We can go on subsidising the crippling pollution of the ag sector, argues Dave Hansford, or we could use that money instead to bring about urgently-needed change.
I live five kilometres from the small Aveyronnaise village of Coupiac, through which a small stream flows. I can stand on its banks any weekday and watch bullies, trout and other fish chase a myriad of pond skaters, water striders and mayfly larvae through its clear waters. I don’t want to portray French water bodies as somehow unsullied – overall, they’re in better shape than New Zealand’s, but they still have their problems – but they have an integrity both reflected and protected by the surrounding countryside. In this corner of the world, rolling cultivated downs nestle within hill tracts of oak and chestnut woodland that offer habitat to roe deer, foxes and badgers.
Around here, farmers have specialised in milking sheep for a niche product: high-quality, high-value Roquefort cheese, a delicious blue that directly and otherwise employs some 4,500 people on an estimated 2100 farms. The regulations around its production are tight: all ingredients must be sourced locally, especially the tiny bacterium that supports the entire industry, Penicillium roqueforti, which must be cultured in just one natural cave complex in Roquefort-sur-Soulzon. All processing must similarly happen within the district.
Roquefort sheep must be grazed outdoors as often as weather permits, but spend the rest of their time indoors on supplementary feed, which the farmers are required to grow themselves. That means much of the land use round here is cropping, on spreads the European Commission estimates average around 53 hectares. Sheep flocks average 150 to 200 animals, and – I kid you not – when a farmer calls from the gate, they go running to him. I’ve watched it.
If all this sounds like some bucolic, pastoral planet away from the intensified New Zealand broadacre, high input, thousand-cow dairy herd approach to farming, you can bet that it is. New Zealand has instead banked its fortunes on trying to be the world’s biggest and cheapest producer of a distinctly low-value and fiercely-contested global commodity – milk powder – the price of which dances precariously at the whim an online auction system.
Whipped to the gallop in this race to the bottom, New Zealand farmers have enslaved themselves to frightening debt levels in pursuit of ever-greater production. The Reserve Bank says Kiwi farmers are among the most debt-laden in the world – three times higher than their Australian brothers of the soil. Average per-dairy farm debt has almost tripled in the last decade, to the point where New Zealand’s dairy sector alone owes some $30.5 billion.
Here in Aveyron, everyone accepts that Roquefort doesn’t always pay its way, so farmers are paid to sustain their benign land use practices. Under the contentious European Union (EU) Common Agricultural Policy (CAP), smallholders here receive an average of €208 (NZ$ 335) a year per hectare (and set to get more, after Francois Hollande recently promised to smooth out huge historical inequities that saw large-scale cereal croppers cream more than their share of subsidies).
The CAP has been the prime target of trade ministries, free-marketeers and even environmentalists since its inception in 1962, but Brussels has doggedly stuck with it, regularly drafting reforms aimed at solving inevitable imbalances and unintended consequences.
Subsidies, of course, are a dirty word in New Zealand. Kiwi farmers will proudly insist that they’ve successfully stood on their own two feet since they were abruptly cut adrift in 1984, when the repeal of subsidies here saw farmers promptly lose up to 40 per cent of their income. Internationally, free trade think tanks like to hold our farmers up as the poster boys of market reform. But few make mention of the crippling environmental cost those reforms have brought, the astronomical debt levels, and doubtless none will concede that in fact, the New Zealand taxpayer still spends a fortune supporting the industry and profits of the country’s producers in a variety of ways.
We could begin with the greatest rort of all: that Fonterra has successfully convinced New Zealand consumers that they must pay the going global rate for locally-produced dairy products, so that a working mother in Hamilton pays the same – and suffers the same spikes and hikes – as a businessman in Beijing. But let’s talk instead about all that polluted fresh water: to date, the Government has committed just under $14m to try to rehabilitate such fouled reaches as Lake Ellesmere, and the notorious Manawatu, found by the Cawthron Institute to be the filthiest river in the western world.
The bid to try and stem nutrient pollution of Lake Taupo was projected to cost at least $80m, but has needed extra funding. The Waikato River has so far had $210m of taxpayer money directed at its rehabilitation. The Rotorua Lakes cleanup will cost at least the same. Al these projects are funded by some mix of central and local Government funding. All up, according to Environment Minister Amy Adams, New Zealanders have already had more than $450m of their tax bill committed to cleaning up their own lakes and rivers after farmers have finished with them. That, in any language, is a subsidy.
Then there’s the successful bid by New Zealand farmers to avoid paying for their share of air pollution under the Emissions Trading Scheme, from which they have been serially exempted, most lately until 2014. Agriculture is directly responsible for nearly half of all our greenhouse gas emissions – which, if we can’t reduce them, will cost us under deals we’ve variously committed to (and more recently, reneged on, but may well rejoin).
But while farming produces by far the lion’s share of climate-changing pollution, farmers have convinced successive governments that they cannot afford to pay for it, as the Emissions Trading Scheme requires them to. Instead, we’ve seen the more benign forestry and energy sectors get nailed. Meanwhile, the rest of the eventual bill for all those greenhouse gases has been pushed again to the taxpayer – ironically, the same taxpayer that farmers turn to when climate change bites down, seeking emergency drought relief.
Earlier this year, the Government announced a $400m seeding fund – the Irrigation Acceleration Fund – to help farmers water a further 420,000 hectares of land. Much of that irrigation is tipped for Canterbury where, this month, the region’s medical officer of health, Alistair Humphrey, reported that nitrate levels in a third of tested Canterbury groundwater supplies were already so high they posed a risk to infant health.
We shouldn’t be surprised that farmers keep externalising their costs – depleted and polluted water, climate emissions and eroded soils – onto consumers and taxpayers: most businesses do. But can we at least be honest about the fact that all these programmes – along with the vast-scale appropriation of fresh water that actually, the public was using for its own enjoyment, thank you – represent state support for farmers? In other words, subsidies. The semantics we’ve heard from Federated Farmers and Fonterra over the years have successfully obfuscated this obvious truth, but we badly need to revert to plain, honest language before we can have the next vitally important conversation.
First; let’s acknowledge that if farmers continue to insist that they cannot afford to pay for the costs of their own environmental damage, they are ipso facto admitting that their businesses are neither environmentally nor truly economically sustainable – a point freshwater campaigner Mike Joy has repeatedly made. So, in truth, farmers are not standing on their own two feet, but leaning heavily against us, the taxpayers. That gives us moral representation around the boardroom table. Nobody wants to put farmers out of business, but we’re entitled to a say in what happens next.
Second, given that we’re subsidising farmers anyway, shouldn’t we just put the Friesian before the cart? In other words, seriously consider a version of the European CAP system which, detractors frequently prefer to forget, is in large part conceived to encourage environmental sustainability (it also seeks to encourage diversification and local employment, but those are whole other stories of direct relevance to New Zealand).
It has been repeatedly shown that it’s far cheaper to pay farmers upfront to adopt more environmentally sustainable business models and practices, than it is to clean up after them. By one estimate, it would cost $6000 to stop a tonne of nitrogen and/or phosphorus entering Lake Rotorua. It costs around $240,000 to try to get it out. That’s a lot of cash we could instead be using to promote change for the good, while liberating farmers from the intensification treadmill. We could call such payments anything we like: after all, we’ve come all this way without using the “s” word. Let’s call them incentives, so that we don’t run foul of the World Trade Organisation. Lets administer the payments through the Sustainable Farming Fund, which would need better resourcing to cope with all the demands of monitoring, compliance and diligence.
Let’s stop farmers blocking regional councils’ attempts to enforce water quality limits and nutrient caps. Let’s back incentives with tougher legislation to deal with premeditated polluters. Let’s develop a rigorous, standardised water quality assessment and monitoring regime, so that all farmers are bound by the same rules, and all governance is informed by the same values and thresholds. In other words, National Environmental Standards.
Meanwhile, let’s enforce water pricing, and levies for the demand management and allocation of water. And finally, should some farmers resist all overtures to clean up their act before the fact of pollution, can we please start charging them directly for the costs of cleaning up after it? It’s called polluter pays.
And then let’s have the really tough conversation: is a low-value, mass-market business model really the best we can do? Are cheap, anonymous, industrial commodities our finest work? And are they worth the hidden cost to farmers, taxpayers and the environment?
Subsidies might be a dirty word at the WTO, but here in France, they’re targeted and administered with a view to promoting diversification, and supporting high-value, environmentally-responsible enterprises. The neoliberals hate them, but I bet the trout would have a different view…
Dave Hansford
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