Todd Charteris. Photo / Supplied
Every day of the week somewhere in New Zealand a Rabobank rural manager sits around the kitchen table with the farmer client to chat about his environmental and social plan. The bank manager is collecting data and exploring the farmer's financial and non-financial goals and achievement.
"We have an ambition of financing good, sustainable farming businesses, and this involves agronomic, environmental, social, and workplace performance," said Rabobank New Zealand chief executive, Todd Charteris.
"We see it as a win-win situation. It helps our clients adapt to emerging regulatory requirements and increasing consumer and community expectations. At the same time we are getting some really interesting and robust data on the non-financial performance of farms across our portfolio," he said.
Rabobank, first established in Holland in 1898 as a farming cooperative, has a longstanding mission of "Growing a better world together" to support sustainable food production. Of course, the locals here have added their own twist: "Growing a better New Zealand together."
Rabobank has a 350-strong workforce located in 32 offices across New Zealand. The bank's staff has been working with up to 5000 farming groups, mainly families but also owners of multiple farming operations, about sustainability issues for the past 18 to 24 months.
"We've been able to build a detailed snapshot of the non-financial performance of the business, and establish a benchmark for farmers," said Charteris. The data collected includes the agronomic approach to soil management and crop production, effluent systems, social and workplace performance, health and safety, and succession and training plans.
Charteris said more than half of the clients have a competent farming environmental plan. A third are volunteering and protecting plant and wild life, two-thirds have completed at least half of their riparian planting, and a third have forestry plantations eligible for carbon credits, though some clients may not have registered their plantations.
"When you aggregate it all, there's really good stuff going on," said Charteris. "A lot of farmers have already been on the sustainable journey for some time and they are environmentalists at heart — that's what is misunderstood."
The dairy and sheep and beef farmers in the South Otago Pomahaka River catchment, for example, have banded together to participate in a monitoring programme to improve the water quality on their properties.
The catchment starts high in the foothills of Old Man Range and runs 80kms downhill to some of the finest farmland in the country. The farming community there has allowed water scientists to come onto their properties to take samples anywhere they like and measure the levels of turbidity, nitrogen, nitrate, phosphorous and E-coli.
Some of the early results weren't pretty. Before then, the farmers didn't really know what was happening in their catchment.
They took a strong stance and established water management plans to clean up the Pomahaka River, a tributary of the mighty Clutha River.
They soon saw the affect their management practices had on the improving the water quality.
The water schemes were developed through the Beef + Lamb NZ land environment plans that identified wet areas that needed to be fenced off. This kept livestock away from the environmental risk areas and generated fresh water on top of the paddocks. The livestock, therefore, had less need to visit the river, creeks and streams.
Down on the dairy farms, the farmers kept their cows away from the lower slopes during the winter until the soil was dryer. This saved sediment, phosphorous, nitrate and E-coli run-offs into the river.
Also, the last line of winter crop feed is offered to the cows when they are moved to the lower slopes.
Some Pomahaka farmers have developed wetlands and fenced them off, stopping nitrogen leaching and contaminant run-offs, especially phosphorous.
The bonus is that the quality of the water coming out of the wetlands is better, and the farmers have a better understanding of the impact of their farming practices.
Charteris said farmers are facing increasing regulatory changes and challenges through new national polices on carbon reduction, freshwater, winter grazing and sediment loss.
"There is still a degree of uncertainty over what the (new) regulations will look like and what they mean for farmers. Every catchment is different and it becomes complex overlaying national requirements — that's where the challenges are.
"The regulatory changes will, no doubt, come at an extra cost for farmers and we are putting a plan in place to support them."
Charteris said the bank is looking at providing sustainable agricultural financing. "We are working through specific products to incorporate into existing facilities. The finance may be required for upgrading a dairy farm or planting waterways to capture sediment run-off.
"The loans will likely be at a lower cost based on risk and capital and they may have milestones built in that are based on environmental impact. We have the opportunity to look at products that reward the right (environmental) behaviour," he said.
New Zealand relies heavily on its primary production base and it is critically important to recognise the impact of having a long-term sustainable future, Charteris said.
Sustainable farm management plan
World markets are demanding high-quality, sustainable products, and reviewing farming operations to meet this demand can also improve the farmer's bottom line.
Here are Rabobank's top 10 tips to get started:
● Find out how contaminants are leaving your farming system.
● Investigate the range of mitigation options available to reduce your losses — DairyNZ, Beef + Lamb NZ and council websites are a good source of information.
● Get involved with local catchment groups that have been set up to provide farmers with solutions to local issues.
● Take advantage of freely available services/resources (such as DairyNZ's Sustainable Milk Plans, Beef + Lamb NZ's land environment plans, or any free environmental workshops.
● Develop a plan for implementing mitigations over time.
● Watch where water converges when it rains to get an idea of where to focus mitigations.
● Implement only those mitigations that are relevant to your property's contaminant loss.
● Focus on mitigations that are most cost-efficient first — before moving on to more expensive mitigations.
● Discuss with the person who prepared the farmer's Overseer Nutrient Budget how it can be used as a tool to improve your nutrient efficiency.
● Refrain from making any major system changes and/or investments without fully understanding the economic and environmental implications.
Rescue partnership
Rabobank is a partner with food rescue charity, KiwiHarvest, providing financial support and organising volunteer days for the bank staff.
"One of the big things for us is partnering with an organisation that is doing the right thing — getting nutritious food out to people who need it. You'd be staggered at how much food is wasted and goes to the landfill and contributes to increased greenhouse gases," Rabobank CEO Todd Charteris said.
Since 2012 KiwiHarvest has delivered 14.6 million meals to New Zealanders and saved 5.12m kilograms of food.