Saturday, December 9, 2023

Financial costs keep mounting up

Neal Wallace
Costs from new Government legislation keep mounting on the primary sector.
Reading Time: 2 minutes

They are direct taxes, extra costs such as resource consents, mitigation costs and lower production.

A livestock tax, part of the Zero Carbon Bill, is estimated to cost an average farm about $30 a week but that figure depends on the Government providing a free allocation covering 95% of the actual emissions costs.

Meeting lower methane emission targets will also prove costly, with some farmers claiming the only way they can meet them with existing technology is to cut production or stock numbers.

Federated Farmers estimates every 1% reduction in methane will cost the country $300m in production.

The Government proposes cutting methane emissions by 10% of 2017 levels by 2030 and by 24% to 47% by 2050.

Its Action for Healthy Waterways discussion document suggests farm plans be compulsory from 2025 and estimates the cost at $3500 a plan with two-yearly audits at $1500 a pop. Extending fencing to lakes, streams and wetlands more than 1m wide will cost $600m over 10 years.

Farmers will be given three years to complete fencing for dairy cattle and pigs or five years to exclude beef cattle.

The document proposes increasing the setback to 5m.

Farmers will have to set a time line and plan for fencing streams and drains less than 1m wide.

The document estimates fencing a 127ha downland dairy farm will cost $87,000, a 281ha lowland beef farm $89,000 and a 571ha hill country farm based on 10% requiring exclusion, $17,000.

It also proposes immediate restrictions on land use intensification through irrigation expansion, changing land use and increasing forage cropping until councils implement the national policy statement on fresh water by 2025.

It also advocates the introduction of local and national caps on nitrogen leaching, with Federated Farmers claiming nitrogen reduction targets of 80% effectively make existing land use unviable.

This extra compliance is expected to cost a 45ha commercial vegetable grower about $9200 a year to meet stricter sediment and nutrient controls, creating a farm plan and upgrading irrigation efficiency.

The plan estimates improving the management of winter crops to reduce sediment loss means 2000 farmers will need resource consent to operate outside the new standards, at a cost of $3000 a consent.

Improving stock holding areas and feedlots will also require consent at $3000 a time and $72 a cow in new infrastructure costs.

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