I've been talking to a number of farmers up and down the country over these last few months and funnily enough Covid isn't the biggest thing on their mind. The same topic keeps coming up in conversation and I thought I would share my thoughts and findings.
A big issue that the Government is focusing on is New Zealand’s freshwater. They’re pushing a policy that would have farmers fence up their waterways and have their own individualised environmental plans (most of the big changes come into effect by 2025). Federated Farmers have put together a great timeline of when everything is happening.
This is meant to significantly improve New Zealand’s freshwater quality..
On the surface it sounds like a good idea. The problem? Some farmers have looked at the numbers and they think they’ll have to quit farming altogether if the policy is fully implemented. Most the people I'm talking to aren't opposed to the changes and farmers fundamentally want to leave environment better than they find it. The issue is the unrealistic timeline by which they expect us to have fully adhered to the new policy (especially when taking into account everything else going on at the moment).
Why is the Government making waterways such a big priority?
They say the run-off from farms is the problem. Since New Zealand uses so much land for farming, freshwater quality can be dependent on what farmers do. Lots of rivers, for example, used to be okay for swimming, but now they’re considered unsuitable for those activities.
That’s where this policy is meant to come in. Labour is attempting to make some big changes over a short period. One of the surveys I found suggested that 4 out of 5 New Zealanders think water quality is the #1 environmental challenge facing the country, making it a voting issue for the current government.
A worthwhile aim shouldn't mean irrational implementation.
I was talking to one of my customers on the phone the other day about this freshwater issue. He’s got a pretty big farm down south and he’s reviewed this policy in depth. It looks like he’ll have to fence up 10 kms of waterways, and he reckons it's going to cost him around a quarter of a million dollars. This level of spend highlights the importance of giving our farmers the time to not only plan the project but plan around the finances.
Often when we're planning out large yard builds, our customers come to us 12-18 months in advance to accomodate for both the expense and also the tax period. We assist with not only the project planning but also the financial planning for projects of this scale, so I can appreciate the challenge of replicating this level of planning at a far larger scale.
Overall, it’s estimated that this thing is going to cost 900 million for landowners and then another 140 million every year in compliance. The Government has put the estimated numbers at $5 per metre for diary, $14 per metre for sheep and beef, and $20 for deer.
People in the industry think they’ve severely underestimated the total costs.
That’s a huge amount of money. The whole situation is made worse when you think about the recent Brexit deal, with the mess with New Zealand’s export quotas. Then there’s how the markets are doing at the moment. The price of lamb is down about 10-15% from where it was at about a year ago.
If a farmer was already at razor thin margins, then how are they going to fork out all this money for environmental changes? By 2025, for example, every farm is going to need to have its own individualized environment plan, that costs $4000 per plan. Each plan will need to identify waterways and “schedule of actions to manage identified features and address identified risks.” A lot of farmers are unhappy with how vague a lot of the requirements are.
The banks are getting tough on farmers as well. They’re wanting farmers to have these amazing environmental plans in order to access favourable interest rates for refinancing. The problem is that a lot of farmers are dealing with not knowing most of what they need to know about the specifics of the policies. At the moment, about 23 percent of farmers feel ‘under pressure’ from their banks, which is up from 16% earlier in 2020. We already feel like we aren’t getting the support needed.
Now, to be fair, there are meant to be some benefits for farmers with this - if we look at benefits aside from the cleaner water itself. Building the waterways fencing is meant to increase the value of farms, and there are some proposed ideas for financial aid to help with the costs.
However, it doesn’t look like it’ll be enough.
Most farmers want to help preserve New Zealand’s natural environment – so they shouldn’t be treated as the enemy.
Agriculture is New Zealand’s largest industry and is the backbone of the country. This is even more true with the COVID-19 situation, as New Zealand’s international tourism industry was practically wiped out. The Government shouldn’t be so eager to put farmers into such a tough spot. It wouldn’t be good for anyone if our agriculture industry took a dive because of overly ambitious environmental policies. It’s already happening – many of you know how hard it is to convert a farm these days with all the red tape.
We need to be backing farmers up. The problem isn’t the goal of cleaning up New Zealand’s freshwater, it’s how the Government is going about it. If they want this done right, so that farmers prosper and the waters stay clean, then it needs to be done in a fair way.
I know this will be one to watch closely.
The goal of cleaner freshwater is a good goal to have, it just needs to be done well. The Government needs to work together with farmers on this and be realistic. There needs to be a holistic solution that works for everyone. I personally have found the content Farmers Weekly have been putting out around this to be top notch so I thought I would include a link to there here.
https://farmersweekly.co.nz/
Love to hear your thoughts on this.
