Orete No. 2 and Other Blocks Incorporation, Eastern Bay of Plenty
Farming has long been a way of life for Orete - a Māori incorporation with 1,500 owners on the tip of the remote East Cape. Te Taiao is at the heart of all they do, including finding ways to keep their agricultural greenhouse gas emissions down.
Over time, you tend to understand where your destiny lies. And I think with us as Māori, the lure of home is always part of it.
If you talk to any Māori, wherever their home is, it’s the most special place in the world. Um, what makes it special? Memories, connections. Obviously, our whakapapa, and these lands.
Waihau Bay is approximately 110 kilometers east of Ōpōtiki. We're at that tip that goes around to what they call the East Cape, Te Araroa area. This is land that was populated by our people a long time ago.
In recent times in farming, probably the last 50 odd years, sheep and beef was a primary land use after the land was cleared. And then we moved into dairy.
So it's multiple layers. We have a main dairy farm up at Waihau Bay itself, we have a second dairy farm at Whangaparāoa / Cape Runaway. The kiwifruit we started in September last year. We grow and harvest trees within an area of 2786 hectares. We have a road engineering and road construction company called Te Ranginui Group Ltd. We have the Waihau Bay Lodge... there's a lot of work on.
In the late 2006 / 2007 period, we had a failure with our hoses, and our effluent pump, which resulted in effluent being pumped out onto the ground, which seeped into waterways.
The creek got polluted, and that was huge in the district. It, it had a huge impact in that it got everybody talking, you know. So that's a good thing because people don't want that to happen again, whether it be Orete or whoever.
I just thought they've got guys with all the technology; they’ll fix that up. Until I saw in the paper that they got a dirty big fine. But, lesson learned.
SHANEEN SIMPSON ALMOND
We engaged with the regional council, the person we dealt with was Māori and he knew how it was that we could co-exist in the current environment, without it costing us too much but it relied on us putting some effort into what it was that we were doing.
And then we engaged with another expert who was all about effluent and how we managed that on the farm. And to be honest, that changed my view of compliance and how it is that we can better work with regulators.
We're not scientists at the end of the day, and we do need to rely heavily on the experts.
We paid our fine. And then we took from that the learnings that you needed to take, to be honest. You know, it was probably an appropriate time for us to start thinking, well, Christ, you know, what are we doing here? You know, what is our role here? What is our responsibility here?
And I'm not saying we never took that role seriously beforehand. But I think it just highlighted a need to prioritize in those areas around environmental.
I get to talk to Dane at least once a week, and he’s always going on about how Orete’s business affects our natural environment. So that's really important to me.
Because, um... Why me?
I’d like to see it all go away and us go back to when we were kids.
But that's a... that's more of a...what's the thing? An emotional thing.
Why? Because if we don't look after what we've got, we're not going to have a very good...we won't call it an asset. Our whenua is not going to be any good for our tamariki and for our mokopuna.
We can’t abuse the hell out of it. And then say the next generation’s coming, they can fix it.
Sometimes you can work on your farm, and work, you know, from the gate to the other gate. But if you consider the impact that you have outside the gate, then it becomes a totally different scenario.
We've been involved in a greenhouse gas emissions project. So we're currently working through that – how we can reduce our greenhouse gas emissions.
Out of that has come an understanding of what...what our responsibilities are. What trends have occurred over time?
SHANEEN SIMPSON ALMOND
As a farm in an isolated area, we're just doing the day-to-day business. Now when we start talking about greenhouse gases, that actually requires a board to forward think and plan around what your business might look like in the short, medium and long term.
And to be honest, I think our board, the committee, are just starting to come to terms with what that looks like. Because we don't know what we don't know until somebody says, hey, do you realize that there's this protocol going on and you need to line up with it? Which is in a lot of ways a bit of a shock for us, because we're still dealing with the issues, the day to day issues.
Now we've got a bigger view around our contribution or how is it that we reduce our greenhouse gas emissions from our farm and our activities that we run around the coast.
So yeah, I think it's one of those global issues that we're not necessarily aware of until somebody comes to us to remind us that, yeah, there's a protocol. And, what are you doing about it Orete?
I'm looking at my committee. We go to the committee and they're like, well, what are we doing about it? And that's when we engage with expertise, the experts, to tell us – these are some of your options, this is what your gas emissions look like currently.
So we do the assessments. It gives us some navigation points around how we might manage ourselves in the future.
Do I like the idea of paying for emissions? No. Is it necessary? Probably.
What will it force farmers to...or force the agricultural industry to make the necessary changes? Probably.
Bottom line will always be a consideration. You know, we're responsible for the assets of a company, so we have a responsibility around maintaining in and growing the assets of that company.
But I also feel that we've taken a stronger interest in the environmental side, and the community side of our responsibility. And our community is us.
We're taking a more proactive focus on making sure that we're an active community member. And I'd like to think in the future we’ll be active community leaders in that environmental space.
What we do here affects our land as anywhere else, our waterways.
And here we are on the coast, so everything goes into the sea. And that's our pantry.
So we do... we do have to be...mindful of what we're doing.
So we have something to leave for the next generation, something that's clean and green and healthy.
Orete No. 2 and Other Blocks Incorporation ('Orete’) is a Māori Incorporation in Waihau Bay, a remote coastal community just over 100km east of Ōpōtiki in the Bay of Plenty.
Orete was created in early 1953 through an amalgamation of land blocks within the rohe of Te Whānau a Pararaki hapū (mai i Ngutuone ki Mangatoetoe) and Te Whānau a Apanui iwi.
In the early days, the whenua was farmed as a sheep and beef operation. In the mid-1970s, the Trustees at the time foresaw the need for growth and diversity and converted to dairying (‘Main Farm’).
A second dairy farm, at Whangaparaoa, was purchased in the mid-1990s (‘Cape Farm’). The original owners of this block were also beneficial owners in Orete and the farm purchase was made to keep the whenua in whānau ownership.
In addition to its farms, Orete also has forestry, road construction and engineering operations and runs the Waihau Bay Lodge.
With 1,500 owners, Orete is a complex business.
Its strategic plan has it focused on protecting and sustaining its whenua and resources to support the growth of its owners, encompassing values of Tino Rangatiratanga, Kaitiakitanga, Whakapapa, Manaakitanga and Mātauranga. Growing Orete’s business potential is key, alongside providing economic, health and social opportunities for owners and beneficiaries.
‘Main Farm’ in Waihau Bay is 161ha effective of gently rolling land, 110km east of Ōpōtiki. Around 400 cows are milked there in a System 2 spring-calving operation with moderate supplement inputs. The farm gets 1,351mm rainfall per year and is made up of various free draining Brown and Recent soils.
‘Cape Farm’ is the other dairy block, located around 20km further east of the Main Farm on State Highway 35, inland of Cape Runaway. This farm comprises 129ha of flat to rolling country, milking just under 300 cows in a similar System 2/spring-calving operation to the Main Farm.
In the past, sharemilkers were engaged on both farms, but in 2018/19 Orete changed its structure to a managed farm model. Farm managers on both farms now have whakapapa links to Orete.
Te Taiao/the environment has always been important to Orete. However, in late 2006, an effluent spill on the Main Farm saw the Incorporation fined for environmental damages to the Waiare Stream, which joins the Tauranga Stream before flowing into Papatea Bay. This was a shock for the owners and prompted a review of the farm’s management arrangements.
Orete worked closely with the regional council, farm advisors and farm staff to achieve compliance and develop a long-term environmental plan for their farming operations. Since then, Orete has continued to engage advisors and participate in projects with a focus on the environment.
Orete is also involved in a DairyNZ and MPI Eastern Bay of Plenty Māori Dairy Cluster initiative, designed to support and lift on-farm performance across a range of aspects, including the environment.
Getting to grips with greenhouse gas numbers
In 2019, Orete were approached to be a part of a project funded by the New Zealand Agricultural Greenhouse Gas Research Centre (NZAGRC) to support Māori-owned dairy and sheep and beef farms to identify ways that they could reduce greenhouse gas emissions. As part of that project, farm advisors and researchers worked with Orete to estimate the greenhouse gas emissions associated with the Main Farm using OverseerFM (the Cape Farm was not part of the project).
The project identified a range of different management practices and land use changes that could potentially be introduced to reduce greenhouse gas emissions on the Main Farm.
Those options were then modelled using a combination of OverseerFM and Farmax to understand the impact on both greenhouse gas emissions and profitability.
“Developing an understanding of how where our emissions come from, the options for reducing them and the impact of those options has been essential in enabling us to plan for the future,” says Dane Tamepo, Orete Business Manager and Board Member.
Note that Orete also receives greenhouse gas and other environmental data and reporting from Fonterra who they supply to. To find out more about these tools and others, see our Know Your Numbers page.
Orete's greenhouse gas numbers
Orete's greenhouse gas numbers in 2019 across its two farms were:
|Numbers||Main Farm*||Cape Farm|
|Methane (tonnes CO2-e/ha)||6.7||5.1|
|Nitrous oxide (tonnes CO2-e/ha)||1.8||1.4|
|Total biological GHGs per hectare (tonnes CO2-e/ha)||8.5||6.5|
|Total biological GHGs (tonnes CO2-e)||1,369||1,062|
*The weight of methane is shown here without conversion to CO2-e because this is how it would be required to be reported in any farm-level pricing mechanism.
At the start of the project with the NZAGRC, the biological greenhouse gas emissions from the Main Farm were 8.5 tonnes of carbon dioxide equivalent per hectare (CO2e/ha). This is already slightly less than the average New Zealand dairy farm, which emits 9.6 tonnes of greenhouse gas emissions per hectare per year.
The project identified and modelled a range of different management practices and land use changes that could potentially be introduced to reduce greenhouse gas emissions on the Main Farm.
The mitigation scenarios that were modelled included:
- Reducing herd numbers, with and without improving productivity
- Reducing replacement rate
- Reducing nitrogen fertiliser use and supplementary feed
- Converting land to exotic forestry
- Converting land to kiwifruit
The results of the project's modelling and the impact on Main Farm's emissions and bottom line are shown in the table below.
|Modelled scenarios for Main Farm||Change in EBITDA||Change in GHGs|
|1||Reduce cow numbers 10%; no improvement in productivity||-35%||-8%|
|2||Reduce cow numbers 10%; improve productivity||33%||-6%|
|3||Reduce cow numbers 15%; improve productivity||38%||-10%|
|4||Reduce replacement rate||12%||-1%|
|5||No nitrogen fertiliser||-5%||-7%|
|6||No bought supplementary feed||-21%||-10%|
|7||No N fertiliser, no bought supplement||-16%||-17%|
|8||10% of farm in pines||-7%||-34%|
|9||10% of farm in pines, reducing stocking rate 10%||11%||-39%|
|10||31% of farm in pines||-55%||-106%|
|11||10% of farm in gold kiwifruit||211%||-9%|
|12||13% of farm in green kiwifruit||130%||-10%|
|13||24ha pines, reduce stocking rate 16%, differential offset||-30%||-51%|
The modelling showed the extent to which each scenario reduced greenhouse gas emissions and nitrogen leaching and the impact on the farm's bottom line (EBITDA or Earnings Before Interest, Taxes, Depreciation, and Amortization).
The most promising scenario for Orete was converting 10% of the farm into gold kiwifruit (Scenario 11) - achieving a 211% change in EBITDA from the base model and a 9% reduction in emissions.
Conversion into green kiwifruit (Scenario 12) also yielded a very positive outcome for EBITDA and emissions. Other scenarios that showed promise were the reduction in stock numbers accompanied with an increase in productivity (Scenarios 2 and 3) and conversion of land to pine trees (Scenario 9).
While the biggest potential lay with the conversion to gold kiwifruit, the capital cost to do this was quite high. Subsequently, the Committee decided to go with Scenario 13, diversifying around 13% or 21 hectares of the farm into green kiwifruit. The first vines were planted in spring 2020.
Around the same time, a Provincial Growth Fund investment of $10.6 million for a water storage facility was approved (Raukokore River Water Ltd), aiming to boost economic growth in the region by supporting high value horticulture. Access to this water infrastructure means that Orete’s Committee can now plan further development of its kiwifruit venture.
Alongside this land use change, the farm managers at Orete are undertaking a range of other actions to reduce their environmental footprint:
- Minimising use of nitrogen fertiliser
- Improving individual animal performance
- Improving herd fertility and genetics
- Improving effluent storage and application
- Improving pasture quality
Many of these actions will help to bring their greenhouse gas emissions down further. For more, see our on-farm actions page.
Orete is also participating in a study looking at the effects of banana palms on potassium levels in effluent. This will see the trees grown in a controlled environment and irrigated with dairy effluent. Planting started in 2022.
Land use change as a mitigation action
Converting dairying land into a horticultural enterprise requires a lot of planning. In addition to the financial aspects of capital, cashflow etc, physical factors such as water availability for irrigation, shelter, labour for managing and picking fruit, transport, storage, and who will market the product must all be considered. If you’re interested in reading an analysis of the challenges and opportunities to consider when seeking to diversify a farm through land use change, have a look at this report by AgFirst for MPI in 2020.
Know your numbers and have a plan
By the end of 2022, all farmers and growers will need to know their annual on-farm greenhouse gas emissions and by the end of 2024, they'll need to have a plan in place to manage them. These requirements are part of the He Waka Eke Noa partnership and are intended to help get farmers ready for agricultural greenhouse gas emissions to be priced from 2025. To find out more on how to do this, see our Know Your Numbers page.