Dairy industry could have ‘zero-sum gain’ - study

See also: Research paper sells dairy down the river

A Massey University study has revealed the costs to society of New Zealand’s dairy industry in a worst case scenario are approximately equal to the economic benefits of the industry.

“NZ Dairy Farming – Milking Our Environment for All Its Worth,” written by Massey University's Professor Russell Death, Dr Mike Joy and research technician Kyleisha Foote appeared last weekend in the US scientific journal Environmental Management. (See report here)

The paper highlights the “exponential increases in pollution and costs to the community in the form of lost recreation opportunities and clean-up costs” taking place in this country in recent decades, as a result of the transformation of the dairy industry from a low input/cost/impact system to high intensity/cost/impact system.

"These costs, known as externalities, are largely not borne by the industry but rather by society at large and these costs have, in the main, not been addressed and are accruing," Dr Joy says in a statement.

The analysis reveals that for the worst case scenario, using the limited number of impacts valued, the costs to society are about equal to dairy’s export revenue and contribution to GDP. 

"In other words, the industry is a zero-sum gain for New Zealand if the costs are included," said Dr Joy.

"A strong message from the study is that avoiding pollution is far cheaper for everyone than trying to clean it up afterward and there is now ample evidence that farmers can make more profit and pollute less when not myopically chasing increased production." 

The study cites multi-million dollar clean-ups in the Rotorua lakes, Lake Taupo, the Manawatu river and Lake Wairarapa, which have been funded by New Zealand taxpayers.

"These are just the tip of the iceberg. The degradation is far more extensive and will increase due to delays in pollution effects being seen; this is because nitrogen can take years – even decades – to move through subsurface to waterways,” Dr Joy says.

“The paper is the first real attempt to quantify the costs to the community of dairy farming in New Zealand and its clear the costs, or externalities, are immense.

"Analysis reveals costs to society are about equal to dairy’s export revenue and contribution to GDP."