"As a nation, we cannot continue to have conversations about protecting water quality without having a parallel set of conversations that redefine the New Zealand farming business model.''
So says Taupo farmer and entrepreneur Mike Barton, who, when faced with what was effectively a cap on stock numbers, sought to increase the value of the product he produced.
A nitrogen cap was imposed on farmers around Lake Taupo to protect its water quality, with 35,000ha of land now covenanted for 999 years to remove 20% of manageable nitrogen.
In 2000, an incorporated society, Taupo Lake Care, was formed to represent farmers in negotiations with Environment Waikato. Farming emitted 93% of the manageable nitrogen entering the lake.
A guest speaker at the Innovation at Invermay field day, Mr Barton said it was not a dairy farming problem - there were previously 101 sheep, beef and deer farms in the catchment and four dairy farms.
Only 20% of the catchment had been farmed; the rest was in original vegetation or forest, yet there was still a problem with nitrogen.
It was not a fertiliser issue. It was a stock urine issue and so essentially it was a cap on stock.
Years were spent trying to find alternatives to shutting farms down and there was ''nothing on the science horizon''.
Mr Barton now has a consent to farm for 25 years. Applying for a consent that limited production in perpetuity had significant implications for farming business models and property values.
He was now capped at his 2004 production levels, while his costs had increased by 48% since then.
The Bartons changed their farming system and stopped breeding cows.
Mature animals were much less efficient at converting grass into protein and much more nitrogen came out in their urine. Instead, they brought in young weaners and grew them as fast as they could.
Since they could not grow any more beef per hectare, they had to grow the value of a static amount of beef.
Consumers did pay a premium for beef produced under a catchment management plan and there had been ''outstanding'' feedback from chefs and diners. Demand exceeded their ability to supply.
A business model needed to be built that returned a premium to farmers, he said.
He believed agricultural produce should start to be profiled from a water quality perspective.
Food had to be sold at a price that reflected its true cost of production and that included the environmental cost, he said.