AGRI-ENVIRONMENTAL PROGRAMMES IN NEW ZEALAND
A REPORT TO THE OECD
Executive Summary
In many cases environmental problems associated with agricultural production can be attributed to conflicting government policies. Government programmes to address environmental problems caused by agricultural production can be undermined by government policies which encourage the intensification of agriculture. The approach of the New Zealand Government towards agriculture and its effects on the environment has been to create a balanced and coherent policy environment which provides for sound environmental management undistorted by government funded agricultural support programmes.
Government assistance to New Zealand agriculture, which reached a peak in 1984, was drastically reduced over the remainder of that decade. Price supports, tax concessions, loan subsidies, input subsidies and free advisory services were all eliminated, and cost-recovery was implemented for government inspection services. Following the removal of subsidies, sheep numbers and the use of fertilisers and pesticides declined, and there was an increase in afforestation as increasing returns to forestry were reflected at farm level.
Various environmental issues remain to be addressed. The experience confirmed for New Zealand that the removal of subsidies is necessary but not sufficient to address the environmental impacts of agriculture. Specific environmental policies are necessary to address the environmental effects of agriculture.
Considerable progress has been made in developing a coherent set of government policies with the core objective of sustainable management. The principle of sustainable management is embodied in the Resource Management Act 1991. The Act has one clear and overriding purpose: to promote the sustainable management of New Zealand's natural and physical resources for the benefit of present and future generations. All issues relating to the management of land, water, air, and the coast come under the jurisdiction of the Act. Regional and local authorities are developing and implementing policies and plans to address these issues.
Several other reforms have had implications for agriculture and the environment. The Government has largely withdrawn from providing disaster relief to farmers, and now has a policy of encouraging individual landholders to manage climatic risks. Expenditure on disaster relief has declined from an average of $26 million per year in the late 1980s to less than $1 million projected for 1995-95.
Central government has also withdrawn from financial assistance for the construction of flood control and drainage schemes. Although flood control schemes continue at regional level, these are in most cases funded by special property taxes on beneficiaries. More recently, the Biosecurity Act 1993 was enacted to provide for pest management, including mechanisms to secure funding from beneficiaries and those who exacerbate a pest problem. Some funding continues from both central and regional government, but it is expected that the share of non-government funding will increase.
A range of central and regional government programmes exist which address, directly or indirectly, issues of agriculture and the environment. Total expenditure in New Zealand on agri-environmental programmes is estimated at NZ$300 million, of which between NZ$173 million and NZ$204 million is attributable to agriculture. After taking into account costs recovered from beneficiaries of these programmes, total government support to agriculture through environmental programmes is estimated at between NZ$131 million and NZ$148 million.
General programmes include a Sustainable Agriculture Facilitation Programme, a Resource Management Grants programme, regional council policy, planning and enforcement programmes, programmes to encourage the formation of "landcare" and other community groups, and a substantial amount of research funded primarily by central government.
Programmes to address soil conservation and related land issues include the East Coast Forestry Project, which uses a tendered-grant scheme to encourage the afforestation of erodible hill country in one region, and the Rabbit and Land Management Programme, which ends 30 June 1995. At the regional level, councils implement a mix of land clearance and land use controls, cost-sharing for soil conservation practices, and extension activities.
Regional councils implement a similar mix of programmes to manage water quality and water allocation. Abstractions from or discharges to water require a permit from regional councils. Councils have a range of planning, administration, enforcement and extension activities related to water.
Nature conservation is also pursued through a variety of measures. These include amendments to the Forests Act to provide for the sustainable management of natural forests. Central government also administers two funds to purchase or otherwise protect forests with high conservation values. Local government councils maintain controls on land clearance, and also manage a network of riparian strips which they can acquire through controls on the process of land subdivision. Some councils also negotiate covenants with private landowners to protect natural forest remnants or other significant natural features.
Substantial programmes also exist to protect agriculture from the environment. These consist primarily of pest management and flood control activities funded by regional councils, although much of the funding is recovered through property taxes on beneficiaries.
User-pays and polluter-pays principles are well established in New Zealand. For a range of activities, farmers must obtain environmental permits and, in an increasing number of circumstances, must pay the administrative costs and on-going monitoring costs associated with the permit. Apart from special programmes to address severe land degradation in two regions of the country, and a diminishing number of regional council grant programmes for soil conservation, there are no government subsidies to farmers to comply with environmental standards. To address non-point source pollution problems, local authorities are encouraging landowners to take collective responsibility for devising solutions to meet community expectations. Although there is still some way to go, New Zealand is moving towards internalisation of environmental costs in order to encourage the efficient and sustainable use of natural resources.
Contact for Enquiries
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