National Policy Statement for Freshwater Management

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The National Policy Statement for Freshwater Management (Freshwater NPS) is something that’s a hot topic in New Zealand’s rural sector right now.

Although some areas like Rotorua and Taupo are already in the thick of it, other areas of the country are just beginning to see the effects of the policy coming into play.

So what is it?

The Freshwater NPS is a policy which sets the benchmark for freshwater management for all Regional Councils to implement by 2025. Regional Councils will create rules and regulations for landowners to adhere to, for better agricultural water management.

The aim of the policy is to support our environment, help ecosystems thrive and ensure better water quality.

In theory, the Freshwater NPS brings only good things. It will reduce nutrients and sediment reaching our  waterways to ensure New Zealand’s fresh waterways flourish.

But the problem we’re seeing is that with anything regulatory, it comes at a cost – generally a cost to landowners.

Here’s an overview of what’s to come

In some regions the rules and regulations are yet to be confirmed, but it will eventually become compulsory for rural landowners to be compliant with the new regulations.

From a market value perspective, the intensity of farming allowed will directly impact on land values.

The regulations will see nitrogen leaching and fencing of waterways as two of the main areas targeted by the policy.

  • Caps on nitrogen levels

There will be a cap on nitrogen application to decrease levels of nitrogen leaching into fresh waterways. This is because high levels of nitrogen in the water allows algae to grow at a faster rate, making the water harmful to ecosystems.

How will this affect landowners? It will affect the way landowners use their land and manage their agricultural operations. Fertiliser inputs, stock management and pasture management are all likely to be impacted, resulting in a potential higher cost of production.

  • Compulsory fencing

As part of the Freshwater NPS regulations, the landowner will need to install fencing around waterways. By providing a buffer between stock and the waterway it will help limit the nutrients entering the water, and in turn improve the habitat for wildlife.

The policy will also bring in an ongoing compliance regime for landowners to follow, to ensure standards are being met.

How does it affect your land value?

With the new regulatory requirements in place, buying and selling rural land will change.

Potential buyers will need to know the full history of the land. This includes things such as:

  • Soil type
  • Stocking rates
  • Fertiliser history
  • Land contour and location
  • Resource consents

With extra costs in getting farm consultants involved and a higher level of due diligence, some landowners may opt to adopt a lower level of allowable nitrogen inputs set by Regional Councils.

Land values will be affected by the levels of nitrogen input allowed. If you own or are purchasing a property with historically low nitrogen inputs, you should be aware of potential restrictions on the use of the land for intensive farming.

Landowners and purchasers will also need to keep abreast of potential changes to the legislation by the new Labour government.

In May, Labour’s Environment Minister David Parker signalled that they will be introducing new measures in a reformed National Policy Statement (NPS) on Freshwater Management. A new national plan would seek to reduce farming intensity as a permitted activity and set new nutrient levels.

Who can you talk to for advice?

The Freshwater NPS is a topic all rural landowners should be across. Even though it may not have reached your region yet, your Regional Council will be working on rolling out the policy’s regulations very shortly. We estimate to see these in place over the next two years

Given that there are some regions who are already meeting the new regulations, there are lots of experienced people to talk to.

Knowledgeable TelferYoung valuers

TelferYoung’s team of Rural Valuers are extremely knowledgeable about the Freshwater NPS and have been working with rural landowners to help them through the changes for many years.

They can explain what can and can’t be done on the land and will be able to identify if there is an impact on value.

Helpful resources

Beef and Lamb NZ have excellent information and resources to help better manage your land’s nutrient levels.

There are also studies and research being done by DairyNZ to help find ways to reduce the amount of nitrogen leached on farms.

If you’d like to talk to an experienced rural valuer about your property and the Freshwater NPS, please get in touch and we’ll put you in contact with the valuer in your specific region.

Posted 1 year ago