Experts at odds over growth

01:54, May 22 2012

The growth in dairying is at risk of being significantly constrained by limits on the nutrients it discharges into waterways unless it can find ways to increase milk production without causing further environmental damage, a dairy sustainability expert has told a top of the south gathering.

Speaking at a Landcare Trust seminar held in Nelson on Friday to celebrate the success of farmer-led projects in cleaning up river catchments, Mike Scarsbrook of Dairy NZ said the challenge for the industry was to make sure policymakers set limits which were realistic and would achieve the environmental outcomes the community wanted.

"We want to make sure they are being put into place to manage real environment issues and not simply as a surrogate for land use control."

There was also a lot of industry concern about the cost of increasing regulation on farmers, which had potential to reduce New Zealand's competitiveness as a relatively low-cost producer of quality milk, he said.

Since 1990 dairying's environmental footprint had increased at much the same rate as the industry's contribution to the economy but "what we need to do is decouple that relationship so we can continue to grow through both increased production and a focus on value-added products and maintain or reduce our footprint".

The industry had received a large chunk of government funding to investigate how to do this and to develop networks of rural professionals, who were in short supply, to support farmers through the changes, Dr Scarsbrook said.


While people like the Commissioner for the Environment Jan Wright were sceptical more milk could be produced for less environmental effect, alternatives such as taking land out of production were unlikely to be acceptable, he said.

But catchment projects like those in the Aorere and Sherry showed it was possible to significantly reduce levels of sediment, faecal bacteria and phosphate by doing "simple things" like excluding stock from waterways through fencing and bridging.

Reducing nitrates – an indicator of how intensively farmed an area was – was harder and there needed to be more debate about what was an acceptable level because if too much nitrogen was taken out of system it would reduce farm profitability, he said.

There was potential for significant efficiency gains through better use of technology and management practices which would enable nitrogen use to be cut giving farmers the "headroom" to increase production without any fall in water quality. This would require farmer action and leadership at a catchment level backed by good science to be successful, he said.

But Dr Scarsbrook's view was challenged by Tom Phillips, a farm consultant specialising in low-input, pasture-based dairying who recently returned from 30 years of working overseas to take up a post with the Centre of Excellence in Farm Business Management at Massey University.

Mr Phillips said it was flawed to argue that New Zealand had to increase milk production and farmers had to grow to survive and he did not see any technological breakthrough solving the industry's environmental problems with nutrient runoff. "My concern about what I see happening in New Zealand is that our comparative advantage in pasture-based systems is being eroded as we furiously try to be like everyone else in the world with intensive systems which are already creating massive environmental problems.

"We were in a stronger position when we had simple pasture-based, low-cost systems."

There were highly profitable pasture-based farms in Europe which were allowed to run only two cows per hectare, he said.

"We need to go back and have a good look at the efficiency of our systems and get back to cost control which we have lost sight of with a rising milk price.

"We are going into a period of increased instability in terms of milk prices, interest rates and exchange rates, so the resilience of a system becomes more important and I think it is flawed that you have to grow your business."

Mr Phillips said if farmers didn't review what they were doing they would be hit by "massive regulatory changes".