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Final Feedback on the Draft Nutrient Rules – 30 October 2014

Final Feedback on the Draft Nutrient Rules – 30 October 2014

Lake Rotorua Primary Producers Collective  – Feedback on the Draft Nutrient Rules

ToThe Chief Executive Officer
Bay of Plenty Regional Council
Reference:Lake Rotorua Proposed Rules for Nutrient Management
Submitted by:Lake Rotorua Primary Producers Collective
Contacts:Mr Stuart Morrison (Chairman)
Oturoa Road
RD 2 Rotorua 3072
Phone 07 3323500
Email sghmorr@farmside.co.nz
Mr Neil Heather (Deputy Chairman)
945 Paradise Valley Road
RD 2 Rotorua 2072
Phone 07 3572142
Email neil-heather@xtra.co.nz
Mrs Chris Paterson (Secretary)
136 Stewart Road
RD 6 Rotorua 3096
Phone 07 3322818
Email chrisjam@xtra.co.nz
Date31 October 2014

_______________________________________________________________________________________

1.  The Collective – Our Purpose

The Lake Rotorua Primary Producers Collective (the “Collective”) was formed in 2011 to advance the interests of rural landowners facing major reductions in nutrient losses from their farms. We have 46 members as at September 2014: 27 dairy farmers, 14 dry stock farmers and 5 rural professional associated members.

The Collective has had a key role in influencing and contributing to nutrient policy and research over the past three years, including:

  • Initiating the Sustainable Farming Fund Project “Meeting nutrient loss targets on dairy farms” with $450,000 from MPI, BOPRC, Ballance and DairyNZ (recent report).
  • Persuading BOPRC to adopt a collaborative path through the Stakeholder Advisory Group.
  • Signing the Oturoa Agreement with BOPRC, Federated Farmers and LWQS to extend the Regional Policy Statement nitrogen reduction deadline from 2022 to 2032.
  • Assisting BOPRC to develop the proposed Rules framework which reduced mandatory farmer nitrogen reductions from 270 to 140 tonnes, whilst the proposed incentives fund became responsible for 100 tonnes and a gorse project for 30 tonnes.
  • Successfully lobbying Government, in support of BOPRC, to get a Crown commitment to its share of 50% of the $45.5 million incentive and advice funding.

We work with BOPRC, Federated Farmers, DairyNZ, Beef+LambNZ and others to protect farm businesses while reducing nutrient losses that affect Lake Rotorua’s water quality.

2.  The Collective’s Involvement in Draft Rules Consultation

Over the past three months the Collective has actively engaged with the Rotorua rural community to both inform and collect feedback from pastoral land owners that will be affected by BOPRC’s draft rules to reduce nitrogen losses from Rotorua farms. This has included:

  • Two joint BOPRC-Collective meetings in July for the dairy and dry stock sectors
  • Launching the Collective’s website www.rotoruafarmers.org.nz and associated e-newsletter sent in September and October (later edition sent to over 260 recipients), all with a strong emphasis on encouraging draft rules feedback
  • Three community meetings with a combined attendance of over 300 people.

3.  The Collective’s Position

3.1  General Comments

We are anxious to find the right environmental solutions for both water and community.  This means the solution must be fair & equitable. It must minimise the economic costs to farmers and the wider community and be based on robust science. However, neither the economic impacts of the draft rules nor the science are well understood.

It is disappointing that the economic analysis underway now (as part of the Section 32 work) will not be available until well after the 31 October feedback deadline. The only recent economic review of ‘Rules’ impact, only included two real farm situations for each sector. The individual impacts are highly variable but appear to have a catastrophic effect on some businesses especially when debt and tax are added to the equation, which has not been done in any studies to date.

It is really important that the principles of  fairness & equity, doing the least harm possible, taking account of existing land use and capital investment are taken into account and are applied when considering the impact of the rules and the flow-on effects to the wider community from the inevitable reduced farm production, spending and land values. There are still unanswered science questions that need to be addressed.

The Lake Rotorua TLI has been improving for a number of years, even before  alum dosing commenced in 2007. Most importantly, the target TLI of 4.2 has been met for the past three years, significantly due to the alum dosing program which has made the lake phosphorus limited.

Nitrogen is not causing any environmental impact on the water quality of Lake Rotorua currently.  The lake has for the 3rd year running met the target TLI of 4.2 and prior to that it has been stable or reducing since 2002.  A lake that has been stable for 12 years is significant and should inform policy.  It also means that the law makers can take sufficient time to make absolutely sure the path they are travelling on is the right one as this policy will not be easily altered once it is enshrined in law.

Is this policy still relevant given the changes seen in the lake and does it achieve the goal?

Is the time frame that has been set to create better water quality fair to current land owners given the current water issues were created historically?

Is the science and not computer modelling proving the level and combinations of Nitrogen and phosphorus to be removed from the lake are correct. Could there be a possibility that slightly higher nitrogen levels coupled with lower phosphorus levels would still give better water quality while allowing a much more sustainable and prosperous farming industry?

3.2  Resource Consents

We have real reservations that detailed consent conditions will reduce innovation and drive behaviour not conducive to sound environmental practices.

Collective members have contributed to a current study by Perrin Ag to demonstrate the total gain to the catchment by way of voluntary contributions without resource consents i.e. doing better than the Rule 11 requirement through understanding and education. This study was presented to StAG at their October 2014 meeting. The results show an impressive trend and demonstrate that farmers are taking the nutrient reduction debate seriously even without resource consents in place.

Outcomes sought:

a)  That Council delay a definitive decision on Resource Consents until there is comprehensive understanding of the unintended consequences of the proposed Resource Consents and the impacts on the Rotorua community.

b)  That resource consents focus on the specific goal of the 2032 NDA for the property.

3.3  Resource Consent Length

In order for farmers to invest in mitigation, as much certainty as possible is required. No evidence has been presented which would justify giving farmers anything but the maximum period specified in the Resource Management Act of 35 years.

Outcome Sought:

a) That BOPRC issue 35year resource consents.

3.4  Compliance & Overseer

Overseer is a computer modelling tool which was designed to support on farm decision making around good nutrient management.

The use of Overseer as the regulatory tool and stepped nutrient reductions by way of consents will encourage land owners to “farm to Overseer” rather than look for enabling solutions specific to their holding that will improve the outcome for the lake.

Some of the solutions that will benefit the lake are not captured in Overseer.  Some of the solutions are also not N based.  Our concern is that these solutions result in better farm management and lowered nutrient loss but under the current proposed framework land owners will get no quantification or nutrient credit for these solutions even though the lake is gaining the benefit.

We need more farmers trained in the use of Overseer, especially testing “what if?” mitigation scenarios. If we understand the process it will be reflected in on farm practices.

We need more Overseer input data calibrated to local conditions not uniform nationally accepted data. We need all best practice mitigation options included in Overseer.

There are serious potential pitfalls when using Overseer for compliance purposes. It is an averaging tool that is constantly being changed/updated and has an error margin of +/- 30%.

Overseer assumes that on farm management practices are already at best practice. This means that any changes a farmer makes to bring his farm to best practice will not reduce his N leaching in Overseer particularly in the initial years.

It is important that compliance procedures allow for a degree of flexibility. It would be wrong for compliance to assume a higher degree of accuracy than the error margin within the Overseer program.

The same principles should be applied in terms of time frames. Overseer is a long-term averaging model, it is not designed to calculate nutrient flows on either a daily or even annual basis.  The Collective requests that rolling averages of 5 years should be applied to all data

It has always been our stand that the time frame for nitrogen reduction needs to be a 20 year process to allow for science to catch up and provide the necessary mitigation knowledge for the targets to be achieved.  There should be no enforcement of individual requirements before that 20 year period is up.

Each dollar spent on consents, compliance and administration take us further from the goal of a clean lake and a sustainable community. It is essential that compliance costs are kept as low as possible and able to be met by both farmer and the urban wage workers.

Outcomes Sought:

a)  That there is flexibility comparable to the error rate of the assessment tool allowed when assessing a farm nutrient report.

b)  That a rolling average of 5 years be applied to all input figures for compliance

c)   That farm management plans are not part of the Resource Consent to allow for ongoing adaptive and or inventive management not yet known.

d)   That there is no enforcement of individual requirements until 2032.

e)   That Council agree they will not micro manage private individuals businesses.

f)   That Council design a compliance system at absolute minimum cost to the land owner.

g)  That Council ensure ongoing training opportunities in the use of Overseer by farmers is available

h) That Council ensure that all identified mitigation options are calibrated for local conditions and included in the Overseer model.

3.5  Farm Management Plans

Farm Management Plans (FNP) should be a tool to help a farmer reach their NDA.  FNP’s should not be a part of the consent itself nor the compliance regime. Farmers should have the ability to alter and adapt their management decisions without having to vary their consent.

Agricultural science research is continually coming up with new advice. Our professional industry bodies are continually changing their advice and message to us. Our international markets are constantly improving the standards they require. Compliance for both District and Regional Council’s change.  A farm management plan will have to be a living document that is visited regularly with our advisors. It cannot be a piece of paper that is written today and filed for the next 20 years so incorporating it with the consent does not make sense. Neither will a farmer want to show and explain this plan to council staff on a regular basis. Council cannot expect to micro manage private business.

All that BOPRC should require for assessment of the NDA is the Overseer nutrient budget many farmers complete with their preferred fertiliser company.

Farmers do not want a replication of the inefficiency in the Lake Taupo catchment compliance regime paper war.

 Outcome Sought:

a) That farm management plans are not part of the Resource Consent to allow for ongoing adaptive and or inventive management not yet known.

3.6  Allocation

Agreed principals, values and good analysis must drive the final allocation approach.

All the allocation methods offered require significant change to farm systems across all sectors. Given current industry knowledge on methods of farming & mitigation we have grave concerns about the extreme effects on the livelihoods of a significant proportion of the community.

To date investigation of all allocation options has resulted in StAG and staff recommending sector averaging as the most appropriate option for this lake catchment. The Collective endorse this allocation method.

A hybrid option has also been suggested for consideration.  i.e. use a single sector average for dairy and a range derived from Rule 11 benchmarks for dry stock farms. This option should be fully analysed and included alongside the other options.

The Collective is adamant that BOPRC establish the Rule 11 bench mark years of 2001-2004 as the start of the required nutrient reduction period and for determining the effective land use.  Many land owners have been actively implementing changes in farming practices to reduce their nutrient export which forms part of their farm nitrogen reduction to meet their NDA.  The lake has benefited from this combined proactive management which has been demonstrated by a continued TLI of 4.2.

Rule 11 established the start point of the lakes nutrient program and the resultant bench mark allocated to each property also established the starting point from which farmers would address the nutrient export potential from their land.

Council must confirm the 2001- 2004 Rule 11 bench mark as the starting point so that all the changes farmers have already made to on farm practices will be credited to the farm.  The lake has proven to be the winner from farmers taking the initiative and being proactive in changing their on farm practices.

The Collective requests acknowledgement of the environment work completed on pastoral land before the benchmark years of 2001-2004. There have been many streams & ‘at risk’ areas of land retired, fenced and planted in natives at farmers own cost.  There has also been land retired for ecological reasons from which there will never be an income stream, unlike land planted in production forestry which will ultimately be harvested.  Under the proposed Rules these land owners will be heavily penalised while land owners who have no retired areas benefit from a higher Nitrogen Discharge Allowance.

Outcomes Sought:

a)  That Council establish the Rule 11 2001-2004 farm Bench mark as the start point for nutrient reduction and for the establishment of effective land use.

b)  That Council investigate the economic and environmental impact of the allocation options and report back to land owners before the Rules are established.

c)  Give pre 2001-2004 environmental retirement of land an allocation slightly higher than that of production forestry in acknowledgement of permanent retirement of the land.

3.7  Economic Analysis

Many land owners view the entire Rules process as fundamentally flawed, as the target for the sustainable load of nitrogen in the Regional Policy Statement was done without the majority of the community having a clear understanding of what the likely economic and social impacts will be for the district.  It has been constantly stated by BOPRC that the ‘community wants’ a lake with water quality of a 1960’s standard. The Collective request BOPRC to ask all communities that make up the greater Rotorua lake catchment if they are prepared to pay the financial and social price that the detailed economic analysis is expected to show, based on implementing the rules as drafted.

It is understood that there is now a Section 32 analysis under way, but farmers view this as far too late in the process.  We also understand that the Section 32 will only give a summary of the process of seeking a solution to the identified problem. We are also concerned that documents and papers included in this study are many years old (20) and not relevant to the current environment we live in.  We are concerned that the social and cultural effects of the proposed rules have not yet been investigated in any way let alone advised to the community that will be the most affected.

There must be a detailed analysis of the impacts of the draft Rules on all businesses, both rural and urban. All social implications should be assessed e.g. how will the Rules affect St Johns, the hospital, the junior sports associations etc.

There is anger over recent property valuations some of which have reduced capital worth by 50%. The impact is not just on rural land even urban property values have been lowered.  What has caused such huge financial loss across this community?

The community want to know what potential impact lower property valuations and lower productive ability will have them. Who will want to come and live in Rotorua if you can’t on-sell your land?  How many land holdings and businesses are at risk of being liquidated?  What is the projected reduction in weekly cash flow through the city given that it is well documented that every dollar spent circulates four times through the wider business sector? The Farmer Solutions Project report estimates the cost to pastoral farmers of the new rules to be over $88million not taking account of loss of capital and not factoring in debt and interest. This fact cannot be ignored in a community that already has zero growth.

The Community also wants full disclosure of the analysis of all the other options outside of the Rules framework that have been explored that will enable a reduction in nutrients to the lake.

Outcomes Sought:

a) That Council delay the implementation of the Rules program until the financial & social impacts identified in the full Section 32 report are interpreted & reported back to the Rotorua

b)  The Collective request BOPRC to go back to the communities that make up the greater Rotorua lake catchment and ask if they are prepared to pay the financial and social price as shown by the section 32 report to look out on a clean lake.

3.8  Scientific Analysis

At Dr. David Hamilton’s presentation on lake science at Ngongotaha (December 2013), evidence was presented that the lake was Phosphorus limited.  The cost of maintaining alum dosing is low compared to the cost of nitrogen reductions and should at least be considered as an option, especially in the medium term, before it is ruled out.  No analysis has been presented on more adaptive approaches.

The Collective is concerned that the public are being led to believe the option of continued Alum dosing beyond 2019 is not available, when there is no current science either in NZ or internationally that shows any ill effects from continued dosing.  The Collective requests that significant resources are invested in research to determine the true effect of this process matched under local conditions before any decisions are made.

The lake science presentation also presented different combinations of phosphorus and nitrogen loads which could achieve the desired TLI outcome.  The Collective asks that the different nitrogen and phosphorus targets be subject to a full economic analysis to enable a full assessment of the cost effectiveness and risks associated with each approach.

It is difficult to give feedback on the draft rules with no indication of what the district impacts are likely to be.  It is still unclear how the economic impact of this process will be conveyed to the wider community but the community is very clear that they want to know exactly how these Rules will affect their community in both the short term and longer term.  They are also adamant that they have a right of reply to policy when the ‘effects’ are known.

Outcomes Sought:

a)  The Collective wants BOPRC to maintain momentum around the advice, incentive, gorse and engineering programmes while farmers pursue affordable on-farm mitigation of both nitrogen and phosphorus losses.

b)  The community asks that the different nitrogen and phosphorus targets be subject to a full economic analysis, to allow for a full assessment of the cost effectiveness and risks associated with each approach.

(c) That Council advise the community of all the other options that are known of outside of the Rules framework, that could enable a reduction in nutrients to the lake.

d) The Collective request that significant resources are invested in research to determine the true effect of the Alum dosing program.

3.9  Ground Water

There are also still significant concerns about the gaps in the understanding of how groundwater behaves.  BOPRC needs to clearly communicate what the science gaps are and what the strategy is for addressing them.  It has been admitted by BOPRC that there is no current science data on the nutrient loading of ground water reserves under pastoral catchment farms. The only sampling done is when this water arrives at the surface of springs flowing to streams and the lake. Science has shown that there is an average time delay of 50 years in the ground water reaching the lake so the surface sampling and testing is of water that reflects 1960s farming practices.

There is no scientific analysis of nutrients in ground water from current farming practices.

It seems pointless to proceed with the improved farm management practices without checking to see if they are achieving reduced nutrients to the ground water. None of us will be here in 50years to check if what we did was effective!

BOPRC needs to engage better with the land owners that have only recently been captured within the Lake Rotorua ground water catchment.  They must supply the GNS evidence as to the flow of their ground water. There has been little communication from Council with most of information to the land owners coming from our public meetings.

Outcome Sought:

a)  The Collective request that before any further progress is made in notifying or implementing any ‘Rules package’ that a ground water testing program is initiated to determine the effect of current farming practices on the ground water reserves and that Council inform the land owners of the results.

3.10  Trading and Incentive Fund

No information has been provided on the likely market value of nitrogen.  What is ultimately paid to farmers needs to reflect reality rather than budget constraints.

Farmers generally support the provision for nutrient trading and the possible extra flexibility this could provide. In addition to trading of “in perpetuity” allowances, farmers would like to see provision for NDA

Leasing

Farmers do not want to see market distortions such as a moratorium on trading while the incentive fund operates.  Such a moratorium is potentially counter-productive as it will add uncertainty to farmers’ understanding of the market value of nitrogen.  There is a strong possibility that farmers will choose to not engage with the incentives fund if the price is not perceived as fair.

Farmers are adamant that BOPRC should carry the risk of the 100 tonnes associated with the incentives fund.  Talk of changing the rules if the Council fails to capture the 100tonnes does not engender trust and does not reflect the spirit of partnership in the Oturoa Agreement.  Long term consents, backed by assurance that these will not be interfered with is critical.  This will provide the certainty farmers need to invest and modify their businesses to stay viable within the new constraints.

The right incentive program would create better solutions, including: Retiring & planting land, creating retention dams to capture nutrients, direct drilling instead of cultivation, stand-off pads that do not export leachate.

4.  Final Comments

The Lake Rotorua Primary Producers Collective wishes to continue to be part of StAG, be consulted with and be part of the formal submission process.

Thank you for the opportunity to comment on the draft rules package.