Focus on farming: Tackling the sustainability challenge – Where to start?

The agriculture sector faces challenges every day. Farmers are experts at adapting and dealing with these – it’s just what they do. However, in recent times, the sheer amount of challenge and change has put even the most resilient farming businesses under pressure.

Much of this added pressure has come about as a result of the raft of regulatory compliance obligations that farmers now face …just to maintain a legal and social right to operate.

The recent so-called “Howl of a Protest” around New Zealand, highlighted farmers’ frustrations with the proposed legislation as it stands – a reflection that in many cases, they want a rethink and longer timeframes for implementation.

The key areas that the legislation is looking to address include:

  • Climate change
  • Land use
  • Freshwater use and quality

These factors are all interrelated and will impact the way farmers run and manage their business into the future. Some farming entities will be beginning to gather knowledge on each of the above areas (likely engaging with experts) to learn how the proposed new legislations will impact them. On the other side of the fence, there will be farmers who are yet to consider these impacts, or may not even be aware that the way they can operate into the future is likely to change.

Our focus is on supporting farmers in understanding risks and opportunities that will arise, ensuring farmers are forecasting and preparing for the (one-off and ongoing) costs and benefits of good environmental management. Farmers throughout New Zealand will face unique challenges in managing their natural resources (climate, land, water) depending on their location. In this article, we look briefly at the many tools and services available to help farmers grow their knowledge in this field and meet their current obligations.

Managing emissions

He Waka Eke Noa (the Primary Sector Climate Action Partnership) is a key partnership with the farming industry, Māori and Government, whose aim is to build a framework to reduce agriculture emissions and grow resilience to climate change.

By 2022, the Ministers for Climate Change and Agriculture must put forward a system other than the Emissions Trading Scheme (ETS) for pricing agriculture emissions. 

Key dates to be aware of:

  • 31 December 2021 – By this date, 25% of all farmers and growers must know their annual total on-farm Greenhouse Gas (GHG) emissions - “Know your number” - and have a written plan to manage emissions;
  • By 31 December 2022, 100% of farmers and growers must know their number, which leads to;
  • 31 December 2023 and the testing of a system for farm level emissions, accounting, and reporting. (Here at BDO, we are already considering and drafting templates for calculation and reporting of these GHG emissions).

If these targets are not met, all farmers will be placed in the ETS at processor level, with little or no differentiation between the good and the bad performers, resulting in levies or taxes on production.

Just like farmers (in partnership with their accountants) consider the mitigation of tax liability, they will now need to be working with strategic partners to mitigate potential annual carbon liabilities. Therefore, acting now to “know your number” gives time to plan and implement strategies that can manage potential carbon liabilities.

Knowing your number is the starting point, and at its simplest form includes:

  • Closing livestock
  • Fertiliser kgs
  • Estimated forestation area (offsetting)

Once that number is known, you can plan and manage changes that can reduce the GHG footprint for your farm.

Beef + Lamb NZ have recently launched an on-farm emission calculator, along with user guidelines and tutorials. Fonterra and other processors have already covered suppliers by assisting them with farm environment plans.

Essential Freshwater policy

It’s important farmers understand the Essential Freshwater rules and regulations and what they mean for them, including both the National Policy Statement and policy set by local regional councils. There are a number of industry groups such as Beef + Lamb NZ, DairyNZ & Horticulture New Zealand that are helping farmers navigate these rules, so farmers can take environmental management into their own hands. 

Farm Environment Plans (FEPs) will be compulsory by 2025 under the National Direction for Freshwater. Horticulture New Zealand has approximately 90% of fresh fruit and vegetable growers under audited FEPs. Fonterra are supplying FEPs for free to their farmers. 

How does the policy aim to make change?

Ultimately, the Essential Freshwater policy is being put in place to improve freshwater quality and management in New Zealand.  Fresh water is an essential resource for food production, biodiversity, human health, and recreation. The Our Freshwater Report highlighted the challenges of water quality in a farming landscape. Under pastoral land use, nitrogen and phosphorus concentrations and sediment loads are much higher than those under natural conditions. There has been some great work done so far by local catchment groups (including engaged farmers) and improvement is being seen. However, a high proportion of our rivers in farming areas are still classified as polluted. 

There are four policy documents under the Essential Freshwater package, these are detailed below and took effect on 3 September 2020:

  • National Policy Statement for Freshwater Management (NPS-FM 2020) 
  • National Environmental Standards for Freshwater (NES-FW)
  • Resource Management (Stock Exclusion) Regulations 2020
  • Resource Management (Measurement and Reporting of Water Takes) Regulations 2010

How does this affect farmers and their land use?

  1. Intensive winter grazing – Areas of intensive winter grazing must comply with the certified Freshwater plan: Restrictions apply to the size of cropped areas and slope of land used, pugging is restricted, livestock exclusions apply and replanting of cropped paddocks have timelines. 
  2. Intensification and land use changes – Resource Consents are required for 10ha or more of land to be converted to more intensive use. 
  3. Nitrogen caps – Caps apply to nitrogen fertilisers.  Dairy farms must report their use annually.
  4. Stock exclusions – Exclusion rules apply to waterways and wetlands.
  5. Wetland management – Disturbance of wetlands is only permitted for certain reasons and consent may be required.
  6. Feedlots & stock holding lots – From 2021, feedlots need to meet minimum standards (permeability, effluent etc). 
  7. Water takes – There are increased requirements for consent holders taking more than 5l - 20l of water per second.

Summing up – our thoughts

Farmers often work alone due to the nature of their business. However, they don’t need to go it alone when tackling their ever-increasing environmental regulatory compliance obligations. It’s important farmers tap into the industry and professional support that’s on offer.

Despite the “Howl of a Protest”, there has been little sign of any slowdown in timeframes for implementation of proposed legislation.  Again, this highlights the importance of working with industry, professional and community groups to keep moving forward.

Ultimately, we all want great outcomes for the environment so it can continue to sustain our future generations. But a good balance must be struck between the practical and financial implications for our farmers, and the environmental targets we aspire to achieve.