Healthy Rivers - The implications of cleaning up the Waikato River

Introduction

The purpose of the proposed plan change is to improve the water quality in the Waikato and Waipa rivers over an 80 year time frame so that both rivers are swimmable and safe for food collection along their entire lengths.  The proposed plan change has had two years of closed door development and was notified to the public on 22 October 2016.  The Waikato Regional Council is open for submissions;  submissions close at 5pm on 8 March 2017.  If the change is approved, then all rules will be back dated to the date of notification.

Catchment and the basics of the rules

Healthy Rivers encompasses the Upper and Lower Waikato River catchments and the Waipa river catchment.  Sub-catchments within the area have been assigned a priority ranking to determine the dates by which the properties in the sub-catchments need to be on board.

Rules 1 and 2 are permitted activities which allow properties with low risk factors to continue to operate but must be registered with the Waikato Regional Council by the date specified by that property’s sub-catchment priority date.  Rule 3 is for properties which do not fit under Rules 1 or 2 but are still a permitted activity.  Activities under Rule 3 must be registered to a Certified Industry Scheme and have a Farm Environment Plan.  Rule 4 is a controlled activity and all properties under this rule must have a Farm Environment Plan and a Nitrogen Reference Point.  Commercial vegetable production will now be a controlled activity under Rule 5 and all properties under this rule must have a Farm Environment Plan.  Rule 6 covers all farming activities that are not covered by Rules 1-5 and is a restricted discretionary activity.  Rule 7 is for non-complying activities and land use changes (Figure 1) and will therefore require consent.  

Farm Environment Plans (FEP)

Schedule 1 of the plan changes sets out the requirements for a FEP and a FEP must be certified by a Certified Farm Environment Planner.  Variations of FEPs have already been established, like Fonterra’s Sustainable Milk Plans or the Nutrient Management Plans which are included in most Federated Farmers leases.  All properties that come under Rules 3-6 must have a FEP in place by their priority dates.

An FEP should include the identification and assessment of risks to the environment on the farm and the actions that will be taken to mitigate the environmental impacts.  In the long run, implementing a FEP may yield business improvements due, for example, to improved sustainability and environmental awareness.  The FEP might also include a long term maintenance plan and on-farm development plan.

The FEP that is required under the Proposed Plan Change 1 must include:

• Identification of areas of concern, including critical source areas for sediment and nutrient loss, erosion and effluent;
• Assessment of the management practices for nutrients, pasture, cropping and stock and then set out improvement options;
• A spatial risk map and a nutrient budget;
• A description of the actions that will be taken to mitigate the identified risks;
• A description of actions and time frames to ensure that the diffuse discharge of nitrogen from the property does not increase beyond the property’s Nitrogen Reference Point – using a five year rolling average annual nitrogen loss;
• Further requirements are outlined in Schedule 1 of the plan for FEPs for commercial vegetable production.

Certified Industry Scheme (CIS)

The purpose of Rule 3 being a permitted activity, coupled with the requirement that both a FEP and CIS are in place, is to allow farmers to continue their farm activities and to give some flexibility in the actions they take to mitigate the environmental impact of the farm activities.  The CIS is designed for the farmer to be able to carry out their permitted activity while still being under the same level of scrutiny as would be applicable under a resource consent.

Schedule 2 of the plan change sets out the requirements for a CIS.  A CIS will be a more administrative scheme than an FEP.  There are currently no restrictions on who can develop and implement a CIS, but they must all be approved by Waikato Regional Council.

Changes to rules for harvest operations

Forestry harvests now need to notify Waikato Regional Council at least 20 days prior to commencing harvest operations within the Waikato and Waipa catchments.  There must also be a documented harvest plan which includes a harvest plan map and a description of the controls that are in place to manage the harvest and risk to water bodies.

Practical implications of the Healthy Rivers plan change

The biggest implication of the proposed plan change is the financial burden that it will place on farmers and the region.  A case study undertaken by Federated Farmers and Fonterra showed that on-farm costs for an FEP and associated compliance costs could range from $1,000 to $350,000, with some farms in the study incurring annual costs as well.

The cost of the Nitrogen Reference Point (NRP), as calculated by Overseer (or other approved model) will also have an impact on how farms and other activities are run.  For activities requiring a NRP under the proposed change the higher NRP of the reference period of either the 2014/2015 season or the 2015/2016 season will be used and for commercial vegetable growers the period from 1 July 2006 to 30 June 2016 will be used.  This may have the potential to severely limit the future production of land as the dairy down turn greatly affected the 2015/2016 season. 

As a short term implication of the plan, the decreased opportunities for land use changes could potentially impact the value of some land and the terms of future sales or purchases.  While the plan change is still in its initial stages, it is important to keep the practical implications and rules in mind when considering selling or buying land in the Waikato or Waipa catchments.

Leases, sharemilking agreements and other farm contracts will also be affected due to the requirement that some farms have an FEP or be part of a CIS.  This will need to be considered when entering a new agreement or renewing an old one.

Dale is a Managing Associate in our Commercial Team and can be contacted on 07 958 7428.