Waikato's controversial Plan Change 1 has reached another legal milestone, but its economic consequences remain fiercely contested. Andy Loader argues that the drive to improve water quality risks imposing unsustainable costs on farmers and vegetable growers, threatening food security, rural communities and New Zealand's export economy.
en years after it was first notified, Plan Change 1 has been confirmed by the Environment Court.
In June, the Environment Court issued its final decision on the plan change, subject to agreement on 20 specific changes being made by the WRC. The WRC has now been advised that the final version of PC1 “complies appropriately with all of the directions made by the court”.
There are still outstanding High Court appeals to be resolved, but once the appeals have been settled by the court, the WRC will confirm PC 1 as part of the operative Waikato Regional Plan.
The Government has recently changed the Resource Management Act and with the new replacement legislation they have put a hold on parts of PC1. The need for farm environment plans and associated consent deadlines have been put off until 31 December 2032, but minimum farming standards and controls on land-use change and intensification remain.
PC1 was designed with an 80-year timeframe which would give improved water quality in the Waikato & Waipa Rivers; make them safe for food gathering along their entire length and meet the requirements of Te Ture Whaimana o Te Awa o Waikato, & its legislated Vision and Strategy.
PC1 was developed by a collaborative stakeholder group which was appointed by the WRC to represent sector, industry and community interests. Although there are many who at the time & still do, claim that this group was far from representative of them and their views.
The current discussions in the media & elsewhere don’t take into account the work already voluntarily undertaken by the farming industry. A Large percentage of what was required under the initial PC1 proposal has already been achieved an example being the Lake Waikare/Whangamarino catchment, where the Waikato Regional Councils own water quality data shows that the water going into the wetland from the farming areas above is actually better than the receiving waters.
The real reasons PC1 has been put on hold, are the same reasons why many people objected to the plan being accepted by the Elected Members of the Waikato Regional Council fifteen years ago.
To understand the issue, we need to go back to the beginning on how PC1 came about.
Around 2010 an agreement was made between the Crown and Fiver River Iwi on the future of the Waipa and Waikato Rivers. This was a Treaty Settlement agreement. To enable the agreement to proceed, the Waikato River Authority was created.
The authority mission statement was developed under the title of Vision and Strategy for the Waikato and Waipa Rivers. The backbone of the Vision and Strategy document is that the water quality must improve over time in both rivers.
Section (3) of the Vision sets out the 13 objectives to realize that vision and the following are what we believe to be the main objectives:
(3) (a) The restoration and protection of the health and wellbeing of the Waikato River:
(3) (d) the restoration and protection of the relationships of the Waikato Region’s communities with the Waikato River, including their economic, social, cultural, and spiritual relationships:
(3) (k) the restoration of water quality within the Waikato River so that it is safe for people to swim in and take food from over its entire length:
I believe the Vision and Strategy document which was very well written, sets out a vision for the future where a healthy Waikato River sustains abundant life and prosperous communities who, in turn, are all responsible for restoring and protecting the health and wellbeing of the Waikato River, and all it embraces, for generations to come.
Once the Vision and Strategy was adopted, the Waikato Regional Council was tasked with formulating a plan to allow the region to fulfill the Vision and Strategy objectives.
To do this WRC brought about thirty people together to produce a plan. This group was called the Collaborative Stakeholders Group.
This plan was labeled Plan Change One (PC1). After about two years and about ten million dollars, the plan was presented to the Elected Council for them to vote on accepting the plan.
The plan presented was so controversial that seven Elected Councilors voted against it and seven voted for it.
The Chairperson of the Council at the time used her casting vote to move the plan to the next stage. From when the Council accepted the plan until the present day, the plan has been in dispute and something like $100 million dollars has been spent collectively trying to sort the mess out.
In June this year, the Environment Court issued its final decision on the plan change.
Parliament recently passed new Planning and Natural Environment legislation and as part of that process made the decision to push PC1’s deadlines for farm environment plans and farming consents out to 31 December 2032.
So, what is the problem?
The Vision and Strategy document clearly says that the health and well-being of the rivers must be restored and protected, but whilst doing so we must take into account the economic, social, cultural, and spiritual relationships with the river.
We do not believe that the Collaborative Stakeholders Group placed enough emphasis on these objectives in the Vision and Strategy document.
Instead they demanded that the rivers become swimmable quality within 80years.
The 80 year timeframe was invented by the collaborative stakeholders group even though there was no timeframe ever included as part of the publically consulted Vision & Strategy document.
That 80 year timeframe was an unrealistic goal which has since been shown would have put the entire region and country at a serious risk economically and socially. The objective is too tough if not impossible.
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 have become legally enforceable.
Local Government New Zealand commissioned a report on the impact of PC1 on the Waikato region and the end result of the implementation according to that report was that 68% of Sheep & Beef farmers and 13% of Dairy farmers would leave the agricultural sector.
WRC in their initial costing of the implementation of PC1 predicted that the cost to the agricultural sector in the Waikato region alone would be $500 to $600 million dollars per year for the eighty year time frame of the proposed plan change implementation.
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.
The Environment Court explicitly recognised “significant social and economic consequences” and the need to avoid “unrealistically short timeframes” that would cause “increased stress for land users”.
Waikato Regional Council’s own modelling of the final 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.”
Many organizations had realized these problems early in the process but even after much discussion Waikato Regional Councilors and the Waikato River Authority totally ignored these concerns.
We were told the Vision and Strategy is above the law and an agreed Treaty Settlement, yet those agencies that are responsible for implementing the agreement do not see where they had failed their ratepayers and taxpayers.
Only after a huge effort by many people belonging to various organizations, the present Government has now accepted the failure of both the Waikato Regional Council and the Waikato River Authority to adequately address all of the relationships, such that they have placed a hold pause on the process in relation to farm environment plans and farming consents.
The legislation, passed under urgency before parliament rose for the year, means farmers will not be required to prepare, implement and maintain a PC1 Farm Environment Plan or gain resource consent before 2033.
Koi Carp are destroying our waterways, and we need to get serious about tackling them.
Given the known effects of Koi Carp, which cause a huge reduction in the water quality, it is clear that even if farming was eliminated completely there would still not be an improvement in the levels of water quality in the waterways due to the effects of the Koi Carp.
Arguably the largest contributor to sediment loading in the rivers is 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. They also cause massive erosion of the banks of the waterways.
Koi carp cause habitat loss for plants, native fish, invertebrates and waterfowl.
But the problem is that even though we have known about the issues of Koi Carp since back in the 1980’s, there has never been a strategy put in place to deal with the problem which clearly identified the actions required to either control or eradicate Koi Carp.
There is no known effective method available to eradicate Koi Carp worldwide that does not have further implications for the native flora and fauna and therefore it is accepted in nearly all jurisdictions that Koi Carp are a problem that we have to accept are established in our environment.
I believe that most people from government Ministers down to individual landowners understand that with current technologies available we are only able to greatly reduce the overall numbers and will never be able walk away saying that the problem is solved.
Koi Carp are going to be a permanent feature of water management in New Zealand until there is a new technology developed somewhere in the world which allows for the safe eradication of the species without causing undue harm to native flora and fauna.
Given the above details it is imperative that we act as soon as possible to either control or eradicate the Koi Carp before they cause further damage and loss of native flora and fauna and erosion of the waterway margins.
Food security and Economic disaster.
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.
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
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.
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.
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
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”).
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.
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.
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
Most capital adjustments are complete; farms operate under new nutrient and land-use constraints.
Income remains below the “no-PC1” baseline (WRC long-term estimate ≈18% catchment-level income loss), but:
Technology, genetics, and management improvements can claw back some productivity.
Land-use change (e.g., diversification, horticulture, forestry) can partially offset losses.
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)
PC1 is only the first 10-year step in an 80-year programme.
Subsequent plan changes will likely tighten limits further, but:
By then, the region’s land-use mix and technology base will be very different.
Early investments (riparian, erosion control) will be fully amortised.
Net view:
The economic cost curve is front-loaded;
Long-term, the region benefits from:
Avoided degradation costs
Improved ecosystem services
Stronger cultural and tourism values.
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.
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.
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.
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.
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.
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 main reason why we need agricultural exports from NZ.