Cross-Examination: Is Dairy Farming a Dud?

By Ashley Wainstein

New Zealand is well known for its lush landscapes and green pastures, promoting a clean environment and unsoiled vista. As a nation, we are predominantly rural and our economic wellbeing has historically been founded upon maintaining a high level of exports in the dairy farming industry. The New Zealand dairy farming industry remains our biggest exporter to date and rakes in an estimated $11.6 billion in revenues according to 2014 data[1]. However, despite the country’s favourable impression and lucrative business, the reality proves that our clean, green image is a fallacy.

Dairy Farming: The Damage

Recent studies have found that the cost of externalities caused by dairy farming is largely underestimated and in fact outweigh the net revenue the industry produces by an approximate $4 billion per annum.[2] In the unrestrained pursuit of profits, there is very little guarded regulation and the resultant costs, which are referred to as externalities, are not being accounted for. The cause behind this non-interference is likely the belief that New Zealand is too heavily reliant on the dairy industry to risk interfering with its production. Furthermore, those benefitting from exploiting our lands are not about to make the change necessary.

This being said, New Zealand law has in fact enacted some protection over our land and waterways.[3] However, the strength of commercial interests and the law that backs them often trump this legislation, rendering them in the majority of cases, redundant. The Resource Management Act 1991[4] (RMA) is the central piece of legislation enacted to address the effects on the environment of economic operation, including dairy farming. Under the RMA, councils are to manage the effects of dairy farming on natural resources, including pollution, discharges, and the depletion and/or deterioration of natural resources. However, the plans enacted do not do anything to eliminate or deter the consequent waste, they only serve to manage the issue of pollution so that it is not explicitly visible or impeding on business.

In 2015, it was measured that well over five million cows were being milked, which illustrates an increase of 1.9% over the previous year, and the first year whereby the number has surpassed five million.[5] One cow is estimated to excrete faecal bacteria equivalent to that of about 14 people, equalling nationwide values of over 90 million people. The result: approximately half of New Zealands lakes and around 90% of lowland rivers are clasified as polluted.[6] With high levels of production and an emphasis on satisfying this delusory, insatiable demand, there is arguably no viable way of managing such inevitable waste and pollution.

In recent years, some local body efforts have been made to combat the issue of pollution caused by dairy farming. In 2014, Environment Southland made it a mandatory requirement that owners of all new dairy farms in Southland have to apply for a resource consent before they are able to become operational.[7] The impetus behind this resolution was in an effort to save Southland’s water quality from declining any further. However, this may be criticised as simply dressing the issue and adding greater expense to local farmers. Once the consent is issued, there is essentially free reign.

Big Business

Under current arrangements, the state promotes the freeflow of capital and provokes competition by reducing intervention. New Zealand holds the position of the largest exporter of dairy products globally.[8] This is due to legislation being passed in 2001 to liberalise exports, with the aim of making New Zealand more competitive on the world market. The New Zealand Dairy Board merged with the New Zealand Dairy Group and Kiwi Cooperative Dairies, previously the two largest in New Zealand, and formed Fonterra Co-operative Group.[9] An example of where big business is ahead of sustainable practice is that Fonterra currently still uses palm kernel expeller, which increases toxicity to mineral soils and the composition of biomass. The use of palm oil products not only adversely disturbs national land, it propagates the cultivation of forests with palm oil, which leads to species habitat loss, species death and greenhouse gas emissions. There is an obvious stratification of interests here, that primarily serves those who are financially viable and marginalises those that are environmentally compassionate. Nothing is being done about the immense use of this toxic product even though its effects breach a number of environmental laws; laws which are conveniently classed subordinate to commercial legislation.

Nathan Guy, Minister for Primary Industries, is currently behind a number of irrigation schemes in order to grow more grass to feed the increasing herds of cows.[10] This is in an effort to produce greater amounts of low value milk powder to export offshore. The governments role in this project is the financing and management of these schemes, which degrade our land, pollute our rivers and increases our climate emissions. A great portion of tax payer money goes into subsidising the costs for industrial dairying and this is one of the current examples. Just recently, the Court of Appeal has has found that the Director-General of Conservation was not entitled to revoke the special conservation status of Ruahine Forest Park land to make way for the irrigation plans.[11] However, the status of the plans have not been dropped and are still in their fourth execution phase, with the potential to irrigate an extra 20,000 hectares of land in the Ruataniwha Basin in Central Hawkes Bay, in addition to the 6000 hectares already irrigated.[12] This will result in devastating affects to the surrounding land and waterways and encourage even poorer management of the environment.

The dairy farming sector can be likened to that of the global financial crisis, in that profits for a few are leaving debts for generations down the line to carry. There is a significant failure of regulatory government and the rise in land conversions for dairying is heightening this tension. While rules and guidelines have emerged more recently, they are insufficient to properly negate the increasing degradation of the environment. While a permit may be required to operate, once granted, this essentially gives farmers the right to contaminate and deplete our natural resources at no cost or accountability.[13]

Pollution is an inevitable byproduct of the agriculture industry, especially one constantly pushing for higher production levels at an ever-increasing pace. On an international scale, the agriculture industry is responsible for 51% of all worldwide greenhouse gas emissions and is the leading cause of species extinction, ocean deadzones, water pollution and habitat destruction.[14] Livestock is also responsible for 65% of all human related emissions of nitrous oxide, a greenhouse gas with 296 times the global warming potential of CO².[15] With livestock numbers increasing, production expanding, and no real safeguards put in place, the clean and green New Zealand that we all envisage will be no longer.

This begets the question, where to from here? In the past decade, dairy production has undergone an austere change. From a low cost, low input and low impact system to a high cost, high intensity, high impact system that is heavily reliant on imported feed and fertiliser that harms and toxically degrades our soils and waterways. It is posited by scholars that these external costs are not borne by the industry, but rather, the society. This implies an alternative to dairy farming that is better in tune with preserving our natural environment and abiding with environmental laws. What is certain is that in order for New Zealand to ensure a clean, green image, processes need to change and innovation needs to be met with resilience in order to pave a more sustainable future.

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 [1] “Global New Zealand—Internation trade, investment, and travel profile: Year ended June 2014” (17 November 2014) Statistics New Zealand <>.[2] K Foote, Joy M and Death R “NZ Dairy Farming – Milking Our Environment for All Its Worth” Environment Management (New Zealand, April 2015) at 1.[3] Resource Management Act 1991.[4] Resource Management Act 1991.[5] “New Zealand Dairy Statistics” (6 November 2015) LIC New Zealand <>.[6] Joy M “The Dying Myth of a Clean, Green Aotearoa” The New Zealand Herald (online ed, Auckland, 25 April 2011).[7] Bridget Railton “Resource consent required for dairy” (6 March 2014) Stuff <>.[8] Above, n 4.[9] Hugh Stringleman and Frank Scrimgeour “Dairying and dairy products – Dairy exports” (accessed 15 September 2016) Te Ara – the Encyclopedia of New Zealand <>.[10] Gareth Morgan and Geoff Simmons “Dairy doing dirty on our environment” (15 January 2014) <>.[11] Greenpeace “Ruataniwha Dam plan dead in the dirty water?” (press release, 31 August 2016).[12] Irrigation New Zealand “Ruataniwha Water Storage Project” (2016) Irrigation New Zealand <>.[13] Above, n 8.[14] Cowspiracy “The Facts” (2014) <>.[15] Above, n 12.