What needs to change on dairy farms?

Q. What are the three most important/effective things that have to change on dairy farms to improve water quality?

Determining impacts from land use is complex and there is no easy solution to instantly improve freshwater quality. Intensification of dairy land has been the biggest threat to freshwater in New Zealand. Therefore, farming like we were before large scale intensification occurred is a starting point. This could be started by:

  1. Lowering stocking rates – if there are fewer cows on the land, less nitrogen in cow urine will leach through the soil and end up in waterways. Nitrogen is one of the major forms of pollution from dairy farms. Find out more about the effects of nitrogen in freshwater.
  2. Reduce inputs used in production – particularly imported products. Outside inputs, such as brought-in feed, fertiliser and irrigation, allow more cows to be put on the land and production to increase.  Farms with fewer inputs are likely to have lower environmental impacts. Imported products (products that come from outside the country) may be worse as we have no control over environmental effects and regulations in other countries – and we may not even know the effects of production (which may be worse than products produced in New Zealand).
  3. Measure farms on efficiency, not productivity. Instead of measuring farms by how much milk they can produce, regardless of the inputs used, farms should be measured by how efficient they are in terms of production vs. environmental impacts. If a farmers production is high with low environmental impacts, their milk or land could be worth more. See the graph below for a basic representation of production vs. environmental effects and costs.

Sweet zone of business operation

As inputs increase, environmental effects and costs increase exponentially. However, profit and productivity start to decline alongside this, as the ‘sweet zone’ is passed. The ‘sweet zone’ represents the ideal business-operating zone.

These measures are just a start in order to continue dairy farming. Doing these things does not mean that farmers will lose money; on the contrary many farmers may be better off.  However, much more is needed to ensure farms are more sustainable and increase biodiversity.

Other things that could be introduced in policy and regulation to control the environmental effects of farming include [1] :

  1. A capital gains tax – because capital gains are driving the intensification of farming, and the rise in value of the land.
  2. A price on nitrogen loss – this would mean determining a nitrogen limit in each catchment and measuring nitrogen loss from land. Farmers would have to buy permits for their nitrogen loss and these permits could be traded within a catchment as long as the total nitrogen loss did not go past ecosystem limits. In this way, production could be maximised, while the loss of nitrogen to the environment is minimised. Cap and trade management operates in the Lake Taupo catchment and in the Rotorua lakes.
  3. A cap on dairying. We have already gone too far, but at least we could stop further expansion of dairy farms now.

Nitrogen limit


[1] Joy, M. (2014). Cool, clear water. In Beyond the Free Market: Rebuilding a just society for New Zealand. Editors: David Cooke, Claire Hill, Pat Baskett and Ruth Irwin.

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