Dairy sector profit still on the table, but margin gap tightens
DairyNZ’s latest Econ Tracker update shows most farms will still finish the season in a positive position, although the gap has narrowed compared with early season expectations.
There's been a positive response to the Government's latest move to make freshwater farm plans more practical and affordable.
Federated Farmers described the changes as a positive start that will give farmers a lot of confidence for the future while DairyNZ says the changes are what they have been advocating for over the past six years.
Associate Environment Minister Andrew Hoggard says the aim of the changes is to cut the cost and complexity out of the system and to reduce the number of farms required to have a plan and to take a risk-based approach to certification. He says the new plans will still manage environmental impacts, but without unnecessary red tape, and they won't be required for small blocks.
"Farm plans are useful tools, but they must be practical and matched to actual environmental risk," he says.
Andrew Hoggard says officials are working with industry, sector groups, and councils to finalise improvements through updated regulations.
Agriculture Minister Todd McClay says the Government is recognising existing industry programmes that achieve equivalent environmental outcomes and that farmers shouldn't have to complete multiple plans.
"The new system will also act as an alternative to local council rules and consents where appropriate, allowing landowners to meet requirements in a way that suits their farm systems," he says.
Reaction Positive
DairyNZ's Dr David Burger says his organisation is pleased that the new farm plans will recognise industry programmes and act as an alternative to local council consents where appropriate.
He says they've been working with dairy companies to provide a dairy perspective while the regulations are reviewed and appreciate this clearer direction on these important aspects.
"We look forward to working with officials to finalise further improvements by the end of this year. It has been our long-standing position that the current system should be improved to reduce cost and complexity and better acknowledge the environmental progress farmers and the wider dairy sector are making," he says.
Dr Burger says DairyNZ has long championed an outcomes-based approach to freshwater management.
He says this means starting with the environmental outcomes that communities and tangata whenua want to achieve, and then addressing the specific contaminants of concer, whether sediment, E. coli, or nutrients.
"We are pleased that DairyNZ efforts have helped to secure a pathway to recognising existing industry programmes that achieve equivalent environmental outcomes," he says.
Dr Burger says as part of the new plans consideration has to be given how existing regional plans may need to be amended to accommodate the changes to national regulations, necessary to avoid duplication and ensure integration.
Federated Farmers Colin Hurst says farm plans have huge potential to cut unnecessary red tape, compliance costs, and consenting requirements for farmers. He says a tailored farm planning system that takes a risk-based approach will provide strong environmental protections without over-the-top bureaucracy we've seen in recent years.
"For a farmer, this has the potential to be a game changer, replacing the need for expensive and uncertain resource consents or constantly changing council rules," he says.
Hurst says the Government are making all the right noises - "but we'll be keeping a close eye on the process and engaging with the then to make sure the system works in practice".
"We are particularly pleased to see Ministers have agreed to reduce the number of farms required to have a plan and to take a risk-based approach to certification," he says.
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