March 8, 2016

In an effort to decrease environmental impact and increase profitability, New Zealand’s state-owned farming company, Landcorp, will cut back on original plans to convert formerly forested land to 39 dairy farms. Since 2004, the company has developed 13 farms, running 17,000 cows across 6,400 hectares, on land leased from Wairakei Estate in the central North Island. However, a prolonged drop in milk prices and environmental concerns related to the project have led Landcorp to take significant steps to reduce its dairy footprint and find alternative uses for the 14,500 hectares of forested land so far undeveloped.

"Under the new plan, the land leased from Wairakei Estate would be used for dairy (irrigated and dryland), dairy support, sheep milking and other potential uses being investigated," Landcorp said, reports Scoop.

The decision to scale back is expected to result in a savings of between $25 million and $35 million for the company, which recently forecasted a loss for the 2016 year of between $8 million and $12 million, and which is not expecting to pay a dividend to the Crown for a second year in a row. The decision is also being applauded by environmentalists as it will reduce the risk of sediment loss, and nitrogen leaching.

"Landcorp's strategy is to connect the food we produce on our farms with high value consumers around the world under our new P?mu brand," Landcorp chief executive Steve Carden said in a statement, reports the New Zealand Herald.  "To do that, we need to exceed their expectations about how that food is produced, whether it is the standard of care for the animals, the people who work on the farm, or the environmental impact of producing that food," he said.