Priority 1: Northland: an attractive business opportunity 

Context

• Overall context

  Increasing farm financial performance and resilience will be critical to underpin a strategy for further developing business opportunity in Northland. The dairy sector here is characterised by smaller farms occupying pockets of land, alongside sheep, beef and horticulture enterprises and a thriving tourism industry. The cross-sector ties and cooperation are a unique characteristic of the whole region compared to others, and which offer opportunities in broad community initiatives and multi-enterprise solutions to contextual challenges. The smaller, cheaper farms in the region provide opportunity for young farmers to attain farm ownership. However, the range of productive and financial performance here can present a risky stepping stone to build equity for growth without appropriate dairy business preparation and support. Māori land ownership in Northland is significant and will increase with further land settlements. Climate (and wider geophysical) variability is a feature of the region and is set to increase with the effects of climate change.

• Financial performance

  Compared to other regions, Northland farms are generally less profitable per hectare ($871/ha compared to $1168 national average 2014-15 to 2016-17), have lower return on assets (-2.2% compared to 1.4%). For 16/17, debt:asset ratio is 56% (up from 47% in 2013-14). The range is significant however, with genuine opportunities to grow equity at a good rate.

• Farming in Northland as a stepping stone

  Northland dairy farms are relatively less expensive, smaller, and can be used as a stepping stone for young farmers wanting to build skills, experience and equity on their path to farm ownership. Many farmers now in other parts of the country have honed significant skills farming in Northland. When the price accessibility is combined with the increasing age of land owners, there are plentiful opportunities to support young farmers to achieve their objectives and to assist older farmers to transition from active farming and farm ownership. Fully realising this opportunity requires a lift in capability or motivation that will result in high levels of farm performance that ensure returns are sufficient to enable young farmers to build equity quickly. There is also opportunity to support older farmers in mentoring and succession planning, including options for succeeding a dairy business, land use change or exiting farming.

• Farming in Northland as a lifestyle

  Many farmers in Northland enjoy farming here because of the warm climate and recreational opportunities. There is an opportunity for the region to showcase how a business oriented wellbeing balance can be achieved. Farmers want to ensure that there is enough profitability and resilience built into their farm businesses to provide for succession, to maintain wellbeing objectives through volatility and adverse events (e.g. flood and drought), and to meet any contextual constraints.

• Māori business

  Māori are strongly linked to significant tracts of productive and non-productive land in Northland.  While economic development of much of their land and enterprises to date has been constrained for Ngāpuhi, their land claim will at some time be completed.  In the interim, relationships with Northland Māori to understand their cultural values and economic aspirations will establish a platform to launch ventures which will include the dairy sector. The opportunity is to develop closer relationships with Māori land owners to understand their values and goals.  This will allow DairyNZ to work in a way that is better tailored to Māori.  Where other entities are already seeking to understand how to work alongside Māori, DairyNZ could also come alongside join rather than competing for farmer time. DairyNZ’s Maori Agribusiness project can be extended from BOP to include Northland once it is well established.

• Managing future climate challenges in Northland

  Climate change in Northland is expected to lead to coastal inundation, infrastructure disruption, increased average temperatures leading to changes in plant and insect species, and more significant weather events causing severe drought and flooding. There is a need and opportunity to look further into how these changes will impact Northland and develop appropriate strategies to maintain resilient businesses. This work would be a precursor for similar work required in other regions. An existing SFF project looking into the performance and persistence of diverse pasture species (ie not ryegrass or kikuyu) is entering its 3^rd year.

• Changing geographic spread of dairy farms

  The Northland regional economy is interrelated across all sectors and increasingly influenced by Auckland City.  The rural sector is similarly affected by demand for land for lifestyle blocks and subdivision, plus the aging population of farmers.  Land use is directed by economic drivers and these in turn determine the social and environmental impacts on the region.  The geographic spread of dairy farming in the region is changing because of these factors, leading to a decline in dairy farm numbers. Smaller pockets of dairying are made more ‘vulnerable’ as dairying communities with each farm that ceases milk supply  The geographic nature of the region provides pockets of land which are suited to particular land use within districts and within farms, and which may preclude spread of dairy beyond natural boundaries. There is opportunity for farmers to engage with other sectors to identify those parts of their land which for economic or environmental reasons are better suited to other land uses. This may improve environmental and economic sustainability of individual farms, accepting that it is unlikely to increase regional milk production. Roading infrastructure is a challenge for both dairy farmers and those who service this very spread out region, with locals having to contend with high volumes of tourist traffic.

• Extension 350

  The multi-funded (MPI, NRC, DairyNZ and Beef+Lamb) Extension 350 project is a cross-industry project using a farmer-to-farmer learning approach to improve the overall performance of farms in Northland (profit, environment, and people). The project is gaining momentum and is well placed to support a strategy for addressing this theme in the Northland region. There is also opportunity to learn from the Extension 350 model for its application in other regions. The structured mentoring utilised in the programme sets up a culture of support of progressing farmers.

What does good look like?

By 2020

• Northland dairy farms are increasingly resilient and provide opportunities for business development.
• New farm business operators (whether local or new to Northland) are skilled and resourced to grow in Northland dairy farming

By 2030

• Northland farms are seen to be attractive business propositions, providing options for both succession and business growth.

Outcome areas

• Improving farm performance in Northland

  Short Term 1-2 Years

  • Issues critical to farming success 5 years from now are identified and co-innovation research and/or demonstration projects are established with NDDT to address them

  Medium Term 2-3 years

  • Research/demonstration projects are underway and the search for future issues continues

  Long Term 10 years

  • Solutions for issues are pre-emptively found to increase performance and sustainability of Northland dairying.

• Attracting and supporting young farmers to Northland to viable business opportunities

  Short Term 1-2 Years

  • School students and school leavers are aware of opportunities for satisfying roles and progression opportunities in the dairy sector
  • Young/new people are informed of the opportunities in dairying and options for setting and achieving goals through this business are identified
  • New farm business operators (whether local or new to Northland) are skilled and resourced to grow in Northland dairy farming

  Medium Term 2-3 years

  • School leavers are taking up opportunities with the Northland dairy sector
  • Young farmers are skilled and resourced to take on dairy farming
  • YFC is supported and active in the region

  Long Term 10 years

  • NCEA curriculum includes positive dairy units and field trips
  • Young farmers are ready to replace the generation of farmers wishing to "move on"

• Northland presents viable dairy business opportunities

  Short Term 1-2 Years

  • Farm Gauge is a recognised tool for self-assessment of dairy businesses by RPs in Northland
  • ‘Live’ goals are significant in setting strategy and making dairy businesses effective and enduring
  • Awareness + benchmarking + farm data + Farm Gauge (or WFA) leads to an awareness of opportunity for the business and critical assessment against farm goals.

  Medium Term 2-3 years

  • Farmers that have completed Farm Gauge (or used any Whole Farm Assessment process) are able to implement options.
  • Farmers can articulate their goals as a basis for reviewing their system to enable farming under future regulations
  • Knowledge of Break-even Milk Price helps in surviving downturns without compromising standards for animal, people, or environment
  • Well informed, knowledgeable network of RP’s can provide good systems advice.

  Long Term 10 years

  • Revised systems implemented to deliver on sustainability and profit goals mean that dairy remains highest value land use.
  • Farmers have a pathway to achieve their goals that is relevant to their personal, biophysical and regulatory contexts, and are confident they are getting making progress along that pathway.

• Building relationships with Māori

  Short Term 1-2 Years

  • Maori in dairying are engaged to understand values and goals, and how to work together
  • Iwi, farmers and dairy industry supporters develop effective relationships across sectors and the wider community
  • DairyNZ understands what success (or “effective land stewardship”) means for different iwi in Northland

  Medium Term 2-3 years

  • DairyNZ is equipped to work effectively alongside Maori in dairying
  • Water quality, farm environmental and financial performance data is available and utilised for future investment decisions
  • Maori agribusinesses employ effective decision processes for integrating diverse land uses alongside a strong dairy business as their ‘foundation enterprise’

  Long Term 10 years

  • Maori dairy conversions are world class and contribute to fulfilling all the dairy industry strategy commitments

• Understanding and managing future climate challenges

  Short Term 1-2 Years

  • A collective understanding of challenges facing all primary production sectors is developed

  Medium Term 2-3 years

  • Appropriate responses to identified challenges are worked on in collaboration with other primary production sectors

  Long Term 10 years

  • Workable solutions are developed and communicated

• Farmers explore changes to improve all-round sustainability and resilience

  Short Term 1-2 Years

  • Farmers are aware of the Workplace Action Plan
  • A framework to support farmers to achieve world leading animal care is in place
  • Farmers are aware of Northland on-farm research initiatives related to environmental impact
  • Northland farmers are following NARF and E350 target farms’ decisions and progress
  • Language that aids change is routinely used by DairyNZ, farmers and their advisers

  Medium Term 2-3 years

  • 90% farms at good practice levels on regional priorities from the Workplace Action Plan
  • Farm practices relating to animal care on all farms are compliant with regulations
  • Language that aids change is routinely used by DairyNZ, farmers and their advisers
  • Northland farmers are following NARF and E350 target farms’ decisions and progress and adapting elements of their own systems

  Long Term 10 years

  • Northland dairy farms are great workplaces
  • Farm practices on most farms result in world leading animal care
  • Farm practices on most farms are reducing their impact on the environment
  • Farmers are confident in the all-round effectiveness of their farms

Priority 2: Doing the right thing now

Context

• Overall context

  Environmental management is of significant importance in Northland, primarily for the protection of the region’s natural features, but also due to both the impact on the sector, and its close proximity to Auckland, and the influence that can have on public perception. There is a lot of work to be done to bring farmers to a standard of good environmental management practice, as encouraged by the Good Farming Practice Action Plan, particularly as indicated by effluence compliance statistics. This issue represents a significant risk to the sector and may stand in the way of achieving the vision for the region. Significant improvement of environmental management in Northland presents opportunities for positive exposure of dairy farming to the community.

• Areas of environmental focus

  Swimmability of rivers and protection of sensitive estuaries is the lowest in the country:

  • High sediment levels result from erosion of slopes and river banks.
  • NRC still allows for discharge of treated effluent to water.
  • The majority of the many small streams and rivers discharge into sensitive estuaries. Future focus on these ecosystems will required an increased focus on GFP on farm.

  Water quantity

  • There is risk of future water quantity shortages with some catchments currently overallocated compared to the default allocation limit. Shed water is currently sourced 70% from surface and less than 30% from ground-water.

  Biodiversity

  • There is opportunity to protect and promote the many areas of native flora and fauna in the region.

  Green House Gases

  Northland farms have the lowest concentration of GHG emissions per ha in the country.

• Partners and stakeholders

  Sheep and Beef: Northland catchments all contain a mosaic of land uses.  Dairy farming in Northland is in pockets among sheep and beef farms, horticulture, and production and native forestry. Significant improvement to environmental effects warrants a cross-industry approach.

  Regional Council: While the NRC is currently under challenge regarding whether it has effectively implemented the requirements of the NPS-FM, they do largely maintain a positive relationship with industry and farmers.

  Dairy Environment Leaders: The is a small but growing core of farmers who are part of the Dairy Environment Leaders programme, who are building their understanding of issues, and their ability to influence policy, perception and on-farm practice.

  Auckland Council: AC do not view dairy favourably – there are about 150 dairy farms under this territorial authority that are north of Auckland.

What does good look like?

By 2020

• Recognising the need for environmental improvement, Northland Regional Council, farmers, and industry partners have a strategy in place and are working together towards achieving 100% adoption of good farming practice in Northland.

By 2030

• Northland dairy farmers all have Farm Environment Plans in place that enable them to meet Good Farming Principles prioritised with council and wider industry.
• Northland dairy farmers are telling their story of protecting and enhancing their rivers, estuaries and local biodiversity.

Outcome areas

• Farmers are making changes to meet environmental regulations or effective changes to meet environmental objectives and maintain or improve their viability

  Short Term 1-2 Years

  • Good farming practices are clarified for Northland
  • Farmers understand and meeting regulatory requirements under the NRC Regional Plan
  • Farmers understand and are working toward meeting wider Good Farming Practice principles 
  • Farmers, extension, and rural professionals have access to regionally relevant information on the principles and options for managing the four water quality contaminants, and GHGs, and for using water efficiently

  Medium Term 2-3 years

  • The potential impact of new and existing options and their interactions is clear when applied to a farm system 
  • Implementation of systems and options results in progress toward meeting improved environmental outcomes, while maintaining viable businesses
  • Rate of Farm Dairy Effluent Signficant Non-Compliance has been reduced to the national average.

  Long Term 10 years

  • Farm practices on most farms are reducing their impact on the environment, while meeting people, animal and business goals

• Progression of current and future Plan changes reflect dairy industry input and its contribution to the region

  Short Term 1-2 Years

  • An efficient and effective model for representing farmers and the needs of the dairy industry in policy development is further developed in Northland
  • Farmers are active and supported in Freshwater Community groups (or equivalent forums)
  • Northland Dairy Environment Leaders are active and supported in meeting their aims
  • Farmers and dairy industry supporters develop effective relationships across sectors and the wider community
  • There is a good working relationship between DairyNZ and NRC
  • Industry, farmers and NRC work collaboratively to ensure robust processes and information are utilised in formulation of targets, methods and rules

  Medium Term 2-3 years

  • Farmers are active and supported in Freshwater Community groups (or equivalent forums)
  • There is a good working relationship between DairyNZ and NRC
  • Farmers and dairy industry supporters maintain and utilise effective relationships across sectors and the wider community
  • Water quality, farm environmental and financial performance data is available and utilised for future policy decisions

  Long Term 10 years

  • Policy meshes well with industry strategy objectives and has good buy in from farmers in Northland

• Farmers’ stories about their place in the community and their landscape are well received by the public

  Short Term 1-2 Years

  • Communities in Northland (and individuals connected to the region) are aware of the efforts being made by dairy farmers to improve water quality while contributing to their communities and the economy of the region

  Medium Term 2-3 years

  • Communities in Northland (and individuals connected to the region) respect the efforts being made by dairy farmers to improve water quality while contributing to their communities and the economy of the region

  Long Term 10 years

  • Farmers in Northland have a firm social licence
  • Water quality and quantity expectations of the community are being met
  • Dairying is a valued element of Northland tourism

• Farmers have viable opportunities to create thriving, diverse, integrated, and flexible businesses

  Short Term 1-2 Years

  • Facilitated networks exist across some key communities
  • Facilitated networks exist across sectors
  • Social learning processes are utilised by farmers and their advisers
  • Northland farmers are aware of Maori agribusinesses exploring land use change options
  • Northland farmers are thinking about appropriate land use change, including extending beyond the boundary of single farm

  Medium Term 2-3 years

  • Well informed and knowledgeable network of RPs can advise on integrated businesses
  • Dairy farmers are widely involved in community activities, diverse networks, and cooperative initiatives
  • Northland farmers are following Maori or other ‘case-study’ agribusinesses exploring land use change options
  • With communities, government and other land users, dairy farmers are working to establish Northland’s blueprint for a 50-year vision of sustainable land use

  Long Term 10 years

  • Longer-term adaptive management frameworks are supported within
  • Economies of scope beyond a single farm are recognised and captured
  • With communities, government and other land users, dairy farmers are working toward Northland’s blueprint for a 50-year vision of sustainable land use