Freshwater Reform: In Too Deep?

The Government has released a proposal for freshwater reform and there is a lot to like about it. Further intensification of farming will be stopped, wetlands protected and some risky farming practices regulated. Crucially, buried deep within the consultation document is the proposal that nitrogen limits would be lowered, which would make a big difference to the way we farm and the health of our rivers. However, there are some big exceptions, and these new standards raise a massive question about how to achieve and enforce them. And on those critical issues, the Government has kicked the can down the road – at least until after the next election. 

Exceptions

First off, all the hydro schemes have been given exemptions to the bottom lines. This is huge as some of our country’s biggest rivers and lakes are part of hydro schemes. The Government have also left room for transitional exemptions, which no doubt many Regional Councils will be lobbying to be part of. 

Nitrogen

The big proposed change is to the limits for nitrogen. This may sound technical, but it would make a massive difference to freshwater quality. In short, it would put a lid on intensive dairy farming around the country and up-end the industry in Canterbury. 

Here’s a quick refresher. Nitrogen mainly comes from cow urine. If the soil can’t use all the nitrogen it receives, it leaches into groundwater and eventually into rivers and lakes. Under certain conditions, nitrogen can encourage algae growth and lead to toxic blooms. Higher levels of nitrogen in water can cause problems for wildlife and even drinking water. We already knew that high levels of nitrogen can cause “blue baby” syndrome but, more recently, potential links between nitrogen levels in drinking water and colon cancer have also emerged. 

The previous limit for nitrogen was set at the level that directly causes problems for wildlife and drinking water – almost 7mg per litre of water. The new limit would be 7 times lower, at the level that can contribute to toxic algal blooms (1mg per litre, with an allowance to double on occasion).  

Many rural and urban areas alike will struggle to meet this lowered threshold. In Wellington alone, the Kaiwharawhara and Karori streams would fail the new test, which would no doubt come as a wake-up call for city slickers. But the main concerns would be in rural areas, because the driver behind nitrogen levels is also our second biggest export industry: dairying. 

There’s Most of the Country… and Then There’s Canterbury

As I’ve discussed many times, dairy farming is suitable for large parts of the country. Farmers in most should be able to meet the new limit by reducing the intensity of their operations, often without reducing profit. It is often possible for fewer, better-fed cows to produce a similar amount of milk. This shift would also reduce the need for fertiliser, irrigation, and imported feed – all of which would reduce farm costs. Most importantly for the environment, fewer cows mean less urine, which means better water quality. In these places the Government’s plan to halt intensification and encourage good practice should be enough. 

In some parts of the country such as Canterbury, however, this solution will sadly not be enough. Many of Canterbury’s rivers already register above 5 mg per litre of nitrogen in water and climbing. And more nitrogen is already moving through the system so, no matter what happens, those numbers will continue to rise for a while yet. Some locals are rightly wondering whether they can safely drink out of their wells. 

Based on the latest plan from Environment Canterbury, some farmers whose farms run into the Christchurch water supply will be expected to reduce their leaching by 15% (above the level of so-called “good management practice”) by 2030. That threshold will increase steadily to 90% by 2080. Some farmers are already wondering if it is worth continuing to farm. And yet, based on the Government’s new proposed limits, even this massive reduction won’t be enough. 

Who Pays? 

In order to meet the new thresholds, Canterbury farmers face a choice. They would have to either drastically reduce dairy cattle numbers or build thousands of cattle barns and feed pads to keep cows off the soil in winter. 

The cost of the first option depends on what else they can do with the land – whether they can find profitable alternative crops with lower levels of leaching. Big players like Pamu (Landcorp) and Ngai Tahu are already working on this stuff. We will see some experimentation in coming years, but it will take time to find proven alternatives and build the required infrastructure. 

The second option - building barns - comes with an estimated price tag of $2 billion in Canterbury alone. This is a lot more than the $229m set aside in the budget to improve water quality and even then we don’t know if barns would be enough to meet the much higher water quality standards. The Government must be wishing it had kept the Provincial Growth Fund money aside for a rainy day. 

Farmers will no doubt be given time to adjust, which will ease the blow. But in the meantime, the big question remains: who pays? Do we leave it to farmers and watch the heavily indebted ones (which could be 20% of Canterbury) go under and land prices plummet? Or should the taxpayer prop them up and help fund the transition? This question is likely to be massive at the next election. 

At TOP we don’t blame farmers for this situation - they were simply acting within the rules. The fact is that this problem was known about 15 years ago, under the last Labour Government. Governments of both colours have failed to act, and now we are in a real pickle. Without a clear answer, some Regional Councils may simply refuse to comply, which raises the question of how the Government plans to enforce their plan. 

The Māori Question

Regardless of whether the polluter or the taxpayer pays, the best way to manage this transition is by setting up a system of tradable rights for fresh water and nitrogen. The main purpose of establishing markets for those rights is to provide incentives for farmers who want to reduce water use and nitrogen leaching. In other words if they use less water or leach less, their profit goes up. 

The big problem is that any such rational system brings up the issue of Māori rights over freshwater. This needs to be resolved – but of course career politicians will do all they can to avoid it. As usual only TOP is proposing dealing with this issue head on. 

Image Credit: Brian Robinson