But while we are trying to improve water quality throughout the Waikato under PC1 we don’t want, and can’t afford, to end up failing to ensure food security, creating racial division in our region and further afield and causing an economic disaster.
Unfortunately that is exactly the outcome that we are staring at as a result of the implementation of PC1.
Currently the Waikato Regional Council is working on the requirements from the Environment Court hearing into PC1, as contained in the latest report from the Court.
PC1 is the proposed change to be made to the operative Waikato Regional Plan that was put forward by the Waikato Regional Council back in 2016.
It is expected PC1 will be operative next year and as a result of the Environment Court hearing, many farmers in the Waikato Region will need to get resource consent and or develop a farm environment plan to allow for continued operation of their farms.
As a result of the proposals in PC1 there will be farmers that will have to leave the industry as they will not be able to make a living carrying on farming under the new requirements.
Commercial Vegetable Production
Commercial vegetable production (CVP) in Waikato will face higher compliance costs, tighter expansion pathways, and more complex planning. Direction 18 of the Final Decision explicitly focuses on “Nitrogen losses from CVP activities”.
Main economic impact channels
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Consenting costs
- All CVP operations require resource consent (existing and new).
- Discretionary status for expansion increases uncertainty and legal/consulting costs.
-
Farm Environment Plan (FEP) and audit costs
- FEPs must include CVP specific nitrogen risk analysis, good management practices, and actions to reduce risk, mirroring the drystock framework described under Direction 13.
- Audits and evidence requirements add ongoing fixed costs.
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Nitrogen risk scorecard and data costs
- CVP must use an approved nitrogen risk scorecard; the Court clarifies that NRS is not a regulatory alternative to Overseer but a decision support tool.
- Growers incur costs for data collection, tool use, and updates.
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Operational constraints (rotation, erosion, wintering)
- Rotation and erosion controls can reduce flexibility, potentially lowering yields or increasing operating costs.
To summarise how the PC1 Final Decision affects commercial vegetable growers in Waikato, with emphasis on economic and practical implications.
Key points
1. CVP is fully brought into the consenting and FEP framework
- All commercial vegetable production requires consent.
- FEPs must include CVP specific nitrogen risk analysis and actions to reduce risk, consistent with Direction 18 (“Nitrogen losses from CVP activities”).
2. Compliance and audit costs will rise materially for CVP growers
- Consents, FEP preparation, audits, and use of approved scorecards create new fixed costs.
- Administrative burden (evidence for auditors, cultural information, reporting) is significant, as reflected in Schedule D3 and related directions.
3. Expansion of CVP is more constrained than some pastoral land uses
- New CVP area generally requires discretionary consent, making expansion slower and more uncertain than some dairy/drystock pathways.
CVP under PC1 Final Court rulings represents a high compliance, high certainty but low flexibility regime:
- Good for environmental risk management and Te Ture Whaimana alignment,
- But likely to raise costs, slow expansion, and concentrate economic pressure on larger, multi site vegetable growers.
The imposition of restrictive regulatory burdens and expensive compliance costs for producers will most likely lead to increased loss of productive land eventually resulting in upward costs of food produced within the catchment which is one of the country’s main vegetable production areas and provides most of the fresh vegetable production for the Auckland population. This is nearly a quarter of the total NZ population.
Given the fact that much of the land used for pastoral farming is not suitable for commercial vegetable production, the possibilities of land taken out of pastoral farming due to financial constraints under PC1, being converted to CVP is not great which adds further uncertainty to our ability to provide food security to the nation or export capability.
Treaty of Waitangi requirements
Under the new Bills (Natural Environment Bill + Planning Bill) which replace the Resource Management Act (RMA) Iwi are given a role through Treaty clauses, mandatory participation requirements, recognition of settlement rights, and roles in planning, monitoring, and decision making. The new system strengthens iwi involvement compared with the RMA, and makes it mandatory, structured, and nationally directed.
A brief analysis of these bills is set out below:
1. Natural Environment Bill; How iwi are involved
1.1 Treaty of Waitangi clause (stronger than RMA)
The NEB contains a descriptive Treaty clause requiring decision makers to:
- Recognise Treaty settlements and statutory acknowledgements
- Give effect to national direction on Māori interests
- Engage with iwi in a structured, early, and ongoing way
This is more explicit than the RMA’s “take into account” wording.
1.2 Mandatory iwi involvement in environmental limits and targets
Iwi must be involved in:
- Setting environmental limits (freshwater, biodiversity, air, soil)
- Setting targets for ecosystem health
- Identifying culturally significant places
- Developing monitoring frameworks
This gives iwi a direct role in shaping the environmental constraints that apply to landowners.
1.3 Protection of Treaty settlements
The NEB upholds all existing Treaty settlements, including:
- Co governance and co management arrangements
- Statutory acknowledgements
- Cultural redress areas
- Joint management agreements
No planning or environmental rule can override settlement rights.
1.4 Iwi role in monitoring and environmental data
Iwi are expected to participate in:
- Environmental monitoring
- Data collection
- Cultural health indicators
- Reporting on environmental outcomes
This embeds iwi in the operational side of environmental management.
2. Planning Bill — How iwi are involved
2.1 Treaty clause
Like the NEB, the Planning Bill includes a descriptive Treaty clause requiring:
- Recognition of Treaty obligations
- Integration of Māori interests into planning instruments
- Engagement with iwi at all stages of plan development
2.2 Iwi involvement in Regional Spatial Strategies (RSS)
Iwi must be involved in preparing the RSS, including:
- Identifying growth areas
- Identifying no go areas (e.g., wāhi tapu, cultural landscapes)
- Climate risk planning
- Infrastructure sequencing
RSS decisions directly affect property rights, zoning, and development potential.
2.3 Iwi involvement in the new Combined Plans
Iwi must be engaged in:
- Drafting the combined regional plan
- Identifying cultural values and sites
- Setting rules for land use, subdivision, and development
This is a mandatory, structured engagement, not optional.
2.4 Recognition of iwi management plans
The Planning Bill strengthens the status of iwi management plans:
- Councils must consider and integrate them
- They influence zoning, rules, and consenting pathways
This gives iwi a stronger influence over land use decisions.
4. What this means for Waikato Region under PC1
A. Governance and process implications
- Iwi must be involved early and continuously in RSS and Combined Plan development.
- Waikato Regional Council must demonstrate active partnership, not just consultation.
- Existing co governance bodies (e.g., Waikato River Authority) become even more central.
B. Property rights implications
When the Maori signed the Treaty in 1840 they ceded sovereignty to the Crown. There has been some debate over the years about what, exactly; Maori believed they were signing in 1840 and whether Maori did cede sovereignty to the British Crown when they signed the Treaty of Waitangi or, as is now contended by some, did they not?
The acclaimed Maori Leader; Sir Apirana Ngata - M.A. LLB. LIT.D in his book, the "Treaty of Waitangi” prepared an English translation of the Treaty in 1922 that argued that the Chiefs had “cede (d) absolutely to the Queen of England for ever the Government of all their lands”.
He concluded with the words:
"The Treaty made the one law for the Maori and Pakeha. If you think these things are wrong and bad then blame our ancestors who gave away their rights in the days when they were powerful".
In addition to this, the standard translation used by the Waitangi tribunal in the early 1990’s was made by Professor Sir Hugh Kawharu. Here is his full translation of the Treaty:
“The first: The chiefs of the Confederation and all the Chiefs who have not joined that Confederation give absolutely to the Queen of England for ever the complete government over their land.
“The second: The Queen of England agrees to protect the Chiefs, the Subtribes and all the people of New Zealand in the unqualified exercise of their chieftainship over their lands, villages and all their treasures. But on the other hand the Chiefs of the Confederation and all the Chiefs will sell land to the Queen at a price agreed by the person owning it and by the person buying it (the latter being) appointed by the Queen as her purchase agent.
“The third: For this agreed arrangement therefore concerning the Government of the Queen, the Queen of England will protect all the ordinary people of New Zealand (i.e. the Maori) and will give them the same rights and duties of citizenship as the people of England.”
Sir Hugh and the Tribunal in this time were in no doubt that the chiefs had ceded sovereignty to the Queen.
If ever there was a declaration that we are one people and that Maori have the same rights and duties of citizenship, surely it is Sir Hugh’s translation of the Treaty’s third clause?
In any event, Sir Hugh’s translation of Article 3 surely rules out any special relationship/privilege for Maori or for their modern descendants over non-Maori. And since there was no such thing as a properly functioning democracy either in England or in New Zealand in 1840, the question of “political rights” wasn’t an issue at the time. Are some people just trying to re-write the Treaty to suit their current agendas?
By discriminating against people on the basis of race, gender or sexuality, it dangerously undermines New Zealanders’ right to equality before the law.
But there can be no mature discussion about our future as a country until everybody accepts that the Treaty provided for the government to have final authority, with all citizens - no matter their ancestry - having equal rights.
We must stop being afraid to say it. This is not just wrong. It is corrosive. A separatist political model based on racial ancestry belongs in 19th-century South Africa, not 21st-century New Zealand.
Economic Impacts
PC1 is expected to have a negative impact on agricultural incomes (≈16–18%), with a significant impact on Waikato regional GDP.
1. Key quantitative points
1.1 Catchment level income impacts
Waikato Regional Council’s modelling of the decision version of PC1 found:
"Overall, there is potential loss of about 18% of catchment-level income in the long term scenario, and about 16% in the short term scenario."
These reductions arise from:
- Required mitigations (fencing, effluent upgrades, wintering changes, etc.)
- Reduced nutrient loss profiles (lower stocking, fertiliser changes, land use shifts).
1.2 Regional GDP context
A reasonable, evidence anchored inference from WRC’s modelling is that regional GDP impacts are likely in the low single digit percentage range, but concentrated in rural areas and service towns, where the effect is much more visible.
2. Timing of impacts
2.1 First 0–10 years (PC1 operative period)
- Main adjustment phase: Fencing, effluent upgrades, wintering changes, FEP development, audits.
- Income impact: WRC modelling suggests ≈16% reduction in catchment level income in this period.
-
GDP impact:
- Direct: lower farm operating surplus and reduced spending on inputs.
- Indirect: reduced demand for contractors, transport, rural retail.
- Partially offset by increased demand for environmental services (consultants, fencing, planting).
Court alignment: The Environment Court explicitly recognises “significant social and economic consequences” and the need to avoid “unrealistically short timeframes” that would cause “increased stress for land users”.
2.2 10–30 years
GDP profile:
- The largest marginal GDP hit is in the first decade.
- Years 10–30 are more about structural change than new shocks.
2.3 30–80 years (full Te Ture Whaimana horizon)
Net view:
A description of how the economic impacts on both the Waikato region and our national export income will occur, are set out below:
Total Negative Impact in Waikato region will be billions of dollars with the original PC1 documents quoting figures of $500 to $600 million dollars per year for the eighty year time frame of the proposed plan change implementation.
It must be remembered that these figures are from 2016 when PC1 was first proposed and they will be seriously increased given the level of inflation over the past ten years.
Overall it is expected to cost the dairy and drystock industries alone, losses of approximately $2.4 Billion dollars.
The impacts on both the security of our food supply and our export incomes from this are going to be huge.
Context on Waikato's dairy sector
- Regional economy: Dairy is the largest primary industry in the Waikato, constituting over 60% of the region's export earnings.
- Production: As of 2024, the Waikato region was home to 1.2 million dairy cattle, making it the largest dairy-producing region in New Zealand.
- Exports: New Zealand dairy exports contributed an estimated $25.7 billion to the national export revenue for the year ending March 2023, with Waikato as the top contributing region.
- 2025 financial year performance: Recent data shows that Waikato dairy farmers had a record-breaking financial performance in the 2025 financial year, with a 119% increase in average cash available after drawings for some farmers.
For the 2024/2025 season, the total value of the dairy payout for the Waikato Region is estimated to be approximately $4.8 billion.
Other notable statistics about the dairy industry in the Waikato include:
- Contribution to GDP: In the 2020/2021 financial year, the dairy sector contributed an estimated $10.6 billion to Waikato's regional GDP. This represents a significant portion of the region's total GDP, which was $29.2 billion in 2021.
- Export Earnings: The Waikato's dairy industry accounts for over 60% of the region's export earnings.
- Employment: Dairy farming provides jobs for over 9,000 people in the region, making it the largest employer within Waikato's primary industries.
- Production Volume: A 2024 analysis of the region's foodshed’s reported an annual milk production of 6.5 million tonnes.
- Export-focused: Only about 4% of the dairy products produced in the Waikato Region are consumed locally, with the rest primarily for export.
Waikato has about 4200 dairy farms, the most in the country and a 13% reduction in dairy farms means a loss of approximately 546 farms.
The cost to the region in lost GDP from a reduction of 13% in dairying is approximately $3.18 billion with an approximate cost of 2,700 jobs in the industry.
Key points about Waikato's beef production
- Major Production Area: The Waikato region is a significant beef-producing area in the North Island of New Zealand.
- High Number of Farms: Despite not having the largest number of beef cattle, Waikato has the highest number of beef-producing farms, with 2,436 in 2018.
- Large Red Meat Output: The Waikato region produces a substantial amount of red meat, with red meat production accounting for 51% of its food-producing land use.
- National Context: In 2018, New Zealand produced approximately 1.2 million tonnes of sheep and beef carcass, with a majority of this being exported.
For the 2024 calendar year, the total value of beef exports from the wider Waikato region was $1,176.6 million, as part of the total meat and meat product manufacturing exports and given the predicted 68% loss in drystock farms there is likely to be a reduction in this export value of approximately $799,680,000, coupled with a reduction in the number of farms by approximately 1,655 farms.
Summary
Treasury’s latest fiscal projections show deficits stretching indefinitely into the future. The government is borrowing just to pay the bills.
Treasury has warned that expenditure and debt must both be reduced to restore our financial sustainability.
Unless spending growth is restrained and debt begins to fall, we are headed for permanently higher interest costs and a reduced capacity to fund essential services.
Treasury’s long-term fiscal statements show that an ageing population and rising health and superannuation costs will drive debt above 50 per cent of GDP within a generation unless policy changes.
Given the current situation with our heavy debt loading and the need to either cut spending or increase our income, any serious reduction in our ability to export agricultural products has huge potential to cause us to slide further into recession.
The Ministry for Primary Industries reports that for the year ending June 2023, agriculture generated $48.9 billion in export revenue, representing 70% of New Zealand's goods exports, which were $74 billion.
Some examples of such NZ exports are: 95 percent of the dairy it produces; 87 percent of the beef; 94 percent of the sheep; 90 percent of the kiwifruit; 90 percent of the seafood; 85 percent of the onions; 86 percent of the apples; 85 percent of the wine and 46 percent of the honey.
The Government has stated that they want to double our primary exports to allow the income to bolster our financial position yet with the resulting effects of implementation of PC1 we will be looking at a reduction not an increase.
The basic fact is that if the Waikato Regional Council had at that time done an adequate economic analysis of the proposed plan change, it is highly likely that it would never have been put forward in its present form.
A Section 32 analysis is a mandatory evaluation under New Zealand's Resource Management Act (RMA) that assesses the justification, effectiveness, and efficiency of proposed changes to ensure they meet RMA goals.
Key Aspects of a Section 32 Analysis
The reason I state that PC1 should never have been put forward by the WRC is that the WRC’s section 32 analysis almost completely avoided any examination of the economic effects of the proposed plan change and as can be seen from even just a brief study, the plan change is going to have hugely significant effects on both the local and national economies.
The impact on the horticulture sector is such that under the rule changes that came into effect in October 2016 when the PC1 was advertised for public submissions, the horticulture sector will over time disappear from the Waikato region.
The total negative economic impact on the Waikato region comes about even though only 15 of the sub-catchments in the Waikato and Waipa catchments were exceeding the standards proposed to be introduced through the enactment of PC1 at the time it was proposed.
In other words there is going to be significant costs across the Waikato region with flow on effects across the country as a whole, for very little gain.
It can easily be seen from the above information that the impacts on both the security of our food supply and our export incomes from this plan change are going to be huge, yet the section 32 analysis that was carried out was so far removed from any type of economic study that it did more to hide the effects than to identify any possible detrimental effects.
In the original proposal the Waikato Regional Council stated that PC1 was the bold first step in an 80-year journey to improve the water quality of the Waikato and Waipa Rivers so they are safe for food gathering along their entire length and meet the requirements of Te Ture Whaimana o Te Awa o Waikato, the Vision and Strategy for the Waikato River.
Based on the information that was currently available, the Combined Stakeholders Group concluded full achievement of the Vision and Strategy by 2096 was likely to be costly and difficult. The 80-year timeframe recognised the ‘innovation gap’ that means full achievement of water quality requires technologies or practices that are not yet available or economically feasible.
The V&S clearly states that any plan to improve water quality in the Waikato and Waipa Rivers, must include the social, economic and cultural impacts that plan will have on the region if that plan is implemented.
The V&S has an aspiration to get water quality in those two rivers to historical standards yet at the same time the V&S realizes there must be a compromise and that’s where the social and economic clause fits in.
PC1 has not, particularly in regard to the section 32 analysis, adequately considered the social and economic effects on the region if the plan was implemented.
New Zealand produces enough food to feed about 40 million people but given our population is just 5 million most of this production is exported around the globe.
Whether we like it or not and whether we agree with it or not, it is an incontrovertible fact; Agricultural exports earn the majority of our income.
This is the reason why we need agricultural exports from NZ.