Farmers and councils will get more time to implement new controls on freshwater quality, and a national bottomline on dissolved nitrogen levels will be deferred under final proposals announced by the government today.

The measures are intended to immediately reduce nitrogen leaching in key 'at-risk' catchments while halting harmful intensification of farming and forestry in others. They still assume use of a new mandatory water module in farm management plans, but development of that will take a further year or more.

Regional councils and unitary authorities have until December 2024 – a one-year extension – to propose new regional freshwater plans, and don't have to have them finalised for up to two years after that.

A proposed national maximum level of dissolved inorganic nitrogen levels will also be deferred for at least a year. A national cap on synthetic nitrogen of 190kg per hectare has been set but won't apply to arable farming or horticulture.

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Announcing the package today, and $700 million to help deliver it, Environment Minister David Parker said it had been important not to lose momentum due to the Covid-19 crisis.

Food processors and the major farm groups wanted the work to continue and there is a widespread community demand for restoration of the country's waterways, he said. Not acting now would only create a bigger mess with a higher cost to clean up later.

$700m pledged

"You can't make things better by letting them get worse," he told journalists at Parliament.

The government's Essential Freshwater proposals announced in September were widely criticised as unreasonably costly and in some cases arbitrary and not reflective of varying catchment quality around the country. The timetable for the simultaneous redevelopment of 17 regional water plans was also considered unachievable.

The regime then was expected to cost about $1 billion over a decade – including about $700m for fencing, riparian planting and the development of 28,000 farm plans. The government had allocated $229m in the 2019 to assist with that.

Today, the government pledged $700m to help across a range of measures and to also create jobs in the wake of the coronavirus crisis.

"We know the primary sector is facing challenges in the wake of Covid-19 so the government has reduced the cost and impact on them, including putting up $700m in funding to help with clean-up efforts but without compromising environmental benefits," Parker said.

He noted that the decision to defer a national standard on dissolved inorganic nitrogen levels reflected a lack of scientific consensus and one may still be developed. That decision, and a move to simplify fencing requirements, including a three-metre minimum set back and not requiring the removal of existing permanent fencing, was made pre-Covid.

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Need recognised

A key part of the original plan, restricting increases in irrigation of dairy farms, conversion from arable, sheep or beef farming to dairying, and from forestry to pastoral operations, remains.

But farm plans, which would have required farmers to prevent any increase in nitrogen, phosphorus, sediment or pathogens levels beyond their average in the five years through 2018, were always contentious.

"This is not required immediately but, over the next 12-plus months, the government will work with primary sector representatives, iwi/Maori, regional councils and other interested groups to develop new regulations, which will set out the exact requirements for mandatory freshwater modules of farm plans," officials say in a summary of the changes.

"It is the intention to build on existing industry body or agribusiness farm plans. We will prioritise this work in catchments most in need of improvement or protection."

Agriculture Minister Damien O'Connor said most meat and dairy processors required farm plans now and the vast majority of farmers recognised their need.

The recent focus had been on making the changes do-able but the plans would become mandatory through regional plans in time, he said.

Dairying drop

"This is an evolutionary process to get to the point where each and every farmer has an environmental farm plan."

DairyNZ previously estimated the economic impact of the phosphorus and nitrogen controls at $6b a year by 2050, compared with $500m to $1b in compliance costs and lost production from the current national policy statement still taking effect.

Dairy activity could drop by almost a quarter, with Southland, Taranaki, Marlborough and the West Coast the hardest hit, the organisation said in October.

Today, O'Connor said about 80 per cent of dairy farms wouldn't be affected by the cap on synthetic nitrogen use. Parker said he doubted the changes could require large-scale change in land use.

Officials estimated the changes from the original proposals have reduced the 30-year cost of the package by about $3.4b. After allowing for an estimated $7b of benefits over the same time from reduced health risk, improved recreation and reduced flooding risk provided by wetlands, they estimated the net benefits at about $3.8b, or $193m a year.

O'Connor said there were 'huge" premiums to be made internationally by food producers who could demonstrate they were producing sustainably and that was what the country had to aim to capture.