Tratamientos y seguimiento

Farmers in the Catchment were worried that Variation 5 would put them out of business. The Court, however, had allowed two important features (Environment Court, 2011). First, the amount of nitrogen discharge allowance to be allocated to a farm was to be grand-parented. That is, it would be based on historic levels and calculated for each farm. (One rejected alternative was to apply an average value across all farms in the Catchment). Thus farms could carry on operating as they had done in the benchmarking years. Second, as previously mentioned, farmers could choose one year (between 2001 and 2005) on which their nitrogen limit was to be based. This period included

drought years (with lowered farm production) but, according to interviewees, it also included at least one year when the climate was very favourable and production was particularly high. Thus business as usual appears to be a realistic choice under the Variation 5 regulations. This section reports on concerns expressed by farmers throughout the Catchment about the effect of the regulations, before focusing on the reasons why farmers in the north have chosen not to change land-use.

Having thought the regulations “…would just go away” farmers apparently had become accepting of

Variation 5, but grand-parenting had not eased their worries about the future of their farm systems under a cap, as this farmer in the western sector explains:

Say sheep prices crashed - we would have nowhere to go. We can’t run all cattle [e.g. beef] and make the same amount of money that we do now and we can’t milk cows (and some of this land here is suitable) … We are locked into farming a fair proportion of sheep because of our NDA.

As part of the Beef + Lamb New Zealand Farm Monitor Programme, this farm was used for a desk- based analysis of a dairy support system and this demonstrated the difficulties that these smaller sheep and beef farms face in changing land-use. The study found that this farm could not produce sufficient feed for a dairy support operation and that supplementary feed would have to be brought

in – but to do this would require the owner to purchase extra NDA. It is the inability of the farm to

adjust to market demands (such as the demand for dairy support) which appears to be at the heart

of this farmer’s concerns, particularly as it is a small/medium sized farm with little ability to retire less productive areas and concentrate NDA on highly productive land. For other farmers, changes in life circumstances lead to similar problems. As this ballot farmer (located in the southern sector) pointed out, farm systems need to be able to change for social as well as market reasons:

[Name] is 52, he’s got stuffed knees and osteoarthritis in his toes. He doesn’t want to dag sheep any more - doesn’t want to run drenching things - but this is a small one-man unit … He would dearly love to go to dairy grazers but we can’t do that, - we haven’t got enough NDA to go straight [100%] dairy grazers – we need sheep.

Farmers elsewhere in the Catchment, who chose to continue to farm under the regulations, voiced similar concerns that farms are now locked into the situation that they were in during the

benchmarking years, are worried that markets will move and that they will not be able to respond appropriately, and further, are hoping that science will eventually provide a solution. A farmer, located in the northern sector, when asked how he planned to operate long term under a cap, suggested that science was the only solution:

[I’ll do it] by – well – hopefully there’s going to be some more science coming through with mitigation options….

Without such science-based solutions, farmers suggested that increases in production levels over time would be unavoidable. This however, requires a sufficiently high level of NDA or the ability to

purchase more. A manager on one of the Māori-titled blocks in the southern sector hazarded a

guess at the level of NDA required for a (large) sheep and beef farm to be commercially viable long term:

An NDA of 22 would see me through the next, say, 20 years. An NDA of 18 will last the next 10 to 15 years but with an NDA of 13-15 the farmer is in trouble already and their land will be in trees within 5 years.

By way of comparison, the median NDA for pastoral land in the Catchment in 2013 was 12 with a range from 8 to 29. Thus without the input of science, farmers are predicting that, long-term, farms may become less viable. Should this occur it might be expected that less viable farmers would sell NDA and perhaps exit the Catchment. Interviewees, however, including one that had purchased nitrogen themselves, claimed that they would never sell nitrogen. This farmer, located in the northern sector, summed up the views of many:

Look cap and trade is a wonderful thing but I would never sell nitrogen because what you are doing is selling the productive ability of your land.

Thus NDA is considered to be integral to the productivity of the farm – an asset that would affect

land values. A local real estate agent, with 35 years of experience in selling land in the district, agreed and further suggested that land with a low NDA could be unsaleable.

That 40 ha [in the northern sector] that is proving hard to sell – it adjoins [Name’s] farm and although he could use the land he won’t buy it – it is of no use to him because it has no NDAs.

Thus some farmers saw themselves as having few options. They wanted to stay farming, they would not sell nitrogen because of the potential effects on capital value and they were convinced that, despite the grand parenting of allocations, caps on production would make their farm unprofitable long term. The farmer quoted below, with a medium sized farm in the northern sector of the Catchment, saw no future for farming under a cap and had decided to sell.

One of the reasons I am looking to sell is because I think the long term future here is not good. I have enough NDA to do anything that I want but even so costs increase over time99 _{and, with a cap stopping me increasing} production, in the long run I won’t be able to recoup those cost increases. Eventually it will wipe me out.

In 2013, all farms in the Catchment were operating under their allocated caps100_{, most because of}

weather conditions. A drought in 2008 was followed by severe drought in 2013 and NIWA reported

that soil moisture that year was in extreme deficit (McMicheal, 2013). Many farmers had opted to

reduce stocking rates because of the lack of feed. When rainfall resumes in the future, however, these farmers cannot increase stock numbers (beyond the number that their NDA allows) in order to make up for lost income. Under the regulations, flexibility of management is limited to nitrogen trading. The farmer quoted below (located in the western sector) owned a medium sized sheep and beef farm and is doubtful about their future:

Sheep and beef is what I want to do – but within that there are not many choices … [So] we carry on as we are – but that is it – we can only ever carry on as we are.

Thus sheep and beef farmers, particularly those with small farms and/or low NDAs and who haven’t

changed land-use, view their future with concern.

Of note in Table 16, is the amount of land that has not changed land-use but is associated with a nitrogen trade. This same anomaly occurs in the whole study area (see Appendix F) and, since it has not been explained by the land-use changes found in this northern case, is further addressed in the following case (Chapter Seven) where the focus moves to the local (community) level.