Increased research and innovation in farming systems will be
needed to achieve compliance with environmental regulations
while maintaining farmers' profitability, a report from
Rabobank has warned.
While regulation was essential to protect the environment,
the report showed it had implications for international
competitiveness in agriculture, Rabobank New Zealand chief
executive Ben Russell said.
Increasing environmental regulations were a challenge for
agricultural exporters around the world, impacting
competitiveness by increasing costs and restraining
The report examined the regulatory approaches taken to
protect the environment in New Zealand, California and the
Netherlands and the impact on their respective dairy
For New Zealand, where regional councils were at varying
stages in the regulatory process relating to water quality
under the National Policy Statement for Freshwater
Management, the full impact on agricultural production and
competitiveness was yet to be quantified, Mr Russell said.
However, it was clear that environmental regulation affecting
agriculture in New Zealand was at an earlier stage and the
costs of compliance had yet to be fully built into the cost
structure of the country's dairy industry.
More research and innovation about how to retain and use
nutrients within farming systems in cost-effective ways was
essential for New Zealand to maintain its competitiveness, he
Hayley Moynihan, Rabobank director of dairy research, New
Zealand and Asia, said the New Zealand approach to
environmental regulation brought both challenges and
opportunities for dairy farmers.
The effects-based model being implemented could create
''considerable uncertainty'' for producers because they were
unsure exactly what changes needed to be made to meet
''The great opportunity, though, is that controlling effects
rather than inputs creates incentives for innovation. Farmers
... have the opportunity to determine the most efficient,
cost-effective means of meeting or exceeding requirements,''