Dairy farms using same amount of water as 60 million people

17 September 2017

For Immediate Release

Dairy farms using same amount of water as 60 million people, experts say

Using Dairy NZ numbers, economist Peter Fraser and agricultural consultant Dr Alison Dewes calculate the water consumption of New Zealand dairy farms is equivalent to the residential use of 60 million people.

This is on top of the often quoted figure that New Zealand's dairy herd has the environmental footprint equivalent to 90 million people.

Debate over water use has become a key electoral issue following the Labour Party's proposal to charge irrigators a royalty of up to two cents for every thousand litres (one cubic metre) of water used. This has resulted in considerable confusion as claim and counter-claim are exchanged.

"Let's start with Dairy NZ's own numbers" Mr Fraser said.

Dairy NZ states there are 12,000 dairy herds in New Zealand and collectively they consume 4.8 billion cubic metres of water. Given residential water use in New Zealand is around 80 cubic metres per person per annum, these farms are collectively using water equivalent to 60 million people.

"This seems quite a lot" Mr Fraser remarked.

However, in terms of water use, not all farms are created equal - as 10,000 dairy farms do not irrigate at all. As a result, they account for only three percent of the 4.8 billion cubic metre number, which implies the 2,000 irrigated dairy farms use the other 97%, which is 4.65 billion cubic metres.

This is equivalent to the residential use of 58.2 million people, which is slightly less than the combined populations of Sydney, London, Los Angeles, Tokyo, Jakarta, Rio, New York and Sao Paulo.

"The bottom-line is Dairy NZ's numbers suggest fewer than 20 percent of dairy farms are using over 95 percent of the water - and that hardly looks like a random walk" Mr Fraser said.

"The implication is if a water royalty was imposed on irrigators then over 80 percent of dairy farmers will be unaffected" Mr Fraser said.

However, this message is not getting through to farmers.

"As illustrated by the farmer protest scheduled this week for Morrinsville, it is clear many farmers are being unduly worried by baseless scaremongering - especially as Morrinsville is hardly 'ground zero' for irrigated dairying."

"I therefore concur with the analysis undertaken by Radio NZ and the University of Auckland Public Policy Institute that irrigated dairy farms will face an annual bill of around $14,000 if a two cent per cubic metre water royalty was imposed - indeed, I calculate most of these farms will be paying between $10-15,000 each, which is nothing like the $50-100,000 claimed by the National Party.”

However, there is a group of 'mega-farms' that are 'mega-users' of water - and their potential water bill will be considerably higher simply because they use considerably more water - and that seems both efficient and equitable.

Dr Dewes says most people do not realise the sheer volume of water being used by irrigated dairy farms, especially if they are sited on leaky, gravelly soils (as is much of Canterbury).

“Each of these farms, on average, uses 1.16 million cubic metres of water. This is equivalent to the residential water use of 14,500 people, which is a little over twice the population of Morrinsville" Dr Dewes explained.

Even these farms face a prospective annual water bill of only $23,300 at two cents per cubic metre - meaning to get to the $50,000 figure a farm either has to be enormous or diversified into wet-rice farming.

Dr Dewes says some of the claims coming from National Party leader Bill English and finance spokesperson Steven Joyce show neither understand New Zealand dairy farming systems.

“Canterbury is ground zero for irrigation in New Zealand - and the increase in irrigation across Canterbury is being facilitated with soft money from National’s irrigation infrastructure fund. The fact is less than seven percent of all pastoral and horticultural land will be faced with a water royalty.

“It would be more helpful if the National party focused on developing sound policies that help farmers transition to high value, resource efficient land uses with a lower water, nitrogen and carbon footprints than pollute the media with scurrilous sound bites" Dr Dewes concluded.

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