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Feds project highlights the costs of undertaking Healthy Rivers plan change

Feds project highlights the costs of undertaking Healthy Rivers plan change

Stuff.co.nz; 8 November 2016
A new study has highlighted the costs involved for farmers to meet their obligations under the Healthy Rivers plan change.

Federated Farmers have questioned the costs of cleaning up Waikato’s waterways after a new study showed the high price farmers will have to pay to meet their obligations under Healthy Rivers Plan for Change.

The Farm Plan Project saw 13 farms and 11 Fonterra farms go through the process of developing farm environment plans (FEPs).

FEPs are a key part of the proposed plan change and designed to identify current contaminant losses and where those contaminants can leave properties.

They also detail what action landowners will take to reduce those losses in a certain timeframe.

The plan was publicly notified on October 22. It seeks to improve water quality in the Waipa and Waikato rivers by managing nitrogen, phosphorus, sediment and bacteria entering waterways.

At the top end was a 240-hectare drystock farm that could have to pay $785,687, of which $479,138 was fencing costs to meet its environmental obligations.

The Waikato Regional Council disputed that cost, claiming it would fall between $306,549-$785,687, depending on how the FEP was interpreted.

Other farms used as case studies had costs ranging from $0-$500,000, with the bulk of the costs tied up in hill country fencing and water reticulation. The bulk of the costs from the Fonterra dairy farm case studies came from those farms upgrading its effluent management.

New Zealand First leader Winston Peters described the plan change as a disaster for Waikato and the New Zealand economy.

“What is proposed is like a farming nuclear bomb and the fallout takes out large swathes of dairy, drystock and horticulture. The worst affected farmers are in fact in sheep and beef – people and families already struggling with low returns and a rising inflated Kiwi dollar.”

Waikato Federated Farmers president Chris Lewis said the study showed that the costs were “massive”. All of the farmers who volunteered for the project wanted to improve water quality, but not when the costs would put them out of business.

“It’s unaffordable for some farmers and while they all acknowledge they have to do their fair share, they would like to be not put out of business.”

It also showed how a one-size-fits-all model was unsuitable for agriculture.

“This is not about farmers not doing anything, it’s about highlighting the costs about doing a lot of these things in some of these farms and can they afford to do that over 10 years?”

The average sheep and beef farmer has a farm profit before tax of $67,000 according to the Beef+Lamb New Zealand’s New Season Outlook. Some would be expected to pay hundreds of thousands of dollars in costs to meet their obligations under the plan change.

Lewis questioned where this money would come from. It highlighted how important it was for farmers to undertake their own FEP so they know exactly what costs they are looking at.

The study provided an opportunity to get the plan change re-written so it was flexible enough to ensure that intensive high polluting farmers had to change while not penalising low inputting drystock farmers.

The project was jointly funded by Waikato Regional Council, Federated Farmers Waikato, Fonterra, DairyNZ and the Foundation for Arable Research. It was undertaken by consultancy company AgFirst.

These farms were selected to represent a variety of land uses, farm types, catchments and geographic areas. The report only covered the FEP part of the plan change.

Waikato Regional Council chief executive Vaughan Payne said the project highlighted how the plan change was open to interpretation, which had caused the wide variety of farm costs. It was clear that a further refinement of how the plan change was interpreted was needed to help mitigate costs.

“This information is invaluable for the submission process. It will also assist with the council’s implementation planning, once the new rules become operative,” he said.

Payne said it highlighted the need to determine what mitigations were available to landowners to ensure they fully understood the options available to tailor FEPs.

The council has provided an extended period for submissions to allow people time to understand the proposed plan change and make informed submissions. Submissions close on March 8, 2017.

– Stuff