Our rivers are stuffed, and getting worse. The Parliamentary Commissioner for the Environment's report on water quality released late last year fingered the steady expansion of dairying as the culprit. The Commissioner covered the environmental issues in her report, but not the economic ones. In our view this scandal is New Zealand's version of the Global Financial Crisis (GFC), where profits of a few are leaving debts for generations to bear.
Let's be clear up front; we aren't blaming the farmers. Like the bankers in the GFC they are just responding to the incentives the market presents them. And nowadays most farmers try to contain the environmental damage, many taking more remedial steps than they are required to. But just like the GFC, this is a massive failure of the regulatory regime. While rules around dairy conversions and intensification are emerging, they are simply inadequate to offset the rising environmental damage - unfortunately way too little and way too late to avert a crisis. Our lax taxation of the income earned on capital - a benefit that all landowners enjoy - also inflates the after-tax return to farming. The gap between what farmers actually earn and what they would if they paid their fair share of tax and paid for the environmental damage they cause, has become so large that the costs of cure are forbidding.
This is a complex issue, so we need to break it into bite-sized chunks. This first article will explain the concepts and set out the basic problem. The second piece will set out the good stuff farmers are already doing, and what needs to happen if we are serious about tackling this crisis, saving our rivers and averting mass contamination of ground water that threatens public health.
It all starts with cow pee. Sure fertiliser can be a problem if applied excessively or at the wrong times, but in the main it's not the culprit. Rather it is cow pee - a simple urine splash from a cow is a massive concentration of nitrogen, equivalent to 1000kg of nitrogen per hectare. This is too much for pasture plants to take up by far. Given dairy cows pee a lot and over time the nitrogen seeps down through the soil to find its way into rivers and groundwater, the consequence from higher stocking rates are obvious.