Beefed up environmental regulations impacting - report
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Beefed up environmental regulations not just impacting the dairy sector - industry report

Increased environmental regulation will have a significant impact on New Zealand’s sheep and beef farmers as well as their dairy counterparts, according to new research by agricultural banking specialist Rabobank.

Releasing the report Environmental opportunities: Making regulation work for New Zealand’s sheep and beef farmers, Rabobank Country Banking general manager Hayley Moynihan said since the introduction of the National Policy Statement for Freshwater Management (NPSFM), much of the focus relating to regulation change had been on the impacts to the dairy sector, however sheep and beef farmers also face considerable challenges in achieving environmental compliance.

“The environmental risk profile of sheep and beef farming is different than dairy, but with sheep and beef farms representing 30 per cent of New Zealand’s total land area and 71 per cent of pastoral land use, the sector is still a considerable contributor to the total contaminant load that is entering New Zealand’s waterways,” she said.
“It is therefore crucial that farmers in this sector plan for, and adapt to, increased environmental regulation.”

The Rabobank report examines the specific environmental issues facing the sheep and beef sector and potential impacts regulatory change will have on farmers. The report investigates how to plan for, and implement, the available mitigation techniques within existing sheep and beef farm systems.

Contaminant loss via run-off key challenge

Reporter author, Rabobank rural manager Sustainable Farming Systems Blake Holgate says a farm’s impact on waterways is largely determined by the intensity of the farming system and the landscape in which the farming is undertaken.

“In terms of contaminant loss to waterways, pastoral land uses produce three main pollutant types, the nutrients nitrogen and phosphorous, sediment and faecal microbes,” he said.

“With intensive land uses like dairying, nitrogen loss due to leaching into ground water is the major issue. For the sheep and beef sector, which is primarily undertaken on sloping or elevated landscapes, contaminants which are transported to water via surface run off such as phosphorus, sediment and faecal microbes pose the major challenge.

“The rules imposed to regulate the loss of contaminants via run-off will have direct implications for sheep and beef farmers.”

Impacts for sheep and beef farmers

At a minimum, the report says, sheep and beef farmers should expect regional authorities will look closely at land management practices that can assist in reducing contaminant losses to waterways.

Regulators can choose whether these practices are directly mandated (e.g. all waterways must be fenced to exclude stock) or could require that a particular outcome be achieved, without prescribing exactly how that outcome is to be achieved (e.g. stock must not enter a waterway).

The different approaches are illustrated in the report by a comparison of the approaches that have been taken to regulate sediment and phosphorus run-off losses by the Otago Regional Council (a heavily effects based approach) versus those taken by the Hawke's Bay Regional Council (a more prescriptive approach).

“Regardless of whether councils take an effects-based approach or choose to apply prescriptive measures, it is important that they provide farmers with the flexibility to meet the rules/ limits in a way that is practical and cost efficient and allows a tailored solution for the specific farming operation,” Mr Holgate says.

The report also urges sheep and beef farmers to pay close attention to the regulation of nitrogen leaching within their region.

“As relatively low leachers of nitrogen, sheep and beef farmers will need to be cautious of any framework that caps nitrogen limits at, or below, their existing leaching levels, preventing them from intensifying their current operation, or converting to more intensive land uses.”

Mitigation techniques

Adjusting to limits and rules is likely to require widespread adoption of a range of ‘good management practice’ mitigation strategies, the Rabobank report says. These may include maintaining riparian buffer strips, targeted fertiliser application, careful cultivation and practices to reduce erosion risk. The report says the effectiveness and cost of these mitigation options can vary due to differences in soil type, climate, topography, land-use and farm management systems.

“The key principle is that, when developing a mitigation plan, farmers must identify and implement the most cost-effective strategies, before moving onto the more expensive or less cost-effective strategies,” Mr Holgate says.

“It is important that a whole of farm approach is taken and that each mitigation strategy is matched to the particular contaminant loss that is being mitigated, and to the physical resources and current farm system of the existing farm.”

Industry collaboration key

The report says the NPSFM needs to be implemented in a way that not only ensures communities expectations for fresh water quality are being met, but also in a way that does not threaten New Zealand’s sheep and beef sectors international competitive advantage by adding unnecessary costs and or farming system restrictions.

“Environmental sustainability and economic sustainability are inextricably linked, and in the long term neither can be achieved without the other. In order to improve both farm profitability and environmental performance, regulators, farmers and processors must work together,” it says.

“This means regulators ensuring regulation is fair, based on sound science and applied over appropriate timeframes, farmers accepting that regulation will require changes and adapting their operations accordingly and processors selling the story and getting the market to acknowledge the changes that are being made,” Mr Holgate says.

“Only if each of these groups effectively carries out their roles and responsibilities will the challenges posed by the NPSFM be met and the opportunities be realised.”

Rabobank New Zealand is a part of the international Rabobank Group, the world's leading specialist in food and agribusiness banking. Rabobank has more than 115 years' experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank is structured as a cooperative and operates in 40 countries, servicing the needs of approximately 8.8 million clients worldwide through a network of more than 1000 offices and branches. Rabobank New Zealand is one of New Zealand's leading rural lenders and a significant provider of business and corporate banking and financial services to country's food and agribusiness sector. The bank has 33 branches throughout New Zealand. Rabobank also operates RaboDirect, New Zealand’s first internet-only bank specialising in savings and deposits.

Media contacts:
Denise Shaw
Head of Media Relations
Rabobank Australia & New Zealand
Phone: +61 2 8115 2744 or +61 439 603 525

David Johnston
Marketing Manager
Rabobank New Zealand
Phone: + 04 819 2711 or 027 477 8153

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