By Mike Joy*
For at least a century farming has been perceived as the backbone of the New Zealand economy, but in the last two decades the reality behind the perception has undergone an immense change.
The unregulated boom in dairy production has seen intensification and industrialisation to the extent that dairy farming can no longer be seen as even remotely sustainable, environmentally or economically.
Everything that we measure around the state of the environment associated with dairy farming is in decline and the deterioration is accelerating.
You could only consider dairy farming the backbone only if you choose, as many do, to ignore the multitude economic and environmental costs.
No longer is dairy farming a natural process where sunlight and rain are combined to grow pasture to be grazed by cows to make milk.
Rather, it is an industrial process much more like a factory where trucks bring in through the farm gate raw materials like palm kernel from Indonesia, phosphorous mined in Morocco and nitrogen derived from fossil gas at Kapuni. A small proportion of this nutrient goes out the farm gate in milk tankers and the rest leaves the farm through the soil and into waterways to pollute lakes, rivers and soils.
Down on the farm, there has been drive to increase land value by adding more cows through many more external inputs like palm kernel, and fertiliser.
It has worked, land values have increased hugely but only because there is no cost on the environmental impacts.
In effect though, the farmers earn less while stressing the land, the animals, and the people more and more.
It is done in the belief that it will be worth it all in the end when the farm is sold.
Of course this form of property speculation depends on a few key issues like milk prices continuing to rise, and that there is no limit on how much intensification the land can absorb.
In the absence of any control on intensity or impacts inevitably this process drives environmental impacts past societal values. Thus, while the economic value of the land has risen because of this artificially driven production gain, the intrinsic value of the land has diminished as the soil has become compacted and contaminated with heavy metals, and the waterways and lakes polluted.
A further downside of intensification is that land values have escalated so much that now on-farm debt on dairy farms exceeds 30 billion dollars. This is a lose-lose situation for New Zealand because environmental impacts go up exponentially with the increased production, but then much of the increased revenue immediately leaves the country as interest on escalating land prices.
Unfortunately, mainly through a lack of any central government leadership, our dairy industry is based on a very low value end product (milk powder) so the industry is constrained to low-cost production for this low value product.
The absence of any polluter-pays legislation has meant that increasing farm income was achieved by increasing intensification rather than by the more sustainable approach of adding value to the product. Who wouldn’t exploit this situation if you can make more money by adding cows and the impacts are not charged for?
Thus, the market in the absence of polluter-pays legislation encouraged increased environmental damage.
So dairy farmers are now trapped on a treadmill, forced to apply more and more external food and fertiliser to keep producing more milk required by banks to pay interest.
In general the response to this dilemma from the industry - mainly Fonterra, Federated Farmers and the fertiliser companies - has been one of smokescreens and denial. One blatant example, among many, was the industry funded New Zealand Institute of Economic Research report on the value of dairy to the New Zealand economy which unashamedly reported profits but omitted all associated costs.
These external costs of the dairy industry are borne by the rest of New Zealand in the form of polluted rivers, lakes and soils and through the subsidising of most of the cost of agriculture’s greenhouse gas emissions. Essentially this subsidising of one sector of the farming industry by the rest of New Zealand distorts the pricing and competitiveness, and increases the environmental impacts of farming.
An enquiry into the true cost of dairy farming in New Zealand is long overdue, any honest analysis would show that the costs far outweigh the gains and that we are destroying our future by continuing with this senseless dairy boom.
The best and only solution for the future of New Zealand environmentally and thus economically is to end subsidies to dairy farming by having a charge on pollution; this will drive the industry to add value to products, or diversify lessening impacts and allowing for more sustainable farming types to reclaim the landscape.
The inconvenient reality is that our clean-green credentials are in freefall and the farming sector is shooting itself in the foot by fighting against environmental protection.
Ultimately it’s not just tourism but also all primary production that relies on our clean green image, without it we are all in trouble so it is past time to take a good hard look at the real value of intensive dairy.
Dr. Mike Joy is a Senior Lecturer in Ecology and Environmental Science at the Ecology group in the Institute of Natural Resources Massey University Palmerston North. He researches and teaches freshwater ecology, especially freshwater fish ecology and distribution, ecological modelling bioassessment and environmental science. He is an outspoken advocate for environmental protection in New Zealand and has received a number of awards including “ecologist of the year” from the NZ ecological Society, and an “Old Blue” award from the Royal Forest and Bird Protection Society. You can contact him here »