Almost 40 percent of dairy farmers not meeting fertiliser reporting rules

Almost 40 percent of dairy farmers are not meeting the legal requirement to report nitrogen fertiliser use, with the associate environment minister saying he would be amazed if anything was done with the data.

In answer to written parliamentary questions in June, Andrew Hoggard said 61 percent of farmers reported their nitrogen fertiliser use in 2024/25.

A cap on nitrogen use (known as N-cap), which limits how much synthetic nitrogen fertiliser livestock farmers can use and requires dairy farmers to report their use, came into into effect in 2021 as part of the previous Labour government's bid to improve freshwater quality.

Nitrogen fertiliser boosts pasture growth, allowing farmers to stock more cows. More intensive stocking leads to highly concentrated nitrogen patches from cow urine that can leach into ground water, while nutrient run-off enters waterways, accelerating algae growth that sucks up oxygen, affecting aquatic life.

Nitrogen is also the source of one of the most potent and long-lasting greenhouse gases, nitrous oxide, which is primarily created by soil microbes converting excess nitrogen into gases, according to the New Zealand Agricultural Greenhouse Gas Research Centre.

The amount of synthetic nitrogen fertiliser applied to agricultural land increased by 533 percent between 1990-2024, largely driven by the growth and intensification of dairy farming, according to the government's latest greenhouse gas emissions inventory.

In the N-cap rule's first year (financial year ending June 2021), 47 percent of farmers complied with the reporting requirement and 70 percent the following two years, according to Te Uru Kahika, the organisation representing the country's 16 regional councils that commissioned the N-cap web reporting tool.

Te Uru Kahika freshwater director Christina Robb said, by 2024, when compliance dropped to 61 percent, central government had raised the possibility of removing the reporting requirements, and "less effort by councils and the primary industries went into following up non-reporting".

She said councils supported the cap, but "generally viewed the reporting requirements to be complex, particularly as synthetic nitrogen use is only one factor in nitrogen losses from farms".

Of the farmers who reported their fertiliser use, compliance with the limit was high.

Across all years, Robb said about two percent of farms reported exceeding the cap, although some were found to be errors.

In a statement, Hoggard said, while only 61 percent of farmers met the reporting rule, compliance with the cap itself was good.

"The majority of dairy farms did file reports and, from the reports received, barely one percent had exceeded the nitrogen limit," he said. "I understand that per-hectare nitrogen use is coming down across the industry and especially in key dairy regions, as farmers focus on being more efficient.

"With the price of fertiliser, farmers certainly don't have any incentive to waste it."

Hoggard, who is also associate agriculture minister, said most data came from information collected by fertiliser companies, but for farmers not already in those systems, reporting obligations could be a burden.

Asked by Green Party MP Lan Pham during Scrutiny Week if he was concerned by compliance levels, Hoggard expressed scepticism about the usefulness of the information collected.

"To be brutally honest, I would be amazed if anything's actually done with these reports, you know? It takes a hell of a lot of time and effort to go through and fill out all this information, and quite frankly, I think it just goes and sits in a storage room somewhere."

He told the committee there was "a lot of water to go under the bridge", before a decision was made on repealing the requirements, but price had been a far bigger driver of nitrogen reductions.

Pham said compliance figures were significant at a time when the government was "in the process of taking the brakes off intensive farming", as part of resource management reform and a shift towards farm plans over resource consenting,

It also followed the Canterbury Regional Council's declaration of a nitrate emergency late last year and breaches of the legal limit for nitrate in drinking water in council-supplied water in Gore in July 2025 and in Waimate in 2024.

Latest figures showed the Canterbury Regional Council had granted effluent consents allowing for up to 57,000 more cows since a temporary freeze on dairy conversions expired in January last year.

The Ashburton District Council allocating more than $2 million dollars towards nitrate management and finding alternatives for a water supply expected to breach the maximum nitrate limit in the next 3-5 years, and Selwyn District Council allocating hundreds of millions of dollars to switch to lower nitrate sources showed the economic cost of not taking action, Pham said.

"We already know the issues, they're well documented and well experienced by, not only communities across Canterbury, but across the country, where they can no longer safely swim in their rivers or lakes.

"These rules - or lack of compliance with these rules - have real-life implications for our natural environment and it's simply not good enough to just dismiss it as, 'Oh well, the system's not even working',"

Part of the National Environmental Standards for Freshwater, the N-cap is one of the rules that could be removed as part of sweeping changes to the Resource Management Act.

In a 2025 discussion document on the proposed changes, the Ministry for the Environment consulted on three options to "improve" the cap - repealling the 190 kg/hectare limit, removing the requirement to provide receipts (which it called onerous and "unnecessary, because councils do not use the information provided") and lining up reporting dates with the farming calendar.

Administrative changes had already been made in response to "low reporting compliance and unreliable reported data" in the rule's first year, resulting in improvements, the document stated.

"However, implementing the nitrogen cap has been a work in progress and concerns about the reliability of reported data remain," the document said.

The document specifically asked whether the cap should be scrapped on the grounds it might have "already served its purpose".

Dairy NZ and the New Zealand Fertiliser Association submitted that they wanted to see the regime retained, at least until farm plans could take its place.

Fertiliser Association chief executive Vera Power said the organisation wanted to see changes to simplify the system, but felt repealing the rule completely would undermine work already done.

She said most farmers were complying and fertiliser companies had made significant investments in digital apps to support reporting.

Power did not believe much thought had gone into the scheme when it was conceived, it had not been well publicised and there were concerns about how statistics were gathered.

While the cap had helped change farmer's behaviour, it might not have improved environmental outcomes, if farmers responded by using more supplemental feed or growing a larger cropping area, she said.

"It's one of the dangers of input controls, because you get these slightly perverse outcomes."

Power anticipated the reporting requirement would be rolled into farm plans.

"It's a big ask for farm plans in terms of what we're hoping they will do, but it certainly could present a more useful vehicle for managing environmental impacts."

Dairy NZ policy and government relations general manager Roger Lincoln agreed the rule should be shifted to the proposed farm plans, "if they can deliver the same or better environmental outcomes".

In its submission on the freshwater management reforms, DairyNZ was not opposed to retaining the N-cap, but wanted to see a reduction of reporting and compliance costs through much needed changes, including to the way the cap was applied, removing the receipt requirement and altering reporting timeframes.

An Environment Ministry spokesperson said it was not taking steps to improve compliance, which was the responsibility of councils, or to improve data quality, which also lay with councils and the fertiliser companies whose automated systems provided almost 90 percent of the reports submitted.

The Environment Select Committee is expected to report back later this month on the National Environment and Planning bills that will replace the Resource Management Act. It was granted a four-week extension, as it contended with the complex legislation and tens of thousands of submissions.

The Canterbury and Waikato regional councils did not respond to requests for comment. Te Uru Kahika was unable to provide regional breakdowns on compliance or cost details before deadline.

In June, RNZ revealed the Ministry of Health launched a review into the health effects of nitrate in drinking water at the start of the year, following recommendations to the Danish government that it should lower its legal limit for nitrate in drinking water by 90 percent, due to potential health risks.

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