As an Environmental Consultant, I awaited Labours Freshwater Policy announcement from the moment that Jacinda Adern was thrust into the leadership of the Labour Party. As I watched her speech via Facebook live I heard her announce initiatives that were already government or local government policy through existing regional council rules. I then came to the realisation she was about to open a big can of worms in the form of a tax on water use.

There is no doubt that water management is top of mind for many of us this election but none more so than our farmers and growers, particularly those with irrigation. It’s struck me that using the word farmer seems to irk many, as if a negative connotation is associated with it.

The reality is that New Zealand’s farmers collectively are a group of thousands of small, often family run businesses and their employees. MBIE figures show that there are at least 68,000 enterprises in the Ag sector that employ less than 20 staff and on most farms that figure will be less than ten. Many are self-employed.

NZ’s Primary Industries punch well above their weight to compete on a global scale, often up against farmers from other nations who receive significant subsidies from their governments to assist with their costs of production, top up their incomes or assist them to undertake environmental works.

Irrigation dates to back the Ancient Egyptians and put very simply we have it because we need water to grow crops. In the areas of the country that have the most irrigation, rainfall can be scarce ranging from just 300mm in parts of Central Otago, through to 500-700mm in Canterbury and Marlborough in comparison to the 1200mm that falls in Auckland annually. Additionally most of that rainfall occurs over the winter when crops and plants aren’t actively growing. As a result, irrigation is used by some farmers and growers to supplement that shortfall in rain and to remain resilient in drought years.

What then is the likely impact of this policy on these families and their communities?

On the face of it phrases like ‘polluter pays’ or ‘user pays’ may sound appealing: but the balancing of environmental, social, cultural and economic needs of our communities is more complex than that, particularly when it involves our export goods competing internationally.

The other important point to note from the outset is that nobody in New Zealand pays for water. Even in Auckland, Watercare charges for the treatment and reticulation of water to your home or business, not for the water itself. In the same way as you pay the council through your rates or water bill, irrigators pay for the infrastructure through consenting, drilling of wells, installation and running of pumping stations or through payments to irrigation schemes with costs of up to $800/hectare.

When Labours policy was first announced, there was little detail of pricing and the commentary quickly went haywire with $18 Cabbages and $75 bottles of wine being thrown around - perhaps a lesson that detail matters. It now seems we are looking at a tax somewhere around 2 cents/ cubic metre (1000 litres or 1m3) of water.

For some context, to apply 1mm of water over 1 hectare of land it takes 10,000 litres of water or 10 cubic metres. To supplement that shortfall of rainfall to sustain crop or pasture growth it quickly equates to large volumes of water in litres.

To keep the math simple, a 200ha arable farm growing vegetable or grass seeds and grain in mid Canterbury applying 500mm of irrigation water a year would have a new tax bill of $20,000 a year.

A 100 hectare vineyard in Blenheim might use 199,500 m/3 of water through a drip micro system and have an additional tax bill of $3990.

Another Dairy farmer well known on twitter has calculated his annual water tax bill on his larger farm to be $53,000.

This is all in addition to the cost of obtaining the water which at up to $800/ha certainly isn't free to obtain.

Suddenly 2 cents doesn’t sound so small.

The key drivers for irrigation requirements are the soil type and its ability to hold water, the crop water demand and the evapotranspiration of the area. In the examples above, grapes have a lower water demand than pasture or grain crops.

Not unsurprisingly farmers are quickly doing the sums based on their current or consented water takes and trying to get to grips with how this compares to their annual incomes. Not all farmers are land owners and those who are often have very high levels of debt. This has been exacerbated in recent years with low milk pay-out, poor grain prices and drought which have left many farmers reaching for the overdraft to cover costs.

One arable farmer at a meeting in Ashburton on Friday said that he had calculated that at 2 cents/m3 his annual water tax bill could equate to half his annual income. Another wondered aloud what happens if he has a crop failure and he receives zero income for that year but still must pay the tax for the irrigation water he used?

In districts where there are significant areas of irrigation this tax would mean millions of dollars being removed from these local economies in additional tax. For the hardest hit Ashburton and Timaru some estimates have come in around $40 million. Tim Cadogan Mayor of Central Otago is quoted as saying the tax will cost his district $6 Million dollars. That’s millions of dollars not transferred to local tradesman, the local café or the rural supplies store.

This proposed tax has been portrayed as the solution to NZ’s water quality problems although, the more we learn about this policy the more difficult it is to link the purported benefits with the method proposed. Figures from the Ministry of the Environment show there is little to no correlation between swim ability of rivers and area of irrigation. In other words, the regions that will pay the most tax are not the ones with the greatest river water quality challenges. If Labour do as they say they will and return the tax to the areas from which it is collected (minus the percentage that goes to iwi), the areas with the poorest water quality will only receive a small slice of the tax.

I don’t for a second claim that there are no water quality issues in irrigated areas. The vast majority of irrigation in New Zealand is on the Canterbury Plains where there are undoubtedly challenges with respect to groundwater nitrate levels. Intensive collaborative planning processes are being undertaken to put in place strict rules to reduce diffuse discharges of nitrogen to groundwater including in some area requiring nutrient reductions of up to 45% - a challenge that will require all of the science we have available to date and more to get us there. Virtually every farm in Canterbury now requires resource consent, a farm environment plan and for on farm practices to be audited regularly to ensure that the requirements are met.

Working with farmers every day to ensure they meet these strict new nutrient management rules I am heartened by the change in practices and investment in improved infrastructure on farm often. There’s been some tough conversations about water in Canterbury over the past few years and these will continue, but there has also been an incredible amount of good will being rebuilt between industry and regional council with the common goal of finding solutions to our water quality challenges.

One of my greatest concerns regarding this policy is the possibility it could make meeting required reductions in nutrient losses more difficult. Making on farm changes to improve water quality is not cheap and any additional money squeezed out of what are often tight budgets may make it more difficult to do so. As an example, $30-40,000 can pay for three or four soil moisture meters to aid in more targeted use of irrigation or perhaps part of a new effluent system.

A water tax is a broad-brush approach to what are varied and complex issues. In my view identifying the contaminants causing the water quality problems for a catchment and targeting the management of those is a far superior approach than paying money to a government organisation in the hope that it will be returned to be spent the catchment it came from.

"If we are to solve our water quality problems in New Zealand we need to be focussed on acting to achieve the outcomes we desire rather than focussing on doing things that make us feel like we are doing something. The cumulative cost of poorly thought out policy will cost our communities, our economy and our environment greatly. "

﻿Consents for Africa

Another part of Labours water policy which hasn’t had as much airtime is a commitment to ensure that all changes in agricultural land use will require resource consent. Under the existing NPS for freshwater Regional Councils have been tasked with putting in place water quality and quantity limits and as a result consents for agricultural land use are already required in Canterbury, Taupo Lakes, Otago and the Manawatu. Plan change processes that introduce land use consenting requirements are in process in the Waikato, Southland, Bay of Plenty, Hawkes Bay, Tasman and Marlborough so it seems Labour are a little behind the 8 ball.

While consenting can be an effective tool for managing the effects of activities and is the mainstay of how the RMA manages our resources, requiring a resource consent doesn’t necessarily drive water quality outcomes. Targeted extension, monitoring and catchment management planning frameworks will.

Resource consents can also be a lengthy and expensive process. In Canterbury, there are at least 5000 consents to be processed at a cost ranging from $10-40, 000 per consent for preparation of applications and processing. Additionally, Environment Canterbury and Industry cannot keep up with the sheer volume of paperwork to be done.

Over my years working in resource management I’ve often wondered what we could achieve if we spent the money required for consent processing on undertaking environmental works on our farms or in our towns.

Mr Parker in Ashburton

On Friday night, I attended a public meeting with David Parker, Labours spokesperson for freshwater. While I’d already been publicly critical of the approach of a water tax, I wanted to hear what he had to say in more depth than a media soundbite or the 300-word summary on the Labour party website. I’ve also long believed that there is a legitimate conversation to be had about how we should fund environmental infrastructure such as the Managed Aquifer Recharge site in Ashburton, new storm water systems or floating wetlands such as those installed at Te Arawa in Rotorua to aid in reducing nutrient concentrations in the lake.

I was bitterly disappointed.

It was clear there was a deliberate attempt to portray agriculture as the root of all New Zealand’s water quality problems. Mr Parker provided photos of poor farming practices to set the tone. In my day job, as one of Environment Canterbury’s Certified Environmental Auditors, I audit farm management practice to ensure that famers meet minimum good practice standards for water quality. Of the farming practices that we were seeing in the photos, not even one of them was related to irrigation.

Additionally, almost every single one of them would be illegal in Canterbury under the existing Land and Water Regional Plan putting your consent to farm or your access to irrigation water at risk of being cut off.

When questioned on the price, Mr Parker warned the room that he wasn’t there to negotiate and threatened the farmers in the room that if they pushed him it would be 2 cents instead of 1 cent. He continually referred to the farmers in the room as ‘you people’ taking aim at them and telling them they alone were responsible for the rural urban divide, which is a painful subject and an area of great concern for many of us in the rural community. It seemed there was a deliberate tactic to drive a wedge between the urban and rural and capitalise on any anger to gain votes, all while ignoring the fact that we have water quality problems in our towns and cities too. I was shocked to see a senior member of parliament behave this way towards a group of voters who wanted to discuss an important policy issue.

When challenged he continued that this tax after all wasn’t just about the management of water quality problems but ensuring that user pays for a common good resource. If that is the case, the way in which the water resource is obtained should not matter and the tax should apply to all users of the resource including municipal supplies and factories that utilise these. If we want to have a conversation about user pays, let’s have a conversation about user pays rather attempt to hide it behind a thinly veiled claim that it is about addressing water quality challenges.

It is the responsibility of us all to manage our water well and that includes irrigators, towns and cities, and other commercial users. If we are going to tackle these challenges we must do it together, instead of pointing the finger at one another.

"The management of our freshwater is important for our ecosystems, our businesses and our recreation. Water is precious to all of us and deserves far more sophisticated and collaborative policy development than soundbites and feel good election policies if we are to deliver the Kaitiakitanga it deserves."

A shortened and less policy speak version of this article was published on The Spinoff on 22 August, https://thespinoff.co.nz/politics/22-08-2017/labours-crude-water-tax-is-a-kick-in-the-guts-for-nz-farmers/