Waikato Regional Council and Healthy Rivers

There has been a large amount of publicity on the Waikato Regional Council’s Plan Change 1 for the Healthy Rivers On-Farm Project. This is commonly referred to as Healthy Rivers.

Healthy Rivers was notified by the Waikato Regional Council on 22 October 2016. This will permit parties to make submissions on the proposed Healthy River rules. The rules, once implemented, will become effective from this date. The final rules will be subject to a submission process with any legal action though the Court system.

Submissions can be made on the Healthy Rivers rules, with the likely deadline to be early 2017. I urge you to make submissions on any issues you have with the rules, whether negative or positive.

Chris Spargo attended an evening arranged by Dairy NZ in Reporoa on 2 November 2016 to gain a better understanding of the issues, and more importantly, the views of farmers who will be required to adhere to these rules.

It is extremely important to understand the proposed Healthy Rivers rules and how they may apply to your land. This will be important for any landowner, irrespective whether property is being brought or sold.

While the details of Healthy Rivers is too detailed for the purpose of this article, there are critical future dates to understand as part of this process, which includes:

• Farmland to be registered with the Waikato Regional Council by 31 March 2018;
• Submit nitrogen reference point by 31 March 2019;
• Farm Environment Plan due 1 July 2020 for priority one catchment areas;
• Farm Environment Plan due 1 July 2023 for priority two catchment areas;
• Farm Environment Plan due 1 July 2026 for priority three catchment areas;
• Properties that graze cattle, horses, deer or pigs must have fences or natural stock proof barriers to prevent entry into water bodies by 1 July 2026.

These timeframes are some time away, but it will be important to understand what catchment area your farmland is in and when Healthy Rivers is likely to apply to your farmland. Once all farmland has been benchmarked, the rules propose that those farms above the 75th quartile will be required to reduce their levels of nitrogen and phosphorus to the 75th quartile. Farmers with the highest benchmarks will not be able to continue with that level of nitrogen and phosphorus.

Any vendor or purchaser of farmland will need to proceed on the basis that the farmland will be benchmarked for nitrogen and phosphorus. The current proposal is for the benchmarking to occur for the 2014/2015 and 2015/2016 seasons. This may be unfortunate for some farmers, especially dairy where livestock numbers are lower and less fertiliser has been applied due to the recent dairy downturn. It will also prevent a change in land use where the proposed land use intensifies the levels of nitrogen and phosphorus.

A vendor and purchaser of farmland will need to work together to ensure both parties are able to undertake proper due diligence on farmland that is to be bought and sold. A purchaser can no longer rely upon their proper farming practice, if the level of nitrogen and phosphorus will be increased above that benchmark to be set by Overseer, or a similar model.

Healthy Rivers may affect a number of relationships, including farm owners and sharemilkers, contract milkers, lessors and lessees and vendors and purchasers of farm land.

Healthy Rivers should not prevent rural transactions from occurring provided that the parties undertake proper legal due diligence. There will be financial consequences if a purchaser either undertakes poor due diligence, or worse, is not aware of the implications of Healthy Rivers when purchasing farm land.

The intention of Healthy Rivers is to protect the water quality for future generations. However, there will be a financial impact upon the value of land, depending on its future land use.

Please contact a lawyer at BlackmanSpargo Rural Law Limited to discuss the implications of Healthy Rivers on any land transactions being contemplated because due diligence will be critical to the success of farming enterprises in the future.