Cost of meeting freshwater standards could cripple farm business

Sheep & Beef Farmer - Daniel Mickleson

Cost of meeting freshwater standards could cripple farm business

Stuff-Esther Taunton, 6 Feb 2020
Fourth-generation sheep and beef farmer Daniel Mickleson says the cost of meeting proposed freshwater standards could mean the end of his family farm.

The Government is expected to make its final decisions on the details of a plan to clean up the country’s waterways early this year with the new rules coming into effect in June.

The plan includes several measures to improve farming practices, and ensure all farmers and growers have a plan to manage risks to freshwater.
However, Mickleson said taking a blanket approach to improving freshwater quality was wrong.

“I have absolutely no problem with them targeting the nitrification of groundwater in Canterbury and Southland, there’s definitely a genuine issue there,” he said.

“But they are responding with a blanket approach that doesn’t work for every region and farm type.”

Mickleson said bringing his 1200-hectare farm near Taihape into line with the proposals would come at a “very substantial” cost and could potentially cripple the business.

“I’m relying a lot on the Beef and Lamb analysis because it seems to be the only really in-depth analysis that’s been done and they’re talking in the order of up to four year’s gross income,” he said.

“You’d have to pay the running costs for your farm over those four years as well. Is [Environment Minister] David Parker going to go to Government and work for four years for free? I don’t think so.”

In a report commissioned by Beef and Lamb New Zealand, rural consultancy firm BakerAg put the total cost of meeting the proposed changes at between $2.4 million and $3.4m per farm over 10 years, significantly more than the Ministry for the Environment’s estimate of $148,500 over a decade.

​Mickleson said the difference in cost estimates showed the ministry had no understanding of the possible impacts of the proposals.

“It could absolutely cripple my farm business. I may as well pile up a million dollars in cash and set fire to it – same cost but significantly less work.”

According to the BakerAg report, the major costs would come from meeting proposed fencing rules, sediment control, and the loss of farm system and land use flexibility through “grand-parenting” which would restrict a farmer’s ability to change their farming system

However, Ministry for the Environment director of water, Martin Workman, said there were a number of areas where the BakerAg report had taken a different interpretation of the proposals.

“For instance, BakerAg interpreted that sheep were to be excluded from waterways which was not required in the proposals, and this interpretation substantially increased the estimated costs to beef and sheep farmers,” he said.

“The cost estimates also included considerably more than just stock exclusion. Some of these were not direct costs, such as significant loss of potential earnings from changing land use.”

Workman said the $148,500 figure provided in the Action for Healthy Waterways document was provided as an indication of how the proposals would impact a sheep and beef farmer using average figures, where available. BakerAg estimated costs from five case study farms.

Mickleson said his fencing bill alone could top half a million dollars – if he could to find someone to do the work.

“Agriculture has a critical labour shortage. There aren’t many fencers out there, and they don’t want to know about [fence] lines you can’t get a tractor over.

“When you do find someone, it costs $9 per metre for labour and as much again for materials,” he said.

“It’s seven kilometres to the back of the farm and there are two creeks running the length of it so there’s 28km right there, plus all the smaller tributaries. It’s just horrific.”

With neither of the streams currently fenced, the job would cost at least $504,000, he said.

There were also practical issues to consider, including the fencing of almost every gully floor on the hill country property.

“I’d have to reconfigure my whole farm. Many [fence] lines would have to be bulldozed, and that along with the earthworks required to put in all the crossings I would need is more environmental damage than this farm will cause in all of eternity,” Mickleson said.

“Then once it’s done, you’ve got miles and miles of expensive new fences at the bottom of hills, the most vulnerable fences, prone to both flooding and erosion.

“Maintenance is impossible from both a labour and a cost point of view.”

Mickleson says the Government’s blanket approach to cleaning up the country’s waterways is wrong.

Parker said the proposal had some flexibility around fencing, including that existing non-compliant fences could stay until 2025 and those with a minimum two-metre average would not be affected until 2035.

“The proposal is also explicit that landowners may seek an exemption from the requirements or an extension of time,” he said.

“I would also point out that the stock exclusion proposals do not apply to rivers less than one metre wide.”

Workman said the ministry was conducting “additional impact testing” on the proposals and that would include revised estimates of the length of streams that require fencing, area of setbacks, and the associated costs.

It would also provide quantitative estimates of E. coli and sediment load reductions resulting from the proposals.

Environment Minister David Parker says farmers will have time to phase-in their responses to proposed changes.
Environment Minister David Parker says farmers will have time to phase-in their responses to proposed changes.
Nationally, sheep and beef farms cover 8.5 million hectares and much of that land was criss-crossed by streams, Mickleson said.

“Unless David Parker tries to re-fence it all himself, it literally cannot be done – and I’ve seen David try to use a spade.

“It’s unworkable and unenforceable and I don’t know how they can do it.”

Parker said while he was “pretty handy with a spade and not a bad builder either”, farmers would have time to phase-in their responses.

While some proposed steps in the Action for Healthy Waterways package would apply quickly to meet the Government’s promise not to allow waterways to degrade further, others, like the national policy statement, would take until 2025 to roll out and work prospectively from then over a generation.

Workman said the Government expected to make decisions on the final shape of the new freshwater regulations in the first half of the year, with regulations expected to be in force by mid-year.

Decisions on when changes would impact land owners were still to be confirmed and the final shape of policy changes, timings and costs involved, including whether there may be funding for on-farm changes, were not yet available.