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DairyNZ claim of economic ruin "misleading"

DairyNZ claim of economic ruin if we stop polluting "misleading"


New research from independent economic consultancy NZIER shows that DairyNZ's economic analysis and conclusion are misleading New Zealanders.

DairyNZ's economic analysis resulted in them claiming that GDP will lower by 1.1 per cent in 2050 because of the Government's freshwater reform proposals.

NZIER concluded DairyNZ's modelling of the impact of the Government's proposed freshwater reform package represents the "worst-case depiction that may exaggerate the impact."

"Under DairyNZ's modelling; the New Zealand economy will grow at 2.06 per cent each year on average accounting for the 'worst-case' impact of the Government's freshwater reform proposals, compared with 2.10 per cent under the business as usual scenario - a difference of just 0.04 per cent," Fish & Game New Zealand Chief Executive Martin Taylor says.

"DairyNZ then added up this 0.04 per cent over the next 30 years, which leads them to claim the proposals will see New Zealand's GDP lower by 1.1 per cent ($6 billion)."

"Put another way, their economic modelling shows that the New Zealand economy will be 192 per cent larger than today’s with the Government's action for healthy waterways package. This means that New Zealand's economy will grow from $242 billion to $466 billion by 2050 - an increase of $223 billion - meanwhile the environment will have been protected so future Kiwis can continue to swim, fish and gather food from their rivers, lakes and streams."

As the NZIER critique of DairyNZ's modelling noted, their negative conclusion assumes that dairy farms always stay as dairy farms and that land that is taken out of dairy production is not offset through a land-use change. The modelling also assumes there to be limited innovation in farm management practices.

"This has no basis in reality, as any good farmer would offset land retired from intensive dairy farming with trees, crops or other less nitrate intensive land uses.

"Despite the model representing a 30-year time frame, any modelling assuming there to be no improvement in technology or farm management practices is unbelievable - considering DairyNZ in all their submissions and public comments on the Zero Carbon Bill assume new technology and farm management practices are coming."

The DairyNZ reports confirm research previously undertaken by NZIER for Fish & Game New Zealand "that due to the relatively small size of the dairy industry, the impacts of the government reforms are unlikely to be major at the national level, and not felt for many years due to the long lead in times proposed."

These reports are backed up by new research from the Environmental Protection Trust that show that intensive agriculture leadership groups are scaremongering and causing confusion about the proposed dissolved inorganic nitrogen (DIN) bottom-line of 1.0 mg/L, as well as the extent of reductions in nitrogen loss it would require.

Research by Dr Adam Canning shows that, after giving effect to the existing 2017 National Policy Statement for Freshwater requirements to manage DIN for periphyton, only nine per cent of dairy farms (by area) are in catchments that exceed the proposed DIN bottom-line.

"Unlike some groups, Fish & Game New Zealand believes that bottom lines on water pollution need to be science-led."

The science shows that only a tiny fraction of dairy (one per cent by area) is estimated to occur in catchments that likely exceed the proposed DIN bottom-line by more than 60 per cent.

Despite claims, approximately only 10 per cent of rivers, by length (outside conservation land), exceed the proposed DIN bottom-line.

"What the Government is proposing is just common sense and long overdue - it reflects what New Zealanders have been saying for some time: that polluted waterways are one of their biggest worries."

Colmar Brunton research in August showed three quarters - 77 per cent - of those surveyed said they were extremely or very concerned about the pollution of lakes and rivers.

"Many good farmers have been getting on and improving their practices - the Government's plan will just ensure all farmers embrace sustainable farming, and that will be good for them, for the environment and for all New Zealanders."

The NZIER report can be found here

The Environmental Protection Trust research can be found here

Read the Colmar Brunton research here

The September 2019 NZIER report concluding "that due to the relatively small size of the dairy industry, the impacts of the government reforms are unlikely to be major at the national level, and not felt for many years due to the long lead in times proposed" can be found here


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