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Maximising profit and environmental protection on farms

Maximising profit and environmental protection on NZ pastoral farms

Wednesday 3 June 2015

Agricultural growth agendas are currently based on the idea that more production, at any cost, is the best strategy for higher national GDP. But, it is unclear how these agendas will be fulfilled, given tightening water quality limits and the pressing need to account for greenhouse gas emissions.

Alison Dewes (Headlands Consultancy) says that the combination of volatile economic conditions and enforceable environmental limits will force farmers to reconfigure their farm systems. Farmers will have to demonstrate efficient resource use, minimal environmental effects and robust economic performance to ensure New Zealand’s agriculture sector can thrive and stay ahead of the game.

She will speak to a paper co-authored by herself, as well as Russell Death (Institute of Agriculture and Environment, Massey University), and Andrew Day, a sheep, beef and dairy support farmer.

She says that New Zealand farming is under increasing public scrutiny because of the adverse environmental impacts on the health of lakes and rivers and that several industry-initiated voluntary initiatives to reduce environmental impacts have failed to halt the decline.

"Farmers will need to more radically reconfigure their approaches and farming systems to reduce the loss of nutrient, sediment and pathogens.

"Ironically, this change can occur while maintaining or improving farm profit," Alison Dewes suggests.

To date most studies of mitigation strategies for farmers have only considered single actions. However, although there is a widespread notion that environmental constraints mean less profit, this does not have to be the case.

"Resilience is the key to any profitable business, as it relates to dairy farming, this includes provision for unexpected events, accounting for volatility in feed availability, costs, milk price and climate. Dewes (2014) found more intensive dairy systems carry more cow bodyweight per hectare, are more dependent on bought-in feed, and can perform comparatively strongly in years of high milk prices.

"However such systems are more vulnerable with increased environmental risk, and the need for more advanced mitigation strategies (e.g. herd home systems, stand-off pads, supplementary feeding and advanced effluent management systems).

"As a result they need higher capital investment, potentially increased debt and consequently compounding business risk," she points out.

Alison Dewes says there is an urgent need to quantify the environmental risk and environmental impacts from farming systems in New Zealand. "There is growing awareness that is necessary and reasonable to balance agricultural productivity with that basic Kiwi value of swimmable and fishable waterways.”

"Suppliers of food products are increasingly expected to demonstrate an understanding of the environmental and social attributes of their products. This should include the materials and energy used, potential human and ecological health impacts and product development."

Alison Dewes says there will need to be a reconfiguration of agricultural systems to achieve optimal profit, high resilience, and low impact systems.

ends

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