One possible solution to the problem of declining water quality is to encourage farmers to voluntarily adopt measures which reduce the detrimental impacts of non-point source discharges. The ‘encouragement’ can take the form of targeted information campaigns to address possible information asymmetries or more concrete incentives such as rate relief or remission of Council fees for farmers who undertook extensive mitigation. This is considered to be a slight variation from the current policy response as minimal incentives are currently provided to farmers.
Effectiveness
Farmers are most likely to voluntarily adopt measures if they receive tailored information from people considered to have knowledge about farming and are provided with incentives to act by Regional Councils. The question arises as to how effective such an approach would be.
In the Clean Streams Accord, Fonterra have established specific priorities for action including: to exclude dairy cattle from streams, rivers and lakes and their banks; construct bridges or culverts for farm races where stock cross a watercourse; appropriately treat and discharge effluent in accordance with regional plans and resource consents; and to create systems on all dairy farms to manage nutrient inputs and outputs. Farmers have been criticised for failing to meet these objectives within the established timeframes, particularly the target to comply with regional plans and resource consents when discharging dairy effluent.[1] This suggests that reliable information provided by a farming organisation will not result in a quick and widespread voluntary uptake of measures.
Overall, voluntary action is not considered to be an effective policy response. Based on previous cases it is likely that mitigation measures will not be implemented to a great degree or extent if reliance is placed on voluntary action by farmers. This outcome will of course vary amongst regions depending on degree of incentives offered and the quality information made available.
Equity
From the perspective of the general public voluntary action is not an equitable way to deal with the issue of deteriorating water quality. Farmers have caused the deterioration in water quality and should be responsible for remedying the problem. The voluntary approach allows farmers to continue on ‘business as usual’ and potentially not take any action. Voluntary action is considered to be an inequitable policy response.
It could be argued that if farmers are forced to take action then this is unfair as farmers did not know that what they were doing had negative impacts on water quality. Even if it was accepted that farmers did not realise that their actions degraded water quality in most cases their actions were still illegal. The lack of enforcement or knowledge does not make actions legitimate. Parallels can be drawn with strict liability offences where ‘intent’ is not an element of the offence.
Costs
If tailored information is going to be provided to each farmer then qualified personnel with knowledge of the farming industry will be required. The necessary increase in human resources could be funded by industry groups, Regional Councils and the Ministry of Agriculture and Forestry. If twenty people were employed to undertake this role for a salary of $50,000 a year then this would cost $1,000,000. It is difficult to estimate the cost of rate relief or remission of fees by Regional Councils because it depends how much reimbursement is to be provided. Regardless, it is clear that voluntary action involves high costs if incentives are widespread and tailored information is to be provided.
Externalities and risk
The most significant risk associated with adopting a voluntary based approach is that there will be slow uptake of mitigation measures and only some will be adopted.