The Costs and Benefits of Effluent Management Compliance in the Waikato Region of New Zealand

Dairy farming in the Waikato Region has contributed greatly to the reduction of water quality. Part of this is attributable to the issue of inappropriate disposal of dairy effluent. Regional authority data shows both costs and benefits of complying with effluent management regulations. Private costs result from system and management improvements, while private benefits are largely due to reduced fertiliser requirements. Decreases in the volume of 'non-compliant effluent', resulting from improved compliance, are used as an indicator to illustrate reduced environmental effects. The benefits of becoming compliant outweigh the costs for half the farms analysed. More incentives are required to promote compliance from the other farms although their environmental effects are generally smaller.