Dairy farmers 'won't be able to bear' Labour's water policy - expert

  • 10/08/2017

An agricultural expert says a Labour policy that charges those who use water for commercial purposes is "a punitive exercise" that has the potential to put dairy farmers out of business.

While Greenpeace and other environmental groups welcomed Jacinda Ardern's freshly announced water policy on Wednesday, farmers, horticulturalists and rival politicians were less enthused.

They picked holes in the policy over its lack of specificity and the economic impact it'd have on the regions - and Massey University agribusiness expert Dr James Lockhart says they have a right to be concerned.

"If you were a horticulturalist or a pastoral farmer on the Heretaunga Plains, in Malborough, particularly in Canterbury or Otago, you'd be really concerned about what has been offered here," he told The AM Show on Thursday morning.

Dr Lockhart said the policy is somewhat of an oxymoron, as it links volume of water extracted to the degradation of rivers - yet drops charges related to water extraction during droughts.

"At times, when we're extracting water during drought, it looks as though the policy's going to be backed off," Dr Lockhart explained.

"Water definitely has value, and yet in New Zealand we've built an entire economy on the back of our agriculture and horticulture, with the assumption that water, while being regulated, has been free to date."

Dr Lockhart said any changes  to water policy could have a negative effect on agriculture, which the Government has historically championed as an area can New Zealand excel in on the global stage.

"Right now, from an agricultural or horticultural perspective, it simply looks as if it's a punitive exercise to try and rectify some supposed wrongs between those living in an urban environment, and those who use water for productivity and profitability," he explained.

"Whether we can go and retrospectively apply some sort of royalty has significant impact on the property rights and decisions that have been made with respect to that investment, which puts at risk and certainly introduces a degree of uncertainty into that sector."

He said it's not yet clear whether the Labour policy will result in farmers going out of business - but he says with a downturn in profits, it may be "an additional cost many dairy farmers won't be able to bear".

And he warned that it may not just be farmers who are hit by the policy.

"Whether it's confined to agriculture and horticulture, or spills into the commercial space, is a really interesting question - none of which has been shared by anyone in the Labour Party to date."