Plan Change 1 aims to improve water quality across the Waikato, but Andy Loader argues its economic and social consequences have not been adequately considered. From rising compliance costs and threats to farming and food production to the impact on rural communities and exports, he questions whether PC1 is workable or affordable. He also argues that major contributors to declining water quality, particularly koi carp, remain inadequately addressed.
Background to This Statement
Plan Change 1 was first developed and set in motion by means of the casting vote from the Chair back in 2016. Since that time there seems to have been an assumption that the farming industry has been opposed to the plan change, and we believe this assumption is not correct or justified in any way.
Whilst we are opposed to PC1 in its present form, we are not opposed to the aim of improving water quality. We just do not see how New Zealand can possibly afford to go down this path either economically, socially or culturally.
For those reasons we make this statement to the Government setting out our beliefs in relation to the aims behind Plan Change 1.
Reason For
PLUG, along with the farming industry and the rest of the New Zealand population, wants to see improvements made to the water quality in the country's waterways and, in the Waikato, particularly related to PC1.
Water is a basic necessity for all life and, as such, we all need and want to get a supply of clean potable water to maintain life, and the aim behind PC1 may help to achieve this result.
Reasons Against
PLUG, in support of the farming industry in the Waikato Region, is opposed to PC1 in its current form but not opposed to the basic aims of the plan change.
Let's be abundantly clear on this:
"We All Want Clean Water".
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, and it is expected PC1 will be operative next year.
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.
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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 and 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
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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".
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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 and reporting — is significant, as reflected in Schedule D3 and related directions.
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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 New Zealand 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 are 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 and 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 and 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 and 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 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
Iwi input will influence where development can occur, especially around:
- wāhi tapu
- cultural landscapes
- freshwater bodies
- geothermal areas
Iwi positions may shape environmental limits that constrain rural land use.
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?
Economic Impacts
PC1 is expected to have a negative impact on agricultural incomes of approximately 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 and 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 and audits.
- Income impact: WRC modelling suggests approximately 16% reduction in catchment-level income in this period.
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GDP impact:
- Direct: lower farm operating surplus and reduced spending on inputs.
- Indirect: reduced demand for contractors, transport and rural retail.
- Partially offset by increased demand for environmental services — consultants, fencing and 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 is 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 80-year timeframe 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.
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 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: 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 reported an annual milk production of 6.5 million tonnes.
- Export-focused: Only about 4% of dairy products produced in the Waikato Region are consumed locally, with the rest primarily for export.
Waikato has about 4,200 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.
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 New Zealand 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.
Section 32 Analysis
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 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.
And in the ten years since PC1 was first introduced, the farming industry in the Waikato Region has continued to improve their environmental footprint as a result of their farming operations.
In other words, there are 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 realises 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.
Impacts From Introduced Pest Fishes
PC1 has not adequately considered the effects on the region from pest fishes if the plan was implemented.
Given the known effects of Koi Carp, which cause a huge reduction in the water quality of the region, it is clear that even if farming was eliminated completely from the region there would still not be an improvement in the levels of water quality in the region due to the effects of the Koi Carp.
Yet in all of the time that PC1 has been around, since 2016, the Waikato Regional Council through PC1 has been totally singularly focused on the agricultural industries as being the cause of the reduced water quality in the region, without addressing the effects of Koi Carp.
From the council figures, we know that 39 percent of Nitrogen and 55 percent of Phosphorus comes from other sources than farming. The facts are that, yes, farming is a contributor, but it is not alone, yet PC1 focuses solely on farming as the source of contaminants in the waterways and yet this is provably wrong.
Seven percent of the N and 18 percent of the P comes from point sources and the balance — 32 percent N and 37 percent P — is from natural sources.
Arguably the largest contributor to sediment loading in the rivers is ignored in this plan change — KOI CARP!
When they feed they stir up the bottom of ponds, lakes and rivers, muddying the water and destroying native plant and fish habitat. Koi Carp are opportunistic omnivores, which means they eat a wide range of food, including insects, fish eggs, juvenile fish of other species and a diverse range of plants and other organic matter.
They feed like a vacuum cleaner, sucking up everything and blowing out what isn't wanted. Aquatic plants are dislodged in the process and are unlikely to re-establish. Koi Carp cause habitat loss for plants, native fish, invertebrates and waterfowl.
When we try to raise the issue of Koi Carp affecting water quality we are commonly told that this is just a regional problem that is Waikato's problem to deal with.
But in fact this is demonstrably untrue. The effects will be felt severely across the nation as a whole given the impacts that PC1 will have on our agricultural production and consequently our export income from the Waikato region.
It should be emphasised that even though we are talking about the impacts from PC1 in our economic comments, these impacts will continue due to two things:
- The legal requirements under the Waikato Settlement Act for the WRC to control water quality.
- The ongoing effects on water quality not being dealt with adequately under PC1, until Koi Carp are controlled.
Until some method of control is found related to Koi Carp, the water quality will continue to decline and, under the requirements of the Waikato Settlement Act, the Waikato Regional Council will still be required to take action to try to improve the water quality, which will mean further impacts on the users of the waterways and the land surrounding the waterways.
Currently it is understood that at present the WRC have spent approximately $50 million and the agricultural industries affected have spent approximately the same amount to get to the current position in relation to PC1.
Total: $100 million.
And not one dollar of that has been spent on controlling Koi Carp.
Not one Koi Carp has been killed, yet if there had been just a quarter of that amount spent on a bounty of one dollar per fish we could have seen the removal of up to 25 million Koi Carp, and consequently a huge increase in the water quality of our waterways.
Overall Outcomes
PC1 is likely to significantly change how farmers can operate regardless of whether they are arable, dairy, drystock or horticulture.
It is believed that a certified Farm Environment Plan which meets the requirements of PC1 will be needed for all farms, and such plans will require farmers to change some practices and/or adopt new mitigations to reduce diffuse discharges of nitrogen, phosphorus, sediment and E. coli, irrespective of the fact that farmers, growers etc. are currently well on track to limit adverse effects from utilising the farming areas for food production.
Farmers will need to comply with minimum standards for stock exclusion from permanent and intermittent drains and streams, fertiliser application, cultivation, races, culverts, gates etc.
There is huge concern that many of these standards or timeframes are currently not practical or implementable whilst still maintaining economic viability of the farming operation, yet they will be legally enforceable.
Irrespective of whether farming operations are a permitted or consented activity, they will be subject to ongoing scrutiny as council monitors compliance with permitted activity rules and consents, and will need to budget for ongoing costs to implement mitigations as part of any requirements in their Farm Environment Plan or resource consent.
The impacts on both the security of our food supply and our export incomes from this are going to be huge.
There are many other downstream effects from PC1 which need to be taken into account, such as:
a) Discouraging potentially environmentally sustainable farm business growth, which in turn drives economic and employment growth.
b) Consequential negative economic impacts on small rural towns, which have already suffered significantly from rural depopulation and the erosion of community and social services.
c) The demise of smaller rural communities within the affected catchments, as farmers are forced off their land through a lack of financial sustainability.
d) Increased pressures and stress.
e) Closure of community facilities and schools.
f) Closure of community stores that support local communities.
g) Loss of local sports teams.
h) Loss of community spirit.
i) Loss of capital value of land.
If the claims of the decline of small rural towns and consequently the increased growth of the main centres are correct, and exacerbated as expected under the enactment of PC1, then pollution from these other sources — e.g. stormwater and effluent discharge from urban areas — is only going to grow as a percentage of the total discharges.
Summary
PLUG and the farming industries are not opposed to ensuring there is improvement in water quality across all of the waterways in the region, but we need to ensure that PC1 is practicable, workable and fit for purpose so we ensure the economic stability of our country and protect the security of our food supply.
Irrespective of the fact that farmers, growers etc. are currently well on track to limit adverse effects from utilising the farming areas for food production, PC1 will not achieve the desired result of improved water quality until we develop some method of controlling the impacts from introduced pest fishes, particularly Koi Carp.