New Zealand’s dairy clean up could cost billions

The cost of cleaning up after decades of dairy expansion in New Zealand could exceed the value of the country’s dairy exports, according to a new paper on the topic.

The New Zealand Dairy Farming: Milking Our Environment for All its Worth paper focuses on four issues: removing nitrates from drinking water (potential cost of repair $10.7bn); soil compaction ($611 million); greenhouse gas emissions ($3.1bn) and clean, green image ($569m).

It says that over the past two decades there have been major increases in dairy production in New Zealand and this increase in intensity has required increased use of external inputs, in particular fertiliser, feed, and water.

Intensified dairy farming thus incurs considerable environmental externalities: impacts that are not paid for directly by the dairy farmer.

These externalities are left for the wider New Zealand populace to deal with, both economically and environmentally, it says.

“This is counter-intuitive given the dairy industry itself relies on a ‘clean green’ image to maximize returns.”

It says that this is the first nationwide assessment of some of the environmental costs of the recent increase of dairy intensification in New Zealand.

It goes on to say that for the dairy industry to accurately report on its profitability and maintain its sustainable marketing label, these external costs should be reported.

Co-author Dr Mike Joy of Massey University said the environmental costs of dairy farming “at the higher end” exceeded the export value of dairy for 2012 of $11.6bn.

“We are saying these are the costs of cleaning up water to drinking standard, but that is conservative because humans are much more tolerant than other forms of life. But at certain levels of nitrates below what humans can tolerate, a lot of freshwater fauna is dead,” he said.

However, industry groups and farming organisations have said the paper is merely “pretending a student’s academic hypothesis is established fact”.