The impact of possible changes to nitrogen loss regulations on the financial viability of dairy farms in the Upper Manawatu River catchment

Abstract

The Manawatū-Wanganui Regional Council regional plan (the One Plan) regulates the use of natural resources in the Region and includes a table of nitrogen leaching maxima reflecting the natural capital of soils in the Region and based on Overseer® results from 2007. Dairy farms applying for controlled consents for intensive land-use activities in the Region need to comply with these maxima. However, the maxima in the Table have not been adjusted as new versions of Overseer® have been introduced since the table was produced.
This study compares the impact on representative dairy farms of complying with the original figures in the table with results from a revised table that takes into account more recent versions of Overseer®. Cluster analysis was used to select five representative farms in the Tararua District and their farm systems were modified to comply with both the original and the revised table.
The current version of Overseer® was used to model the farm outputs based on the original table of leaching maxima. Compared with the baseline farm results, nitrogen losses were reduced by over 50% and milk production by 40%. When the same comparison was undertaken with the table of revised maxima, the nitrogen losses were expected to reduce by almost 40% and milk production by 5%. Applying the original nitrogen leaching maxima to the five representative farms resulted in about two thirds of farms within the catchment being unable to pay the interest on their debts. The revised nitrogen leaching maxima reduced this to <10%.
The nitrogen leaching maxima in the One Plan should be revised to: better reflect the changes in the science underpinning current versions of Overseer®; achieve the nitrogen reduction targets in the region; and minimise the impact of the One Plan policies and rules on the financial viability of existing dairy farms.