8 June 2005

Speech to the Dairy Farmers of NZ AGM, Wellington Jeanette Fitzsimons, Green Party Co-leader

Thank you for the opportunity to be part of the panel today.

I don't class myself as a dairy farmer, though some years ago I did stand in for a friend and milked cows for a couple of weeks. However I do own six cows one of which I milk for the house, and we foster calves on them so I have some experience of the animal, if not the industry.

Dairy farming has been a mainstay of the New Zealand economy for generations. It has undergone tremendous change - technological and organisational - especially in the past 20 years.

It prides itself on being the most efficient dairy industry in the world and is a major player in international trade.

But the efficiency of the modern industry has come at a high cost.

With farms getting bigger and more expensive, and the major return being the increase in the capital value of the land, owning a farm is no longer a foreseeable option for most young rural people.

So they head to the cities for work and to pursue a different dream.

The effect of this on the viability of rural communities is grave.

It's the sort of thing that leads to the closure of rural schools. In 1999 we fought that under National and over the past couple of years we have been fighting it under Labour.

The Greens believe that we cannot have an efficient and profitable farming industry unless we have vibrant rural communities with the social services they need for families.

But as you might have expected, I am going to concentrate on the environmental costs of the changes that have occurred dairying.

In the past few years, there has been plenty of graffiti on the fence posts.

I'm sure you noticed the Fish and Game Council campaign called 'Dirty Dairying' that drew attention to non-point source pollution of waterways.

It showed cows walking through streams stirring up sediment and shitting - definitely not a good look. It upset quite a few dairy farmers.

I dare say it contributed to water quality becoming the top-ranked environmental issue in New Zealand in a recent Lincoln University study.

And NIWA, New Zealand's premier water quality research institution, published its study into the state of the nation's waterways.

It looked at many aspects of rivers but the most startling conclusion was that 95 percent of lowland waterways are too polluted to swim in, not to mention to drink from.

Many are even too polluted to be used for stock drinking water.

These waterways were those passing through urban areas and lowland pasture

We need to trap and filter the runoff from roads, which pours grease and oils and heavy metals into waterways. We need to fix leaky septic tanks and treat all sewage that goes anywhere near water. And particularly, we need to change land use practices so that we keep nutrients and manure out of rivers.

Late last year the Parliamentary Commissioner for the Environment released a report titled 'Growing for Good' in which he highlighted the increasing environmental problems associated with intensification of land use - not just dairying, but certainly including it.

The key issues were increased use of nitrogen and water.

Urea application has nearly quadrupled in under ten years - the vast majority of this being on dairy farms. More urea means more cows to the acre and even more nutrients - and E coli bacteria - in the rivers.

There are things that can be done to reduce the impacts of dairying on rivers, and some farmers have made huge progress towards doing them. More and more farmers are fencing cows out of rivers and planting riparian strips to retain nutrients and provide for biodiversity. Unfortunately water quality isn't improving in most places because overall increased stocking numbers tend to outweigh the improved practices.

Some farmers - and fertiliser companies - are leading the way with nutrient budgeting, aiming to apply only the fertiliser that can be used by the grass. Some are providing winter pads for cows with effluent collection. Some are protecting and restoring wetlands, which greatly slow down the release of nutrients into waterways.

The hardest challenge is in areas like the Taupo basin and around the Rotorua lakes where we have a stark choice - if we are to save our lakes we need to reduce stocking densities over all.

The second big input is water.

Over 30 percent of dairying land is irrigated - it is only irrigation, which has enabled widespread conversion of Canterbury farmland to dairying, with some 600,000 cows there now. Yet with its shallow and stony soil Canterbury is one of the least suitable areas for dairying. Already, after little more than a decade of widespread dairying on the plains we are seeing nitrate contamination of groundwater - a health hazard to those drinking it.

Irrigation and runoff work together to degrade rivers - more pollution in and less water to dilute it. As you know, Canterbury Regional Council has now declared red zones where ground water is already over-allocated and several rivers are in the same state. We have all thought of water as limitless and free, but the time has come to use it sparingly, and make sure that each drop provides maximum value. There is a move now in Canterbury to replace older wasteful irrigation systems with more efficient ones and we applaud this.

The third input is energy. Synthetic nitrogen fertiliser production is hugely energy intensive. Our natural gas resources are depleting fast and there are questions about how much more will be found, and at what price. Dairy sheds and pumping of water are very electricity intensive and we are starting to see farmers themselves objecting to the effects of higher electricity demand. Many farmers in the Waitaki Valley were distressed at the prospect of 73 percent of the great Waitaki River being put in a canal; for 60 km - a canal that would have cut across their communities and farming operations. Fortunately that project did not proceed.

I've been working with farmers in the Waikato who are fighting giant pylons Transpower is trying to impose on their land. Much larger than any others in NZ, with much more powerful electro-magnetic fields, very close to homes, impeding the use of airstrips and ruining their rural outlook.

The Greens' analysis is that the lights can be kept on in Auckland without these lines if we put together a package of measures that involves more direct use of gas in Auckland, some use of waste wood as an industrial fuel, and much greater energy efficiency, using well-proven technologies that pay for themselves quite quickly.

So I've been advocating that Aucklanders should use energy wisely so the Waikato can avoid these lines, and putting a lot of effort into ensuring that such a package is properly investigated by the Electricity Commission before it makes its decision on whether the lines are the best alternative.

Farmers themselves could use energy more wisely too. Take the farmer near Cambridge who has installed a biogas generator to convert effluent into pH-neutral, reduced nitrogen, organic fertiliser with zero live coliform bacteria. In the eighties a number of farmers built biogas plants after the oil shocks of the seventies. They provide the best energy yield of any technology using farm wastes, as well as valuable fertiliser. As oil prices shift into a new gear - around $50/bbl rather than the $10 they were in the late nineties, these plants will be cost-effective again. And as world oil supplies peak and begin to decline they will provide security against energy shocks. Some farmers are leading the use of solar panels to heat water in dairy sheds. There's an exciting new technology using ice banks to chill the milk more rapidly, meeting higher product standards, and using only a trickle of electricity throughout a 24-hour period rather than large peak demands twice a day - which ironically contributes to the so-called 'need' for new transmission capacity and giant pylons.

In an oil supply and greenhouse gas-constrained world, hard questions will have to be asked about production methods in all industries. I believe it would be sensible for the dairy industry to analyse its vulnerability to rising oil prices while there is still time to plan to address them.

You asked me to talk about compliance costs, so I will.

A recent report by Environment Waikato has found that up to 57 percent of dairy farmers are non-compliant with the conditions of their effluent management resource consents and 16 percent were seriously non-compliant.

It has been really disappointing to hear some of the responses to these reports from the likes of Federated Farmers' John Aspinall, but it has also been heartening to hear comments such as those of your own chairman, Kevin Wooding.

In response to the Environment Waikato report, Kevin has said, "Farmers just have to lift their game. The industry does not support reckless polluters. Effluent management needs to be second or third on the list, not last. Heavy-handed action is required to bring offenders into line." The Green Party certainly supports those sentiments.

I believe NZ dairy farmers are proud that they are not reliant on state subsidies any more. But some, through their actions or inactions, continue to obtain subsidies from the environment. And there are others who are leading the way in making dairying both economically successful and environmentally responsible.

Take the various projects highlighted by the NZ and Balance Farm Environment Awards, which demonstrate that doing the right thing by the environment doesn't cost the Earth and often improves financial balance sheets.

As Kevin says "There is pressure coming on from all directions. It's about information and education."

And that's probably right. If dairy farmers only want to supply commodities to low value markets then maybe they don't need to worry about the image of their activity, although they themselves will suffer when they can't enjoy swimming or fishing in streams and rivers or don't hear any tuis and bellbirds for the lack of suitable habitat for them.

But if they want to supply premium processed products to high value markets then image of the production system is vital and increasingly concerns about methods of production and the impacts of those methods are becoming part of consumers' decision-making.

This is where competitiveness comes in.

Instead of looking at environmental management requirements as just additional compliance costs, I challenge the dairy industry to look at them as investments - both in the environmental well-being of this land and also the competitiveness of the industry.

Consumers willing to pay the most for our products will demand more than just flavour.

They want to know that products have been produced in systems where human rights, animal welfare and the environment have all been respected.

Being so far from many of our markets already imposes huge transport costs - environmental and financial - on our producers. The penalty of transport costs will get worse as oil prices rise.

Already several South American countries can produce milk more cheaply than we can.

We need to differentiate our products from our competitors if we are to continue to serve the high value markets rather than just be a raw commodity supplier.

A number of years ago, farmers prepared farm environment plans with the assistance of Regional Councils or their predecessors and central government funding. Unfortunately, that went by the wayside as central government left more and more to the market in the '80s and '90s. Perhaps it is time to reinstate those, and to implement them. They still need to address issues of soil conservation but they probably also need to address issues of water quality and use, energy intensity, the scale of activity. This may sound to some of you like more compliance costs. As I said earlier, I believe it is better viewed as an investment.

I've issued some challenges here, but I'm confident dairy farmers won't bury their heads in the silage heap, but will pay heed to Growing for Good and the other reports I mentioned earlier.

The industry has led the way in innovative technologies for many years - I'm confident it can do so to safeguard and enhance the environment just as well. Thank you.

ENDS

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