Part 2: The framework and context for managing freshwater quality

Managing freshwater quality: Challenges for regional councils.

2.1
In this Part, we:

Freshwater quality

2.2
The quality of the water in our lakes, rivers, and streams is good overall and rates well internationally, but some aspects have been deteriorating in lowland, pastoral, and urban areas.3

2.3
In the past, it was common practice to discharge contaminants such as factory waste and treated sewage directly into waterways. This had effects on the quality of freshwater and the associated ecosystems. Generally, these point source discharges are being phased out, or the level of contamination in them has been reduced because regional councils set quality controls on the discharges and monitor compliance with those controls.

2.4
Although much has been done to improve some point source discharges during the last 20 years, a corresponding improvement in freshwater quality has not always been seen. At the same time as point source discharges were improved, there was an intensification of agricultural land use in some areas. This included conversion of land previously used for crops or sheep or beef farming to dairy farming, and an increase in the number of dairy cows on farms.

2.5
Figure 3 shows various sources of freshwater pollution, including point source discharge (for example, from a wastewater treatment plant) and non-point source discharges from:

  • surface run-off of nutrients, chemical pollutants, and bacteria from rural and urban land areas to waterways;
  • farm animals in waterways; and
  • contaminants leaching through soil into groundwater from livestock farming, septic tanks, and agricultural crops.

Figure 3
Sources of freshwater pollution

Figure 3: Sources of freshwater pollution.

Source: Ministry for the Environment.

2.6
Monitoring data collected nationally and regionally show that non-point source discharges now exceed point source pollution, and that non-point source pollution from pastoral land use is now the main cause of water quality degradation. In July 2010, NIWA reported that:

Pastoral farming – which accounts for 40 percent of New Zealand's land area – is undoubtedly the main source of [non-point source] pollution. Evidence from [national] and catchment studies generally show a gradient in water quality from excellent in native forest, to good in plantation forest, to poor in pastoral and urban streams. Streams in dairy land are among the most polluted.

There is no doubt that our declining river water quality over the last 20 years is associated with intensification of pastoral farming and the conversion of drystock farmland to dairy farming, particularly in Waikato, Southland, and Canterbury. For example, between 1992 and 2002, the number of cows in Waikato increased by 37 percent; during the same period nitrogen levels in the region's streams increased by 40 percent and phosphorus levels went up by 25 percent.4

2.7
Given that non-point source discharges come from many sources, and it is the cumulative effects of these discharges that affect water quality, regional councils need to have a range of policy interventions that work together to minimise these cumulative effects.

2.8
Sediment entering waterways is another issue that regional councils need to manage. Sediment in waterways reduces water clarity, and (because nutrients are bound to soil particles) also contributes to the amount of nutrients entering waterways. Erosion of deforested hillsides, gullies, and riverbanks, and the presence of cattle in or near waterways, are leading causes of sediment entering waterways.

How freshwater quality is managed

The legislative framework for managing freshwater quality

2.9
The legal framework for managing freshwater quality is set out in the RMA and supported by the LGA. Regional councils have the main responsibility for managing freshwater quality but cannot do this alone. Central government, district and city councils, iwi, the primary production sector, environmental groups, and recreational water users all have an interest and a role to play in managing freshwater.

The Resource Management Act 1991

2.10
The role of regional councils under the RMA includes a number of specific functions in managing freshwater. These include controlling land use for the purpose of maintaining and enhancing water quality and ecosystems in water bodies, and controlling the discharge of contaminants into water or onto land.

2.11
In exercising their functions, powers, and duties under the RMA, regional councils must consider its purpose – to promote the sustainable management of natural and physical resources. Section 5 of the RMA says that sustainable management means:

… managing the use, development, and protection of natural and physical resources in a way, or at a rate, which enables people and communities to provide for their social, economic, and cultural well-being and for their health and safety while—

(a) sustaining the potential of natural and physical resources (excluding minerals) to meet the reasonably foreseeable needs of future generations; and

(b) safeguarding the life-supporting capacity of air, water, soil, and ecosystems; and

(c) avoiding, remedying, or mitigating any adverse effects on the environment.

2.12
The RMA is implemented through a planning framework that has roles for both local and central government. Figure 4 sets out the high-level planning framework for local and central government under the RMA. The RMA provides regional councils with a variety of tools to manage freshwater, including regional policy statements, regional plans, and resource consents.

Figure 4
The Resource Management Act's planning framework

Figure 4: The Resource Management Act's planning framework.

2.13
Appendix 3 sets out a more detailed discussion of the RMA and the framework for freshwater management.

The Local Government Act 2002

2.14
As local authorities, regional councils are also bound by the requirements of the LGA, which gives them the broad role of promoting the social, economic, environmental, and cultural well-being of their communities, taking a sustainable development approach. This approach is defined in the LGA, and requires local authorities to take into account:

  • the social, economic, and cultural well-being of people and communities;
  • the need to maintain and enhance the quality of the environment; and
  • the reasonably foreseeable needs of future generations.

Freshwater quality objectives

2.15
The sustainable development approach in the LGA and sustainable management purpose of the RMA both require local authorities to look to the future when exercising their functions and making decisions, and to consider the social, cultural and economic well-being of people and communities as well as the environment. Both Acts refer to maintaining and enhancing the environment or freshwater quality, as do many regional policy statements and plans.

2.16
In carrying out their responsibilities under the RMA and the LGA, regional councils must follow the appropriate statutory processes, which include consulting with their communities. The objectives that regional councils set to guide freshwater quality management will be influenced by what their community values.

The role of local government

2.17
As set out in Figure 4, regional councils must produce a regional policy statement and can produce a regional plan to help them manage freshwater quality. These planning documents set out the issues with freshwater quality in the region and specify policies, methods, and (in the regional plan) rules for managing freshwater quality.

2.18
In setting policy, regional councils must consult with their communities and draw on a range of scientific and planning knowledge to come up with programmes to manage freshwater quality at a level acceptable to their community. These programmes may be:

  • regulatory (usually regional rules and resource consent requirements); or
  • non-regulatory (which usually involve providing advice, education, or financial incentives).

2.19
Also, under the LGA, long-term plans and annual plans offer councils scope to set out actions, budgets, and time frames for delivering programmes to achieve freshwater quality objectives.

The role of central government

2.20
The RMA allows the Minister for the Environment to issue national policy statements to guide local authorities on matters of national significance. Until recently, there was no such guidance from central government on freshwater quality management, but the National Policy Statement for Freshwater Management (the National Policy Statement) came into effect on 1 July 2011.

2.21
The National Policy Statement is part of the Government's 2011 Fresh Start for Fresh Water package of reforms. The National Policy Statement requires all regional councils to make or change regional plans to set freshwater objectives and freshwater quality limits for all bodies of freshwater in their regions. The National Policy Statement is reasonably high level and might require more specific measures, such as technical methods for prescribing limits, to support its success.

2.22
National environmental standards are also set by central government and have the force of regulation. They can be used to set technical standards, methods, or requirements and can prohibit an activity, restrict the rules councils can make for an activity, or permit an activity.

2.23
There are currently four national environmental standards in effect, including one for the Sources of Human Drinking Water.5 This standard requires regional councils to consider the effects on drinking-water sources when deciding on relevant resource consents and setting regional plans.

The Land and Water Forum

2.24
The Government favours a collaborative approach to setting policy. The Land and Water Forum is a diverse group comprising primary sector representatives, environmental and recreational non-government organisations, some iwi, and other organisations with an interest in freshwater and land management. The Government invited the Land and Water Forum to recommend reform of New Zealand's freshwater management.

2.25
The Report of the Land and Water Forum: A Fresh Start for Freshwater was released in September 2010.6 It contains 53 recommendations. These include:

  • setting standards, limits, and targets for water quality;
  • making changes in governance arrangements for freshwater, including setting up a non-statutory National Land and Water Commission; and
  • making government appointments to regional councils or their committees.

2.26
The National Policy Statement implements some of the Land and Water Forum's recommendations. The Government issued a further response to the recommendations in September 2011. The response outlined an ongoing role for the Land and Water Forum in New Zealand's freshwater reforms.

The role of the primary production sector

2.27
As well as contributing to the collaborative process for policy development as part of the Land and Water Forum, the primary production sector recognises the need to address the sector's effect on the environment. The primary production organisations Fonterra7 and DairyNZ8 have each set targets for improving practice in the dairy sector to reduce the effects of non-point source discharge.

2.28
Fonterra acknowledges that one of the greatest challenges facing the dairy sector is the effect that leaching of nutrients and run-off of effluent can have on waterways. In 2003, the Dairying and Clean Streams Accord (the Accord)9 set targets to:

  • exclude 90% of dairy cows from waterways by 2012;
  • ensure that 90% of regular stock crossings over waterways are by bridge or culvert by 2012;
  • achieve 100% compliance with effluent discharge regulations by 2003;
  • ensure that all dairy farms have systems in place to manage nutrient inputs and outputs by 2007; and
  • protect 50% of regionally significant wetlands by 2005 and 90% by 2007.

2.29
Progress toward the Accord targets is shown in Figure 5.

Figure 5
Progress toward the Dairying and Clean Streams Accord targets, from 2007/08 to 2009/10

Figure 5: Progress toward the Dairying and Clean Streams Accord targets, from 2007/08 to 2009/10.

Source: Data provided by the Ministry of Agriculture and Forestry, from The Dairying and Clean Streams Accord: Snapshot of Progress 2009/10, page 3.

2.30
With the wetland protection component of the Accord, about two-thirds of regional councils have identified wetlands that need to be protected. The 2005 target for protecting wetlands has been met in two regions, and the 2007 target in one region.

2.31
Fonterra was disappointed with the figures for compliance with effluent discharge regulations. In August 2010, it began a programme to check every farm's dairy effluent systems as part of an annual farm assessment. Fonterra is working with farmers to help them comply. We discuss monitoring and compliance further in Part 5.

2.32
There has been criticism of the success of the Accord. Fish and Game New Zealand's concerns include that the Accord does not cover small streams where Fish and Game New Zealand considers some of the most significant effects on freshwater quality are seen, and that the Accord requires nutrient management budgets to be in place but not necessarily to be used.

2.33
As well as the Accord, Fonterra is also part of the Primary Sector Water Partnership,10 which set a target to manage 80% of nutrients applied to land nationally through quality-assured nutrient budgets and nutrient management plans by 2013.

2.34
DairyNZ has a Strategy for New Zealand Dairy Farming 2009/2020 that is underpinned by specific targets aimed at (among other matters) reducing the effect of dairy farming on freshwater quality. The targets include:

  • 90% of dairy farms implementing nutrient management plans that reduce their nutrient footprint by the end of 2012;
  • reducing effluent non-compliance to less than 15% by June 2011 and to less than 10% by June 2012, with no serious offences;
  • excluding dairy cows from 90% of streams, rivers, and lakes by June 2012; and
  • improving the public perception of dairying by 2015.

The role of farmers

2.35
As well as the steps taken by the primary production sector bodies, some farmers are investing in management practices that help reduce the effects of intensive farming activities and non-point source discharges on freshwater quality.

2.36
These practices include:

  • Fencing and planting river and stream banks – this prevents cattle from damaging stream and river banks (which causes erosion) and prevents effluent from entering water bodies directly from cattle when they stand in streams. Planting a strip alongside stream and river banks also offers shading (which is beneficial for native fish habitats because of lower water temperature) and reduces nutrient run-off and leaching through the soil from adjacent land (because the plants take up nutrients before they enter waterways).
  • Building bridges and culverts – this prevents river bank erosion and effluent entering water bodies while cattle cross streams and rivers.
  • Managing nutrient inputs and outputs – this involves considering all sources of nutrient inputs (such as fertiliser, dung and urine, and supplementary livestock feed) and nutrient outputs (for example, nutrients lost through erosion or taken off a farm in products). Implementing nutrient management planning helps farmers maximise the efficiency of nutrient use, which in turn avoids or minimises adverse environmental effects and increases overall production efficiency.
  • Engineering appropriately sized and sealed effluent storage ponds – effluent ponds are used to collect dairy effluent from milking sheds, herd homes, and feed pads. Stored effluent from these ponds can be applied to pastures as a nutrient source when soil conditions are suitable for applying more moisture. This practice is known as deferred irrigation. Deferred irrigation is instrumental in preventing surface run-off or direct drainage of effluent to waterways.

2.37
Many of the above interventions are beneficial to the farmer and the environment. Research has shown that one poorly timed application of dairy effluent to pastures when soils are too wet to take up the effluent can lead to significant quantities of nutrients entering freshwater. These losses from a single poorly timed effluent application to the land can be equivalent to up to 40% of the annual expected nitrogen loss and more than twice the annual expected phosphorus loss from grazed dairy pasture.11 Suitable pond storage and deferred irrigation can halt this adverse environmental effect and provide nutrients to the land when the pasture can use the water and nutrients in the effluent. This helps the environment and reduces farmers' costs.

Managing freshwater quality while contributing to the economy

2.38
Dairy farming makes a significant contribution to the economy. The dairy sector directly accounts for 2.8% of the nation's gross domestic product, which is about $5 billion.12 It also contributes indirectly through employment and is an important factor in regional economies. For example, in some rural areas as many as one in four jobs are in the dairy farming and processing sectors. Projections to 2020 suggest that the pastoral and related food industries will remain at the core of the New Zealand economy.

2.39
Freshwater is vital to our economic, social, and cultural well-being, but our water management is getting increased scrutiny from:

  • New Zealanders concerned at declining water quality;
  • tourists, and the pressure to maintain our international image to support our tourism sector, which is also a major contributor to our economy; and
  • overseas buyers of meat and dairy products driven by their customers' expectations that their suppliers follow good environmental practices.

2.40
There is tension between increasing the economic contribution of the primary production sector and maintaining our "clean green" image. The mix of people elected to regional councils can reflect the range of strongly held views in the community about this issue.

2.41
Much of the public debate about the effects of the dairy sector on freshwater quality centres on whether we can have clean water and a profitable dairy sector. We considered whether it was possible to have both.

2.42
The Best Practice Dairy Catchments Study13 selected five predominantly dairy farming catchments (located in Waikato, Taranaki, Canterbury, Southland, and the West Coast of the South Island), and identified and tested a range of management practices to minimise effects on freshwater quality.

2.43
The research indicated that implementing targeted best management practices is likely to deliver significant improvements in the environmental performance of dairy farms within the catchments. Improvement in catchment water quality has been observed, indicating significant success given the ongoing intensification of farming systems that has occurred during the project.

2.44
A 2006 study looked at dairy farming systems and the relationship between economic development and the environment. This study concluded that, within the specific context of the New Zealand dairy sector, "there are major practical and political problems in internalising all the environmental effects of dairying, and off-setting the consequences of intensification".14

2.45
We asked staff at each of the four regional councils for their views on whether it was possible to maintain freshwater quality while intensifying land use. Figure 6 shows that their responses reflected a range of views.

Figure 6
Regional council officers' views about feasibility of maintaining freshwater quality while intensifying land use

Hope is given by the dairy sector starting to take responsibility for its effects and central government setting stronger policy direction.

The costs of mitigating environmental effects through managing nutrient inputs could mean that it might not be economically viable to sustainably intensify land use.

The evidence for worsening water quality in areas of intensive land use is simply too great to believe that it can be offset by good management practice.

We are driving the land too hard.

Intensive farming creates a potential for there to be effects on water quality values. However, it is not a given. It is a case of understanding the soil-water interface and ensuring that the movement of contaminants does not overwhelm the assimilative capacity of the water systems they enter. There are parts of New Zealand where recent changes of land use to intensive dairy farming have been in advance of the ability to manage those interfaces, but that is not the situation universally.

Compared with where we were in the 1970s-1980s, both our water quality and our management interventions have improved, alongside the intensification of dairy farming.

There are limits to the total emissions that the dairy sector can make without affecting freshwater quality, but this does not need to limit productivity. The sector needs to become more efficient, and market-based instruments can drive this change.

Our work on how farms take up new technologies and change behaviour suggests that farmers and the sector do not have the same fundamental goals as the regional councils. We have, and will continue, to work closely with our rural sector groups, but we have to recognise that there always will be divergence in the priority placed on productivity and profitability versus longer-term sustainability and the environmental standards expected by the community. The reality is that the sector challenges regional councils in the Environment Court on proposed policies that have economic implications for the farming community.

We can't have our cake and eat it; we cannot continue to intensify land use without better managing nutrient losses.

Conclusion

2.46
Dairy farming is important for our economic well-being, but there are concerns about its effects on freshwater quality. Although some research and opinions support the view that we can maintain water quality at a level expected by communities while increasing the productivity of the agricultural sector, other research and opinions do not.

2.47
The diverse range of research conclusions and opinions held by those responsible for managing this challenging issue reflect the different physical characteristics of the environments that the regional councils are operating in. In our view, the economic viability of farming sustainably while protecting ecosystems and allowing communities to enjoy freshwater recreational activities is more achievable in some parts of the country than in others.

3: Ministry for the Environment (2007), Environment New Zealand 2007, page 261 (available at www.mfe.govt.nz).

4: National Institute of Water and Atmospheric Research Limited (July 2010), How clean are our rivers?

5: Resource Management (National Environmental Standards for Sources of Human Drinking Water) Regulations 2007, which is available on the Ministry for the Environment's website (www.mfe.govt.nz).

6: The report is available at www.landandwater.org.nz.

7: Fonterra is a New Zealand based co-operative company owned by 11,000 farmer shareholders and is the world's leading exporter of dairy products. It is responsible for collecting milk from farmers and producing most of the dairy products made in New Zealand.

8: DairyNZ, an "industry good organisation" with an annual budget of about $78 million derived from a levy on milk solids and government investment, has a purpose to secure and enhance the profitability, sustainability, and competitiveness of New Zealand dairy farming. Sustainability is one of three investment areas for DairyNZ.

9: The Dairying and Clean Streams Accord, signed in 2003 by Fonterra, regional councils, the Ministry for the Environment, and the Ministry of Agriculture and Forestry set targets for reducing the effect of dairy farming on freshwater quality.

10: The Primary Sector Water Partnership is made up of Fonterra, DairyNZ, the Foundation for Arable Research, HortNZ, Meat and Wool NZ, New Zealand Forest Owners Association, NZ Farm Forestry Association, Irrigation New Zealand, Fertiliser Manufacturers Research Association, and Federated Farmers. The group aims to work in partnership with central and local government to ensure the sustainable use of freshwater resources in the primary sector.

11: Section 42A report of Dr David John Houlbrooke on behalf of Horizons Regional Council, page 17.

12: New Zealand Institute of Economic Research (December 2010), Report to Fonterra and DairyNZ, which is available on www.fonterra.com.

13: AgResearch (June 2009), Best Practice Dairy Catchments Study.

14: Jay, M. and Morad, M. (2006), "Crying over spilt milk: A critical assessment of the Ecological Modernisation of New Zealand's Dairy Industry", Society and Natural Resources, Vol. 20, No. 5.

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