DairyNZ: Strong payouts offset high farm costs
The dairy sector is in a relatively stable position, with strong milk price payout forecasts continuing to offset ongoing high farm costs, according to DairyNZ.
It has told the Bay of Plenty Regional Council that while the cost of mitigating nitrogen leaching varies from farm to farm, the mitigation is likely to require major farm system changes and may mean some dairy farms are no longer viable in their current land use.
The council’s proposed Lake Rotorua Nutrient Management Plan Change 10 (PC10) is part of a long term solution for Lake Rotorua water quality developed under the Rotorua Te Arawa Lakes Programme.
To meet water quality standards set by the community, nitrogen entering the lake must reduce by 320 tonnes by 2032. Less than half of that -- 140 tonnes -- will come from proposed rules whereby landowners will need to change their land use.One hundred tonnes will come from voluntary land use changes purchased by the Lake Rotorua Incentives Board, 30 tonnes will come from voluntary gorse conversion to trees, and 50 tonnes will come from engineering initiatives.
But DairyNZ economist Carla Muller says it is possible that PC10 does not present the most cost-effective way to achieve the community’s desired water quality objectives. “PC10 requires dairy farmers to significantly reduce nitrogen leaching. However, there is no requirement to reduce phosphorus losses.”
Nitrogen and phosphorus losses originate in fundamentally different processes, and the council has prioritised nitrogen management much higher than phosphorus management.
Muller says the decision about which nutrient to prioritise markedly alters the choice of mitigation.
“It is most cost-effective to select mitigations based on which nutrient is prioritised. Over-regulating nitrogen leaching will not achieve the desired water quality objectives in the most efficient (cost-effective) way.”
The council received 92 submissions from various individuals and groups such as farmers, Māori land trusts and industry and 20 more submissions based on matters raised by initial submissions.
Council staff have now considered and responded to each point raised by these submissions and these are included in the section 42A report available on the Bay of Plenty Regional Council website, along with supporting evidence from council’s expert witnesses.
Council acting chief executive Fiona McTavish says the report highlights areas of Proposed Plan Change 10 where people are in agreement and topics or components of the plan change they do not agree on.
“The report is a requirement of the Resource Management Act 1991 which responds to each submission and includes recommended changes to the proposed rules,” McTavish says.
The independent hearing panel will consider the recommendations in the report in addition to any evidence presented by submitters when making their final decision.
Public hearings are being held at the Millennium Hotel in Rotorua from March 13 to April 4.
