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The seven year research programme will compare side-by-side dairy farms to assess the environmental impacts of their practices.
One 286-hectare farm will use regenerative farming practices while the adjacent 330-hectare farm will use conventional methods.
Both farms will have a stocking rate of 3.2 cows per hectare.
The regenerative farm will use a more diverse pasture species, will have a longer rotation length and will use natural fertilisers over synthetic ones.
The government has committed $8 million through the Ministry for Primary Industries' Sustainable Food and Fibre Futures fund, to the $11.58 million project with Ngāi Tahu Farming and Ngāi Tūāhuriri fronting the rest.
Named Te Whenua Hou Te Whenua Whitiora, The New Land, The New Horizon, the study will also assess the impacts of regenerative agriculture approaches on farm workers. This will be monitored through a range of metrics including worker well-being, engagement, sleep and fatigue, and task diversity and productivity.
Te Whenua Hou Te Whenua Whitiora was officially launched by Minister of Agriculture Damien O'Connor at Ngāi Tahu Farming's north Canterbury operation at Te Whenua Hou today.
Ngāi Tahu Farming's representative Barry Bragg said scientific research on regenerative farming at a whole-farm scale has been lacking in the sector.
"This additional government funding marks a milestone for us as we can now speed up our mahi towards demonstrating the value of agricultural systems that work with the environment, not against it."
Ngāi Tahu Farming General Manager Will Burrett said the teams were looking forward to applying the knowledge and experience gained from previous regenerative farming trials to this much larger programme.
"We look forward to assessing the scientific and financial results we achieve through Te Whenua Hou Te Whenua Whitiora to help us inform a viable alternative farming system that enhances soil health, has a lower environmental footprint, reduces water use, promotes kaimahi wellbeing and is financially profitable, all while complementing mātauranga Māori."
Damien O'Connor said because the trial was being run at a whole-farm scale, it would provide especially useful information for farms of a similar size.
"Consumers in markets such as the United States pay high premiums for food produced through regenerative systems. We believe our exporters can capture opportunity in this, provided there's an evidence base for it - hence our investments like this one."