Friday, December 8, 2023

N limit surprises

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A third of dairy farmers might have to cut nitrogen fertiliser use and suffer lower profits because of a Government-imposed cap on its use.
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Farmers, advisers, councils and Government-appointed scientists were blindsided by the news nitrogen fertiliser will be capped from next year at a maximum of 190kg a hectare a year as part of the Action for Healthy Waterways policy.

The new rules require farmers to report the amount used every year. 

However, many are questioning why the cap was not raised during the consultation process.

AgFirst economist Phil Journeaux doesn’t know where the figure of 190kg came from. 

He challenges the Government’s claim the impact will be limited to 2000 farms.

His analysis, done for the Fertiliser Association, calculates 35% of dairy farms will be required to lower nitrogen applications.

Arable farmers and horticultural growers are exempt from the cap.

Journeaux and fertiliser company spokesmen say they can find no evidence of the cap being part of the water regulation consultation and challenge how effective it will be in lowering farm nitrogen losses.

“This is sloppy policy to be frank. 

“It is very top-down in approach. If you look at our focus on output limits which we have been working on in NZ, while that is not perfect it is a far better approach than this,” Journeaux said.

The loopholes and uncertainties bedevilling European type restrictions on fertiliser will now fall on NZ farmers, including defining whether one is a dairy farmer or an exempt arable farmer.

“If you grow maize on your dairy farm do you count that, given it is a crop? Then, if it is counted and you buy from a maize grower, are they classed as arable and exempt, despite supplying dairy farmers with feed?”

Journeaux estimates an average Canterbury dairy farm applying 234kg a hectare a year can expect to take a 13.9% hit in its earnings every year. The 18% reduction in nitrogen results in a 6% drop in leaching.

Extrapolating the workings across the 35% of farms affected puts an estimated earnings loss of $160 million a year, based on an average decline of 10% in all farms’ earnings.

That is in marked contrast to the Government’s claim the cap will cost the industry only $30m a year by 2050.

Ravensdown innovation and strategy general manager Mike Manning said the cap invites farmers falling below it to ramp up application.

“It’s like having a speed limit and going right up to that limit. 

“It makes no sense and does not allow for the fact farms can have high nitrogen losses even if they are well below that limit.

“The outcomes approach to improving water quality has been disregarded with this prescriptive requirement. 

“It appears the entire consultation process has been a sham.”

Massey University fresshwater ecologist Professor Russell Death, a member of the science and technical advisory group advising the Government, likens the cap to a sticky plaster.

“The nitrogen problem is predominately coming from cow urine. Fertiliser is a minor contributor. It’s a Band Aid to appear to be doing something but actually not.”

He also has no idea where the 190kg limit came from.

Ballance science and strategy manager Warwick Catto said the imposition of the limit is only going to bring a level of confusion into catchments already facing well defined waterway standards set through regional council consultation.

“This will be like a game with two referees.  

“You will have the regional council standards to meet and this 190kg rate to meet. It is not the amount of nitrogen used, it is the impact it has.” 

DairyNZ strategy and investment leader Dr Dave Burger said DairyNZ is surprised the Government chose an input control instead of focusing on improving farm nitrogen use practices, as DairyNZ suggested.

“Our calculations are that between 16-18% of dairy farmers would exceed the proposed cap. We expect many of these farmers are in Canterbury.”

Agriculture Minister Damien O’Connor acknowledged the limit is a departure from the Government commitment to a more outcome-focused approach to limiting nitrogen.

“This is one area, however, where most farmers I speak to are looking at reducing their nitrogen use anyway. I have not had pushback from farmers who I have spoken to about it.

“It will of course, however, affect some. We are not pretending otherwise.”

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