Transpower has backed away from insisting on tight rules on farming under its pylons.
The owner-operator of the national grid wanted to extend its buffer zone from 12 metres either side of the pylons and cables to 32 metres either side.
But an agreement to keep the zone at 12 metres has been reached in South Canterbury's Waimate district.
Federated Farmers dairy chairman Willy Leferink said this was a precedent for the rest of New Zealand.
"Transpower and the Federated Farmers have agreed to accept this as a protocol for every other district council," he said.
"Basically, the agreement prevents dairy sheds from being built under powerlines, but pretty much allows anything else."
The Federated Farmers- Transpower agreement follows a battle waged last year between Waimate District Council and Federated Farmers' South Canterbury Pylons Group when Transpower sought to impose tighter rules on district landowners operating under and around its pylons. The company attempted to do this by proposing a change to the council's district plan, which was up for renewal.
This would have created a 64-metre no-farm buffer zone that farmers said was too much land to sign away.
The council agreed and left Transpower's proposal out of its draft plan. The company then appealed, prompting a counter- appeal from the farmers' pylons group.
After failed mediation between the three parties, the issue was set for an Environment Court hearing this year.
But now an agreement which has been ratified by the court has averted further hearings.
Pylons group spokesman Miles Anderson said thousands of dollars in legal fees had been saved.
"I think, looking at it from the outside, and considering the amount of money Transpower was spending, it was counter- productive. I'd like to think the efforts of our group and the work put in by Federated Farmers and especially farmer Bob Douglas in the Timaru office helped at the end of the day."
He said the compromise would have a minimal effect on a small number of farming activities in the buffer zone.
"It's good that the plan has now been ratified and all the parties have reached an agreement and Transpower is finally engaging with landowners."
He expected other councils which had yet to deal with Transpower as they renewed their district plans, would take direction from the Waimate agreement.
"Hopefully Transpower will be less aggressive."
Waimate Mayor Craig Rowley said the council saved itself at least $50,000 in legal fees by not having to go to court and the compromise meant the council could sign off its district plan.
Transpower said in a statement it "very much appreciated the constructive working relationship with Waimate District Council, landowners and Federated Farmers throughout this process, which resulted in a good outcome for both the community and the protection of the national grid."
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