New Zealand’s farmers are rising to the climate change challenge.

The agricultural sector is facing risks from a changing climate – a moderate drought may  reduce the operating profit of a dairy system by almost 30%, and two years of drought could cut sheep and beef farm profits by almost 65%, according to the Westpac NZ Agribusiness Climate Change Report. There are also risks associated with moving to a low-carbon economy, from changing regulations to emissions pricing to the cost of transitioning.  

But despite these headwinds, farmers in Aotearoa are rising to the challenge, finding ways to boost sustainability and reduce emissions across their businesses. The good news is that the Westpac NZ Agribusiness Climate Change Report finds New Zealand’s 10% methane reduction target by 2030 is achievable, through the kind of technology already available, alongside land use changes.

“There is a lot of really good stuff happening,” says Tim Henshaw, Westpac Head of Agribusiness. “Many Farmers are making investments into sustainability and they aren’t getting the recognition they deserve. A huge number of my clients are thinking about the long-term view of their farm’s future every day, and we see the incredible changes they’re making.”

Widespread irrigation efficiency improvements

Traditionally, farm irrigation has been carried out by low-tech and inefficient systems such as border dyke or travelling gun systems. Replacing those with high-tech irrigation technology such as centre pivots or fixed-grid systems results in more efficient irrigation with lower water use, simpler monitoring of water use and increased productivity on farm.

“Around 40% of my clients have undertaken some form of irrigation efficiency improvement in the last two years,” says Will Ferguson, a Westpac Senior Agri Manager who covers the Canterbury region. “We’re seeing obvious benefits for efficiency and monitoring, and in some cases ongoing cost benefits. The technology behind it is awesome – as an example pivots can easily be controlled from a smart phone and deliver water with millimetre accurate application.”

Native planting is protecting waterways

Across New Zealand, farmers have been planting natives: around waterways, in unproductive areas, and to provide animals with shade. Ferguson says investment in planting can run into the hundreds of thousands of dollars: “This is a pure cost to the business, with a focus on improving biodiversity and animal welfare”

Planting is a way to protect areas from flooding and erosion, and strategic planting plans are helping farmers mitigate the impacts of extreme weather events.

“Farmers are widening riparian buffers, and in areas close to streams they’re using plants that lie flat during flooding, then the taller vegetation further away from banks,” Ferguson explains. “This has been an area of focus for customers in flood-prone areas, to mitigate the risk. We also see catchment groups working together to create positive outcomes around local waterways.”

Precision agriculture can save money and resources

Precision agriculture is another tool being used to reduce fertiliser use, reduce water use, and help measure and monitor resource use across a farm. This “climate smart farming technique”, as the Westpac NZ Agribusiness Climate Change Report describes it, can reduce emissions as well as improving the use of resources, and may ultimately support lower ongoing costs for farms. Precision equipment is already in use on many Kiwi farms, says Henshaw:

“For example, new GPS technology on tractors provides accuracy down to 2.5cm for drilling, spreading and spraying. It’s awesome and it keeps getting better – there are so many applications and uses for this. The technology can be set up to create buffer zones to avoid sensitive areas or wetlands and, farmers can avoid spreading on headlands where stock congregate and naturally transfer fertility. You’re saving resources, not using fertiliser where it’s not needed, and getting better bang for your buck.”

Farmers are “living and breathing” climate change

Successful farm management practices can lead to better productivity, potentially higher profitability, and opportunities in new markets. However, there are costs associated with upgrading to new equipment and systems. With the findings of the Westpac NZ Agribusiness Climate Change Report in mind, Westpac is launching its sustainable farm loan offering which is a new and innovative sustainable finance loan.

“We’re treating the whole farm as a sustainable asset,” says Henshaw. “We’ll be measuring farms against sustainability guidance we’ve prepared with the help of AsureQuality. For farmers and growers, a large portion of the criteria will already be met from existing farm compliance or assurance reporting, and the rest is thinking about future challenges and being independently verified.”

Farms that meet the criteria will get a discount on all their interest rates for term debt specifically associated with owning the farm itself.

New Zealand’s farmers are already “living and breathing climate change”, Henshaw adds, as Canterbury has just experienced one of its warmest ever autumns, while farms on the East Coast recover from devastating floods. There might be a few loud voices of dissent, but the majority of our farmers and growers are already taking action to mitigate a warmer future and reduce their impact on climate change.

“There are so many positive things happening in the industry,” says Ferguson. “If you’re operating best practice or better, then new regulations won’t worry you.”