years in defence of artifically spread nitrogen.  same as the clover claims.   The usual spread rate for artifical method is 20-40kg N per hectare, with maximum of 180-200kg hectare per annum.   A single spot of urine is upwards of 1000kg per hectare.      However the difference is in total volume and migration of the chemicals.   Liquid urine, with a thin humus layer, tends to soak down futher than the lighter concentrations.   Applying artifical Urea has low soil penetration and migration but reduces the humus/micro-organisms (a bleaching effect at spread rates above 10kg Urea/ha)

With the farming I can hardly afford my wishlist of deferred matainenance without having to dance for free for the hidden masters of the political kind (over the toip environemntalists, MPI with idiotic and _illegal_ demands*)

* their proposaed refrigeratioon does NOT affect food quality or safety, and many other of their idiotic rules are also purely cosmetic - all ok IF and only IF the customer is willing to _pay_ for those features.  pure insanity for price cutting/commodity customers.

Actually, the Morgan Foundation has previously taken on the non dairy sector: 
http://garethsworld.com/blog/environment/fencing-waterways-dairy-farms-e...
http://garethsworld.com/blog/environment/new-zealand-heading-up-shit-cre...
You want me to do more research. How about you do yours? 
Despite your selected quotes from Southland, detract from the fact that currently the biggest issue in New Zealand is dairy conversions and the impact on water quality. Of course there are many different local issues, but this is a national website so national generalisations are quite reasonable. And if you don't believe the generalisation, take up your concerns with the panel of scientists we convened to publish this report:
http://garethsworld.com/myriver/governments-water-policy-revisited/
 
 

Actually national generalisations relating to water quality are not acceptable . This may be a national website but you will note that when an issue is written about on this site it usually refers to the geographical situation of the issue. e.g. Auckland Housing - no where do you see on this site that commentators, or writers state that it is a national problem. The problem is referred to where it occurs. Nationally water quality varies and what is true for one section of a waterway may not be true for another section of the same waterway.  Water quality is a community issue for those living in that community - not for sticky beaks in glass towers throwing stones from afar.
 
The problem with the likes of garethsworld website is that there are such broad generalisations that it becomes almost meaningless at times.  It comes across more as a personal crusade of the writer rather than a robust article.  Take this for example:
Finally, and most tragically, a small minority of farmers are still getting caught discharging effluent directly into our waterways.  
http://garethsworld.com/blog/environment/fencing-waterways-dairy-farms-e...
That is your personal opinion that it is tragic.  What about the Regional Councils such as Northland (and it isn't the only one) that allow discharges in to water ways based on river/stream flows?
 
Show me any sector of society that can say there is 100% compliance with all laws from it's members.  It is accepted by most NZers that there are small sections in the communities in which we live that won't be 100% law abiding 100% of the time.  But for some reason dairying is almost vilified in the media and by commentators such as yourself, expecting a perfect record by 100% of the dairy industry. No other sector in society has the media and lobbyist pressure on it like dairy does.  Ever wondered why farmers now have the highest suicide rate in NZ? - they have finally overtaken dentists which previously had the number one spot.   
 
As to your second link: Gareth Morgan states :That means almost 4m cows are still shitting in our rivers.  At the end of the 2011/12 year DairyNZ says that there were 4,634,266 dairy cows in NZ.  How the heck can Morgan state that all but 634,266 are still shitting in the rivers when he acknowledges that 95% of Fonterra farms, which make up the majority of dairy farms are fenced - is he imp[lying that 4million dairy cattle are shifted off dairy farms in winter?  It is this sort of generalist bulldust that gives Morgan and others on his website little credibility - despite how big his pockets are in paying for scientific reports.  Read Malcom's post to Morgans article.  Malcom is correct.  Riparian planting does very little if anything to help with nitrate leaching - it helps with phosate and to a degree, sediment. 
 
Not all waterways are nitrogen limited,  And yes I will go on about Southland, in particular Waituna Lagoon, because that is the community in which my business is located - half the catchment is phosphate limited and half the catchment is nitrogen limited.  So planting riparian strips may help the phosphate limited part of the catchment but will do jack sh.t for the nitrogen limited part.
 
You might have dairy farming connections Geoff but a dairy farmer you aren't, and you have only limited knowledge of water quality.  You proved the old saying "a little knowledge can be a dangerous thing'.  
 
Now a factual generalisation: Phosphate is more of a problem in more of the waterways than nitrogen - and dairy conversions make negligible difference to that.  
 
As to the scientists on gareth's panel - I know and work closely with some of them - science doesn't stand still and a report is only valid until the next lot of research comes out. ;-)
  

The time to fully address the dairy farm pollution issue was as product prices were rising.  This would have put a dint in the over exuberant prices that were paid for farms and farmers would have had the cash to address the problems.  Ie the cash could have been directed into addressing pollution rather than borrowing heaps of overseas funds to bid up farm prices.  This would have given both better ecconomic stability and a cleaner environment.  Now that we are servicing the over inflated capital values of dairy farms that do not reflect their true running cost (ie excludes the total environmental costs), it is going to be much harder to find the money fix the pollution.

You are right for big investments - effluent and fencing. But most (93%) of farmers have done this now. 
Low dairy prices encourage low input farming. Less palm kernel, less fertiliser, fewer cows, less urine, less nitrogen ending up in our rivers. So actually low prices might be a good thing for the environment too. 

Why do so many farmers burn their heaps of cleared scrub and other plant wastes, something that puts CO2 directly into the atmosphere?  Do they not understand how nitrogen drawdown works?  Waste biomass allied with strategically placed shrub/tree belts/plots, especially riparian ones, can be used to soak up excess soil nitrogen.  Furthermore increasing carbon levels in farmed soils is immensely prefarable to putting it into the atmosphere. 
 

get a case study and display that for us.

Remember it's a farm.  Labour costs. Equipment costs.
It's value is in the use of the acreage for harvesting, nothing else.

Areas that machines and crops and animals don't go, is very expensive and customers such as yourself don't want to pay extra for these retired areas (scrubs etc)

Most stubble isn't economically or energy/nutrient dense enough to process in other ways.  It does return potash and phosphates to the soil.  
It also reduces pathogens and weeds.  
In some places the contours are not conducive to other methods of removal (you can't plow in slow degrading long stalks into a hillside).

What is burnt off won't draw down nitrogen anyway.

The CO2 produced is quite low and easily processed by the replacement plants.

Personally I don't like the practice, but some places it's the only viable option....and as I have said many times - if you consumers really want prettier alternatives you're going have to have pay for them - which will lift your current prices by about 2.5 to 3 TIMES current shelf prices.
You get what you pay for.

Geoff Simons  I am but a poor barely literate dairy farmer.....

Please explain to my ignorant and ever so humble self; how anything but staying in the black (minimum profitability)  can be first priority.

Taxes, consents and rates need paying by law.
Paying staff is legally required.

The bank does kinda insist on getting it's interest at a minimum.

I notice my phone bill has just gone up too.  Need that to operate.  Same phone, same lines, same exchanges - makes you wonder why phone charges go up, yet milk is expected to go down....

I love the environment - thats one beauty of being on the farm, not having to live in that artifical concrete and asphalt jungle and duke it out with the other dogs and rats.  However I would love to know how it is physic-ally possible to put the environment (or food safety for that matter) beyond profitable return.   You are clearly a great expert in these matters given your article and comment.

- - -

AND OMG!!!! SINCE WHEN HAS __FONTERRA__ EVER **HELPED** _ANY_ SUPPLIER WITH ENVIRONMENTAL OR OPERATIONAL ASSISTANCE.   Threaten yes, help no.

Still waiting Mr Simons

Happy to answer your question when you have one that is relevant to the article. Did you actually read it? I never said anything in it that disagreed with your point - of course you need profit to to make any investment, including pro-environmental ones. 
My point was completely different - that low prices might see a return to low input, less intensive farming, which is good for rivers. 
Few dairy farms (6-7%) have not made the large investments needed on effluent and fencing rivers. I have little sympathy for these farmers - if they can't afford to make the investments they should be forced out of business. 

So you have little sympathy for small (and large) communities that use the 'can't afford' to upgrade sewage schemes/stormwater infrastructure card, and believe they should be forced to pack up and move??
 
 

"It all goes to prove that old adage – that it takes a year for a farmer to recover from a bad year, but it takes three years to come down from a good year."

That's not an old adage - that's bullshit.

A farm consists of large amount of deferred maintance and jerry rigged solutions.
On a good year, the deferred maintance is caught up; poor stock replaced, the PTO shaft that is threatening to kill people is replaced, the vehicles get full services and even replaced, motors and pumps that you don't touch while the power is on get looked at, and the circults that have the fuses wired over get replaced.  An exra feeder for the calves will be bought, bald tires replaced, machinery that has more than a dozen welds or Aussi-wired tied get an overhaul.
 In a good enough year, the effluent system and concrete spaces might get an overhaul, or in-shed feeding systems installed.

True, some over schooled farmers put in big feeding systems and pump up production by converting all their cash to expensive feed inputs.  But they make their own business failure,

Where farming, especially in NZ, is designed around bad years.  That's why everything is long hours, makeshift repairs, and hand-to-mouth bank repayments because bad years are the norm.  Drought, flood, pestilence or RBNZ cranking it up "just in case of inflation".
It doesn't appear to take long to recover from a bad year, because it's not much deviation from the norm...because of NZ society and processors giving consistantly poor returns, a single drop doesn't affect the inefficiency.

If real returns were available, then you'd see faster on farm development;  higher rates of reinvestment (which is risky, and spread over time), and reliance on decent income.   Because the income isn't available our NZ systems have never adapted for that (in spite of what the idiots at MPI think).

 

I agree with you cowboy in a good year you can all ways  spend all the extra money on the farm if you want to. Sometimes fencing off an area can be a win win for the business and the environment. For example fencing off a river and planting trees can provide stock shelter and shade, and flood protection. ( we fenced off a river and planted willows years before anyone ever talked about nitrates.) .Farmers are retiring areas of hill country for manuka honey.
But in other areas fenced off waterways can  create flooding. I'm not in favour of power crazed councils enforcing blanket rules. I think every thing should be worked out on a case by case basis. Prosecuting farmers is largely revenue collecting by money hungry councils who are taking advantage of emotive issues. This was the case recently when a local farmer was prosecuted for cleaning a stream on his farm. I've heard comments from non farmers in our area who agree the decision was "bullshit"

Got proof of your claims around Councils? I love how commentators call for the writer to provide more proof and then make rash generalisations themselves. 
I know some Council officers and I know some dairy farmers too. Both are generally hard working and have incredible integrity. 
Frankly to get prosecuted you have to be doing something pretty wrong. 

Frankly to get prosecuted you have to be doing something pretty wrong. Yep planting trees without the correct paperwork - and attendant fees paid.
http://www.stuff.co.nz/business/farming/64407456/treeplanting-farmer-bas...
 

Why do you think I'm angry about this. All the farmer I'm talking about was guilty of was not getting the proper permission. He cleaned a drain he has cleaned all his life. Do you want to do business with people who want to sue you? The only letter we've had in our area about the cleaning of drains is from a contractor who they tried to sue warning us to get permission from regional council first.!!!

The main reason returns are low is because land prices are so high. This is a factor of our taxation regime, so farmers have a strong incentive to invest heavily in capital so that they reduce their taxable income and maximise their non tax gains (tax writeoffs, capital gains, imputed returns etc). 
I have a dairy farming family background and have heard the saying myself. The idea is exactly what you say - in a bad year farmers defer maintenance etc. All the more reason to have a low input (grass) farming approach, which is NZ's competitive advantage. 
In a good year, farmers are more likely to increase inputs, overstock, invest in capital such as housing and feedpads to handle the overstocking and convert more and more marginal land to dairy. The cost of production then rises, leaving farmers more vulnerable to price falls. This all happens in a good year - hence, taking 3 years to get over it. :)

In a good year, farmers are more likely to increase inputs, overstock, invest in capital such as housing and feedpads to handle the overstocking and convert more and more marginal land to dairy.  What a generalisation!  What percentage of farmers invest in capital such as housing and feedpads to handle the overstocking.  You have that the wrong way around - they have to increase stocking rate to pay for the investment in housing and feedpads - not the other way around. Most farmers in our area invest in feedpads as a calving pad/winter environmental damage mitigation strategy.  

Its been said often enough CO.  I think they just dont want to listen.

I'm trying to shake off a non existant hangover. I must have a hangover - what else could explain my difficulty in following the author's reasoning.
In the short term the price drop is probably good news and should get better...
Housing cows .. may be more expensive but better for our rivers
most farmers can switch back to a low cost model (non housed) to weather lower prices
compliance figures not good enough - need to be 100% although low payout wont affect progress much????
And after slapping Dairy NZ and Federated Farmers for the author's interpretation of what they are advocating the author then finishs with -
thats not the headlines the industry deserves or wants.
Is he pro dairy farming or anti ? 

Why do I have to be pro or anti? I am all for dairy farming, when done sustainably. Fencing and planting rivers and collecting effluent is a must have, so is controlling nitrogen leaching. Industry is making good progress but is being hampered by some delinquents, which they need to deal to.
Not sure what you are asking in the rest of your comment but will endeavour to explain again. The low payout will hopefully push people to return to low input farming, which is good for rivers. If they want to continue with high input farming, they should consider housing cows, which is more expensive and risky given the low payout. 

Define 'high input'.
 
If they want to continue with high input farming, they should consider housing cows, Now who have you been talking to?  Obviously not the scientists on gareth's panel or you would know that from an environmental/water quality perspective housing cows in some catchments is not the way to go.
 
This is why to have a credible discussion on water quality you have to take it at catchment /river/regional level as there are so many variables, that results in what might be good for one is defininitely not good for another.  You can't generalise.

"High Input", CO, is 1.5 million people stacked into the greater Auckland area, being luxuriously fed and housed, and consequently creating as much waste as some small countries.
It would be of more use if the writer of this article attempted to solve the problems of humanity stacked up in cities, creating polluted beaches, undrinkable water and filthy environments laced with petroleum products burned from endless driving everywhere for entertainment, work and whatever.
What are cities doing with stormwater? How can Councils allow the run-off from roads to drain into water supplies? Where does the waste from a city end up? 
The most polluted areas of water are close to towns and cities, not out in the rural backblocks where farmers are making an honest living.

The problem with "low input" farming is those things you say you're for (sustainably, retired land use, and certified management and consents of retired land, ect) are all expensive.  And the low input is done because low cost structure (to cover the rent - as fully paid up free land and plant, means they can afford high input even on low raw milk prices).

It's like saying it's ok to expect Nike to make footwear for $25 a pair as long as they don't cut material quality or use sweatshop labour.

Quality - Cheap - Sustainable.   Old story, pick 2.

 

For a good quality web site this article drops the normal standards required 
Geoff should get out of his concrete jungle and see what people in the provinces are doing to mitigate the effects of producing food for the masses 

Agree, Westminster.  Urbanites have their fair share to shoulder here.  And to pay for.  A sampling....
 

 
The lazy meme of "let's blame Dairy for ever'thang" needs to be axed in the New Year:  Interest Editors take note....
 
 

That is a fair point. We have talked about it here - actually small towns are the biggest problem:
http://garethsworld.com/blog/environment/small-towns-need-stop-polluting...
But it is a matter of scale. There is no doubt that right now farming is by far the biggest issue for our fresh water. 
http://garethsworld.com/blog/environment/new-zealand-heading-up-shit-cre...

Geoff to me you appear like a duck sitting in Lake Rotorua, quacking on about how the farmers are the culprits as you divert all your poo down the Kaituna River.
The last bastions of clean water are in rural areas, and until the urban areas clean up their act, all we're hearing in the country is louder quacking.

The small towns aren't the problem, it's that they expected to magic up finances for Big Town solutions, and the rules change faster than nappies.

Get out of the office, like the time when we visited Dave Stewart to record the video in this blog? 
http://garethsworld.com/blog/environment/dairy-farmers-voluntarily-makin...
Also, my uncle and cousins are dairy farmers. I have stood in enough cow pats for a lifetime sunshine. 

I can read books on economics and talk to economists but that doesn't mean that I am qualified to comment on it.

A dairy farmer from N Canterbury told me last week that he is still profitable given a $4.70 cash payout (milk price is usually less than cash payout).
 
And he also told me that he considers himself an average D farmer.

Is he calculating a rental payment of 4% of capital assets?

Any fool can be cashflow positive on a 100% paid up, no rent system, especially if like many farmers they don't fully account for their and their families market value wages.  (80 - 120k for most farm managers - according to Child Support about my running of a 150 cows)