Growers warn vege prices will soar if production not priority in freshwater reform

New Zealand's vegetable sector is urging the government to make commercial vegetable production a "priority of national significance" in its impending freshwater regulations.

The government is considering its freshwater national direction while it progresses reforms to the Resource Management Act and changes to the National Policy Statement Fresh Water Management (NPS FM).

The NPS FM has undergone a number of iterations since it was first introduced in 2011 - and the latest 2020 version was one of four pieces of national direction for managing New Zealand's freshwater.

However, a new report by the New Zealand Institute of Economic Research - commissioned by industry group Horticulture New Zealand - said a new approach to national freshwater policies was needed, as current rules were constraining commercial vegetable production.

The Making the Economic Case for Vegetable Production in New Zealand report warned that without a national direction for vegetables specifically, consumer prices for the fresh produce would skyrocket because of reduced supply and continued demand to feed New Zealand.

Hort NZ general manager of strategy and policy Michelle Sands said 80 percent of the vegetables grown in New Zealand were for the domestic market, not export-bound as with other primary sectors.

"The difference in consequences for vegetable production compared to other activities, which also face complicated rules, is the consequences for New Zealand. Because unlike the rest of the primary industry - meat, milk, apples, kiwifruit - which are predominantly for export, vegetable production is for a predominantly domestic market.

"So if we constrain our supply, we can't meet the demand of New Zealand consumers and the price spike," she said.

The report said the price of broccoli could go as high as $9 a head if production was cut by 20 percent as a result of proposed regulations aimed at reducing nitrogen run-off.

Sands said to avoid this, the government must prioritise commercial vegetable growing because the supply of vegetables should not be put in jeopardy.

"While the government is moving to change freshwater regulations, we encourage it to move further and faster to safeguard the small but irreplaceable commercial vegetable sector to provide a secure supply of affordable healthy vegetables."

The report echoed warnings that the sector would shrink under current rules.

"The impact on vegetable production is not proportionate to vegetable production's national importance," report authors said.

"The different rules that have been developed and applied in different catchments under the NPS FM 2014/2017 will significantly reduce vegetable production and it is not clear that under the implementation of the NPS FM (2020) there is sufficient direction around national priorities for this trend to change."

Regional effects

National direction around freshwater informed regional land use rules, many of which the report said "created costs and uncertainty and [was] making vegetable production unviable or marginal in some regions".

It said councils generally controlled nitrogen through blanket rules that limited nitrogen outputs per hectare - and they were "agnostic about the contribution towards national priorities from different land uses".

The authors said while vegetables had relatively high nitrogen leaching, their contribution towards the total catchment load was "mostly small" compared to other land use activities.

Under the RMA, contaminant discharge allowances were allocated without reference to national priorities.

Sands said regional councils had to consider making trade-offs between local effects of land use and the national importance of stable vegetable supply - and restricting vegetable production was an unintended consequence.

The report said proposed regional council rules like planned changes in Waikato and Horowhenua illustrated that vegetable growing lacked a "permitted activity pathway", when compared to other farming activities like pastoral farming.

"If vegetable production is not given national recognition, regional freshwater planning rules... are likely to reduce commercial vegetable production... This is despite the importance of the national vegetable supply (a large human health cost) and the small contribution vegetable production makes to the nitrogen load for most catchments," the report said.

Sands said certainty around national regulations would give local decision makers better guidance on how to manage natural resource allocation.

The National Party made an election promise to make vegetable growing a permitted activity under the RMA within a year - but Sands said it was not addressed within freshwater reforms, and no commitment had yet been made.

However, RMA Reform Minister Chris Bishop said vegetable growing was being looked at as part of the national direction changes, expected to be in place by mid-2025.

"The government is considering changes to the regulatory requirements for vegetable growing as part of its review of the NPSFM and the broader ND programme," he said.

"There will be more to say on this in early 2025."

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