The low-down on Farm Management Plans

December 06 2017

As you’ll be aware from our article What does the Clean Water Package mean for farmers, raising the water standards in our rivers and lakes is going to have an impact on farm management. The government has charged the regional authorities with the job of implementing the water standards policy. These changes have already taken effect or are in process, so it’s important you’re aware of your obligations. Here’s what you need to know.

The core of the matter: reduce leaching into waterways

The main tool for reducing the amount of nitrogen and or phosphorous leaching from farms into waterways is the ‘farm management plan.’ On an individual basis, these plans will determine how a farm can be operated to ensure nutrient leaching is kept to a particular rate.

While there will be several elements to this, it’s likely each farm will be given a ‘nutrient budget,’ looking at the volumes of nutrients being introduced to the farm by natural means and otherwise. The budget will also examine how those nutrients leave the farm as finished products, such as meat, milk and crops. Alongside this, the budget will look at volumes of nutrients leaving the farm by leaching into rivers and waterways.

You can think of a farm management plan as a summary of the environmental risks that have been identified on your property and how to manage them to comply with the legal requirements of your local regional plan.

It’s likely you’re already engaged in developing a plan or aware that it’s about to happen in your region. Plans have different regional targets due to the fact that farming in every region has different factors that have an impact on the environment. These variations are determined by climate, soil types, intensity of farming and so on.

How plans will change buying and selling farms

As farm management plans have the potential to change the way a farming operation is run, they will become an important part of due diligence if you’re looking at buying a farm. In the past, much like buying any business, due diligence would focus on farming methods, production and profitability. There was little or no due diligence required with regard to the regional plan.

This adds two important steps to due diligence if you’re considering buying a farm. First, you’ll need to understand the rules in the regional plan, and second, you’ll need to obtain a copy of the farm management plan to see how it relates to the regional rules.

It will still be vital to obtain information about farming methods and production outputs. This information will have to be reviewed considering how the farm will be used in the future, and if there will be any restrictions on, or changes to, farming practices. It’s important to remember that any restrictions or requirements arising from the farm management plan may affect the cost of running the farm or the intensity of farming that is allowed to be carried out. These, obviously, will affect the bottom line.

Understand your regional rules

The farm management plan system, and the rules and restrictions that each regional authority will adopt and apply are all new. At this stage, nobody knows how they will all work in practice and what long term impact they’ll have on farming operations. Science, technology and farming methods are continually evolving. What is certain however, is that the human impact on environmental change will continue to be one of the major political issues of our time.

Whether you’re buying rural property, or are about to develop your farm management plan, it’s vital you understand your regional rules. More than ever, we’d urge you to speak to our rural lawyers if you have any questions or concerns.

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