Dr. Sean McCarthy:

I will make one or two comments specifically on that and on the comment around the structural change that could occur in our farm businesses, the large scale and so forth. I worked in New Zealand for six years. They never experienced the uncertainty we have. There was huge opportunity and excitement. There was no end to the number of people coming into the industry from Auckland and all the major cities. They saw dairying as an opportunity to make a career, build wealth and so on. That is at huge risk here. We may not see a structural change. We may see the industry being decimated if we do not encourage the next generation into it.

We looked at the impact of the abolition of milk quotas and the opportunity for family farms to increase a little the scale they were working in. All of a sudden those farm businesses became very resilient from an economic perspective. We would not have been as competitive even in the European context, in terms of the economic resilience of our family farm businesses. That opportunity was important. It would be remiss of us now to take a backwards step.

On the derogation, we need medium stocking densities to make our grass-based grazing systems work. They do not work at very low stocking rates. We look at water quality in the context of environmental sustainability or carbon. We have the lowest carbon intensity associated with our dairy. That is because we operate a good grass-based grazing, outdoor system and we cannot put that model at risk either, in terms of sustainability and the holistic perspective.