5 Dairy leaders back strategy Vol 17 No 19, May 14, 2018
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Fert tax coming? T
Richard Rennie richard.rennie@nzx.com
HE political reality of getting environmental runs on the board before the next election might prompt the Government to speed up implementing land and water plans and consider taxing fertiliser. It appears Environment Minister David Parker wants regional councils to implement plans to control nutrients and improve water quality sooner than is being achieved, Local Government New Zealand regional sector chairman Dough Leeder said. Parker indicated he will shorten the deadlines for putting in place regional plans by amending the National Policy Statement on Freshwater, Leeder, who is also Bay of Plenty Regional Council chairman, said. Previously councils had until 2025, or 2030 if approval was granted, to adopt plans. Leeder wondered what aspects of the process councils will have to ignore or fast track to meet earlier deadlines. “It will shorten up the deadline considerably.” Meantime, ecologist and consultant Alison Dewes said given the complexity of the issues confronting the Government on nutrient losses and water allocation there is little prospect lowering nutrient losses by cutting cow numbers in some catchments will gain the necessary political capital in a short time.
Parker has said a raw cap on cow numbers will not occur but nutrient loss limits will be set and might affect cow numbers in some areas. But Dewes said given the problems already seen around trying to run Nait it is unlikely the Government can manage such an aim. “Which leads to the point where they could do something like a tax on nitrogen fertiliser as something of a proxy tax on intensive farming. “They have to look good within one term on this so they will not be looking for any complex policy that takes time to develop.” She likened it to a tobacco tax with the product traced relatively easily from source to use and capable of raising funds that could be allocated to efforts to mitigate environmental damage. The Government could vary the amount charged but to raise $70 million or more a year would require a charge of at least $100 a tonne. Sweden has a nitrogen fertiliser tax in place, set at 20% of the fertiliser price. Austria had one until entering the European Union in the mid 90s. A research article in the Journal of Environmental Planning and Management acknowledged a tax’s low administration costs and noted it resulted in a drop of 15% in fertiliser use. Researchers said tax is not a perfect method but can be part of an effective policy mix to solve nitrogen problems. The tax would capture all nitrogen user including horticultural operations. Estimates are NZ uses about
There is nothing that new in what the minister wants to achieve for farmers in many regions. Chris Lewis Federated Farmers
ALTERNATIVE: Rather than capping cow numbers nitrogen tax could act as a proxy tax on intensive farming, consultant Alison Dewes says.
700,000 tonnes of nitrogenous fertiliser a year so a tax of $150 a tonne would take $100m a year. For an average 147ha dairy farm applying 200kg of nitrogen fertiliser a year a hectare, the cost would be about $4500 a year. Dewes said a tax could also prove invaluable for upgrading and adding more horsepower to regional plans to be developed and ultimately enforced. Waikato’s Healthy Rivers plan has had $13m spent on it to date, with final plan details still in the submissions phase. Leeder said his council started
work on its Plan Change 10 for the Rotorua Lakes area in 2003. It is under appeal and still to be implemented. “The process we have today is too long from the point of view of being efficient and while all this is going on we are not making a material difference to water bodies.” Leeder said Parker wants an end to water degradation and a rapid improvement in water quality. “To give the minister credit he has got to this point of view that things have got to happen more quickly but the quality of those
decisions have to be based on good science and be practical.” Federated Farmers dairy chairman Chris Lewis said with such plans already in place and in some cases already notified, many farmers have already stepped their stock numbers down from historically higher levels. Eastern Waikato farmer Richard Cookson said declining land values on more sensitive country in his region are also a reflection of farmers taking their cue on environmental standards. His concern is what enforced limits will do to farmers on more marginal country who need higher inputs to maintain farm production and profitability but incur higher nutrient losses. “We need to give these landowners greater opportunities to find a way forward under these sort of controls. “At the moment these farms face loss of equity as values fall and they will struggle to adapt to the new standards. “The Government and society owe it to these farmers to help them come up with alternatives for the sake of them and of the communities they support.”
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