LONGREAD: greener pastures in NZ

Over the past nine years, across the rolling Waikato farmland of Judge Valley Dairies in New Zealand, a quiet transformation has taken place.

John Hayward and Susan O’Regan set out with a bold ambition – to be NZ’s most sustainable dairy farm. To do that they needed to completely change the way they farmed.

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John Hayward and Susan O’Regan on their Te Awamutu dairy farm Source: Provided

“We have a philosophy of looking beyond what we see,” Hayward tells bluenotes. “I want to be at the front, I don’t want to be someone who is following.”

"The environment has to sit at the front of a business model – it can’t be growth first, environment second.”  -  Hiddleston

“I want to be proactive and try and set an example of what good dairy farming looks like. And what good farming on a whole looks like within New Zealand.”

O’Regan says the couple’s vision on the farm was to “make it sustainable on two fronts; environmentally and economically”.

“We had to be ahead of the game we had to make sure we were doing everything we could to continue to farm for the next one hundred years,” she says.

Hayward and O’Regan are ahead of the game and what they have achieved is impressive.

Across their 240 hectares they’ve regenerated 11 wetlands, fenced waterways and replanted riparian strips.

They’ve re-established native forest which has enhanced biodiversity bringing back fish and native birds all while running a productive and profitable dairy farm and raising a family.

They’ve reduced their cow numbers and their environmental footprint.  By the end of next year they think they’ll be completely self-sufficient and won’t need to bring any extra feed (like palm kernel) through the gate.

This is the kind of story NZ’s dairy sector should be famous for, the kind of story people speak about with pride.

But the largest chunk of the country’s primary sector, dairy farming, is increasingly coming under pressure from changing consumer expectations farmers are struggling to meet - and that is dominating the conversation.

A changing landscape

To understand where we are, you need to wind back to mid-2017. The country was in the middle of an election campaign and urban and rural NZ went to war over water.

City folk blamed intensive farming, farmers pointed out pollution, clogged motorways and waste water mismanagement in cities. Regardless of who was to blame, the state of NZ’s water was laid bare – and it wasn’t pretty.

Report after report showed a pattern of ongoing degradation in many parts of the country – perhaps nowhere more so than amid the plains of Canterbury – with a rapidly growing dairy industry taking much of the heat. The ugly flipside to NZ’s clean green tourism brand started to get attention overseas.

What had once been the domain of greenies and urban lefties became a flashpoint for voters across the political spectrum.

NZ, it seemed, had had enough. Something had to be done, and it needed to be done now.  They voted for change.

The new Labour-led Government inherited the National Policy Statement on Freshwater Management from the previous National-led Government.

But under their 12-point fresh water policy, Labour said they would crack down hard on polluters, make all rivers and lakes swimmable “within a generation” and extend fresh water quality standards.

A new national policy statement would remove as “permitted activity” any further increases in farming intensity – including more livestock, irrigation or fertiliser per hectare and require rivers and lakes to be clean enough for people to swim in during summer without getting sick.

The Minister for the Environment David Parker outlined a proposal from Government to set a nutrient limit for catchments, saying Regional Councils would decide the level of nutrients individual farmers could discharge.

These were pretty radical changes to the traditional farming model which has been NZ’s backbone for over a century.

That backbone has supported the economy with agricultural exports valued at $NZ53.7 billion with dairy making up a whopping $NZ14 billion.

Changing the way we farm

The dust might have settled on the fresh water debate but the plan for fresh-water management across NZ remains pretty fragmented.

While it might not be clear where the start and finish line are it hasn’t stopped farmers from getting on and doing something about it.

NZ’s largest farming company, the government-owned Pāmu, recently called time on the way we farm.  Chief executive of the $NZ2 billion-business Steve Carden said farming had reached its economic, social and environmental limits.

“Our success as a farming nation has been built squarely on converting land to extract maximum profit – usually by putting more animals on the land to produce more meat, milk and wool,” Carden wrote in a recent NZ Herald opinion piece.

“We have been extremely efficient at doing this and it is why, as is often said, Kiwi farmers are the envy of the world.” 

“The problem is we have now reached the economic, social and environmental limits of how we currently farm and we need a new strategy for creating wealth from our farms and from the land we have been entrusted with.”

The messages resonated with many farmers, who say they understand the ‘why’ they just need a bit of help with the ‘how’.

A recent ANZ survey of 330 agri customers showed farmers are pre-empting signalled changes to environmental regulations by investing in environmental initiatives now.

Of those surveyed, 94 per cent said they were aware of proposed changes to environmental compliance and 93 per cent had started investing in improved environmental practices or had a detailed farm environment plan. Almost half were using technology to help them measure and monitor their environmental footprint.

Managing Director for ANZ Commercial & Agri Mark Hiddleston says he is encouraged by how customers are preserving and growing the value of their land and businesses through investment in environmental initiatives.

“We need to build economically sustainable, resilient farming businesses that we are confident can farm well into the future within the limits of the environment they sit in,” he said.  

“The environment has to sit at the front of a business model - it can’t be growth first, environment second. We’re encouraged to see how many of our customers not only have a detailed plan but also have a good idea of the costs involved in implementing their plan and how they are going to manage that cost.”

The future of farming 

When you look at how Hayward and O’Regan have made the transition to a sustainable farming business you can see what the future could look like. Walking around their farm you are struck by how beautiful it is.

The landscape reflects the couple’s love and care for the land and the animals and passion for farming.

They are the first to admit it hasn’t been easy, particularly during the low-payout years but the couple stuck at it. 

While it is clear the investment has been much more than just financial, they estimate they have spent $NZ30,000 a year to get them to where they are now, starting with a farm environment plan.

“We started with an environment plan, decided where we wanted to go, and we looked for opportunities,” Hayward explains.

“We got a land use capability assessment done and looked at our whole farm, identified land that wasn’t suitable for stock grazing and asked ourselves - what does it add to our business and what value can we get from it?”

The couple believe in the future marginal land will be hugely valuable to farmers wanting to offset their environmental footprint.

Land identified as class seven and not suitable for grazing stock has been planted out in 20 hectares of Mānuka and pine allowing them to mitigate sediment, phosphate and E.coli (bacteria) loss while dropping their nitrogen footprint and creating biodiversity. 

In time the trees will also allow them to get carbon credits for the land.

Growing their own maize and controlling costs allows them to focus on higher productivity from fewer cows.

“Some land that was not growing a lot of grass for us and wasn’t high profitable land is actually a really valuable part of our business now,” Hayward says. “Dropping our nitrogen footprint overall has allowed us to operate a little bit more intensively down on our better country that can handle it.”

Every decision around what they do on the farm is measured against what the community expects from them.

“We respect what the community wants and what our consumers want and it’s up to us to farm in a manner that is acceptable to everybody,” Hayward says.

“That is a big drive for what we are doing here, we want to try and change people’s perception of farming and also keep it profitable and sustainable long-term.” 

A role

Hiddleston says everyone has a role to play in the future of farming - and farmers needed to start thinking about their environmental plan and support they needed.

“Farmers should engage third party advice to help them develop their environmental plans to improve the sustainability of their businesses and talk to us about how the bank can support them as they put those plans into action,” he says.

“We are seeing plenty of examples of farmers who are preserving and growing the value of their land and businesses through investment in environmental initiatives.”

Hayward and O’Regan hope sharing their story will show NZ it is possible to make the transition from a traditional farming business to a new, yet to be defined, farming future.

“All I could say to other farmers is open you gate, open your mind, and have a look at where you are going and where you want to be in the next 10 years,” Hayward says.  

“We are in a changing industry and I think the landscape is about to change, so if you can get help and get some advice grab it with both hands.”

Briar McCormack in NZ editor at bluenotes 

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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