Dairy farming is a crutch to our economy, but under current conditions, it’s financially and environmentally unsustainable. With the National Party’s links to farming interests, that’s unlikely to change soon.
There’s no doubt about the significance of dairying to our economy, and the role of New Zealand dairy in global markets. Dairy farming contributes $5.6 billion pa to our economy – 2.8% of GDP. That’s 10 x the wine sector, 3 x forestry and logging and 40 x the utilities sector. An estimated 10,000 farm owners employ 35,000 workers. At face value, dairying makes the Government look good because of its contribution to growing the economy. But there’s a dark side to the green hills and docile cows grazing in the paddock.
NZ has one of the world’s lowest dairy cost models because of our lax labour and environmental laws, meaning we’re not paying the full price for our milk. The financial incentive of artificially high returns has encouraged the massive intensification and conversion to dairy farming across the country. It’s a capital intensive process that has led to a tripling of dairy farm debt over the last decade, to a current level of $32 billion. The Reserve Bank warns that high farm debt is a threat to the country’s financial stability.
Big farming is now an industry for investors, where shareholders are at arms’ length from the land, and bank on increasing profits at the cost of clean water and animal welfare. National is the party of farmers and there would be fewer profits for farmers and investors (including National MPs) if environmental and social externalities were addressed!
We all know the environmental footprint of dairying is huge, especially as intensification and conversion increase. More than 283,700 ha of land were converted to dairy farms between 1996-2008, with more since, and more still to come. That’s led to deforestation, sedimentation and habitat loss. We’ve got more than 6 million dairy cows producing 48% of New Zealand’s total Greenhouse Gas Emissions. As herd size has grown, so have pollution loadings.
These days pastoral farming is the ‘overwhelming source of pollution’ in rivers and streams.
Between 1992 and 2002 the number of cows in the Waikato grew 37%, and nitrogen in steams increased 40%. The mean herd size in Canterbury where significant intensification has occurred, is now 710 cows. This has led to a tripling of irrigation and water demand and subsequent calls for subsidised irrigation schemes.
The National Party has always represented the interests of farming. But Amy Adam’s farm ownership in the Central Plains Water supply area, Judith Collins’ links to the dairy industry, Party President Peter Goodfellow’s massive farming interests in the Waikato, and the shareholdings of John Key and other current and ex-MPs in farming investments, show the National Party have more interests in a profitable dairy sector than most. We shouldn’t expect changes to environmental policy soon.