Improving Environmental Impacts of Farming

In 2013, Rabobank produced a book entitled “The Future of Farming: The Rise of the Rural Entrepreneur”. In 2014, a new publication is being produced, looking at one of the areas covered in the 2013 book, namely sustainability. The report will cover New Zealand freshwater regulations, and their potential impacts on farmers and New Zealand agriculture. It will also look at the potential opportunities for improved environmental sustainability and financial profitability.

Vaughan and Megan Templeton farm a 425ha property east of Riverton in Southland. Vaughan is the fourth generation Templeton to farm the property, and both he and Megan incorporate the concept of sustainability (in its broadest sense) into their farm business approach.

In 2013, a selection of 50 leading farmers from around the world representing emerging, developing and developed countries was invited to a Global Farmers Master Class in the Netherlands to discuss the future of farming. The resulting discussions were the genesis for the book “The Future of Farming: The Rise of the Rural Entrepreneur”. It covered a number of areas based on the need to feed a growing world population, which is forecast to grow from 7 billion (currently) to over 9 billion by 2050. Already 870 million people are chronically underfed. In order to feed the world, global food production must nearly double. This yield growth must happen with less water, less fertiliser and fewer chemical inputs. Some growth can be managed by land expansion but this option is limited. As primary producers, farmers have a critical role to play in global food security.

There is an ongoing need to focus on New Zealand’s competitiveness and comparative advantage. For New Zealand producers and those people supporting them, there is a need to better understand why change is important and how New Zealand is likely to be placed, relative to what pressure will be exerted on us from global competition. Rabobank’s Sustainability Report has details and key points on this, related to the balance between meeting environmental expectations and remaining competitive while still retaining the ability for the industry to grow.

“The Future of Farming” noted that since the 1960’s, agricultural production grew by 30% per capita to feed a population that increased from 3 to 7 billion. But growth in productivity came at a cost to the environment. Worldwide livestock production is reported to account for 18% of human induced GHG (greenhouse gases), and use 70% of available fresh water, spoiling half of it (according to the WWF). A third of food is lost or wasted in the journey from producer to consumer. The amount of arable land has also declined due to erosion and urbanisation. Biodiversity has also declined worldwide. The conclusion drawn from these observations was that in order to feed the world, there is a need to produce more with less.

The “Future of Farming” concluded that enabling the next generation of farmers to feed the world sustainably (ie, to meet the needs of the current generation without compromising the ability of future generations to meet their needs) will require knowledge, adoption of existing and new technologies, collaboration, training and sharing best practices globally. Rabobank’s publication suggests there are still opportunities to be realised, involving productivity and efficiency. The opportunities include sustainable intensification, high-yielding and efficient systems, and lower land use, leaving space for nature, urbanisation and recreation.

The new Sustainability Report highlights the implications for each region and recommends general actions that each region could be taking to develop this competitive advantage. These include:

• Developing knowledge/understanding of local environmental issues,
• Being willing to adapt to regulations and incorporate environmental management into day to day farm management systems,
• Investing in science/knowledge to increase production while limiting environmental impact,
• Ensuring that the regulations that are imposed are fair and appropriate and will not impose unreasonable costs.

The report does not recommend specific on-farm actions for individual farmers (such as building wetlands, becoming more efficient with fertiliser, etc.) but will be encouraging farmers to consider what they can do on an individual level in their particular region.

The report includes a comparison of three regulatory approaches (in New Zealand, the Netherlands and California) and an analysis of what impact these approaches have had on the competitiveness of each of those regions’ dairy industries.

One of the authors of the report, Blake Holgate, Rural Manager, Sustainable Farm Systems, says the Netherlands are quite well advanced in their regulatory regime. “It’s a journey New Zealand is just starting to embark on and California are somewhere in the middle, with a prescriptive regime that’s been in place for around ten years now.”

Chief Executive of Rabobank New Zealand, Ben Russell, says New Zealand is at the very early stages of regulating the way that agriculture interacts with the environment via the Resource Management Act. He notes that in other countries, particularly the Netherlands, where there have been quite strict environmental regulations in place for over 30 years, farmers are used to dealing in a highly regulated environment.

Mr Russell says one of the reasons the bank has put the report together is that the next few years will be evolutionary, and sustainability will become an even bigger issue for farmers to understand and think about and work out how they are going to adapt their farms and farming systems along the way. He believes the industry is addressing the issue in a proactive way but it is a big challenge and it’s going to take science and great research to find the solution. Mr Russell believes that is a worthwhile long-term investment for all of New Zealand, as well as for the industry.

Rabobank has produced the report because Mr Russell says, “like everyone else involved in the dairy industry, it is trying to learn and understand”. He acknowledges it is a big challenge, but there is a lot at stake, both environmentally and economically. “Rabobank lends money to farmers. It wants farmers to make the right long term decisions for their businesses, and wants to be part of, and contribute and help the industry move forward on this very complex issue. Primarily it’s targeted at farmers who are really interested in the long-term future of the dairy industry. The farmers who want to be around in twenty or thirty years, want to be able to pass their farm onto the next generation in better shape that they got it. And that’s whether they’re Rabobank customers, or not.”