The idea of charging development contributions on dairy conversions has been ditched by the Central Otago District Council.
The council considered a report on the topic this week but decided against targeting a contribution from new dairy farms.
As part of a proposed review of its development and financial contributions policy, it asked Rationale Ltd to look at dairy conversions and the pressure they placed on the council's roading network.
The report concluded dairy farms created more heavy-vehicle movements than other farming operations, which placed pressure on rural roads, but the intensification of pastoral farming also increased demand on roading.
Revenue from development contributions on dairy conversions would be relatively low and was unlikely to offset the costs from intensified land use, the report said.
Central Otago Mayor Tony Lepper said the definition of a dairy ''conversion'' was also relevant.
''When does dairy grazing become dairying?'' he asked.
''Dairy grazing can have more impact on the roads.''
Dairy farmer Cr Stu Duncan said there was no longer a ''race'' to convert to dairying in Central Otago.
Deputy mayor Neil Gillespie said rural landowners would argue they were already paying ''big rates''.
The Rationale report said annually the council spent $4 million to $5 million on operational costs and $4 million to $6 million in capital costs on its roading network, funded by a government subsidy, a district general rate (based on land value), a uniform annual charge, a targeted ward rate and development contributions.
Heavy vehicles caused a significant part of the costs of maintaining that network, especially rural roads, the report said.
The number of dairy farms in Central Otago has increased from fewer than four in 2007 to about 20 in 2013, based on DairyNZ figures.
The council's latest growth projections estimated the number of dairy farm rating units would increase, on average, by about 1.5 dairy farms a year.
To fund the extra costs caused by intensified land use, the council could change its rating structure, introduce new development contributions or financial contributions or combine all those options, the report said.
Dairy land had a higher land value than arable or grazing land, so dairy farmers were already paying higher rates.
If the council decided to introduce it, a development contribution could be targeted at the construction of dairy sheds.
The Waitaki District Council introduced a charge for dairy farm conversions into its development contribution policy in 2009, the report said.
Based along those lines and assuming there were two new dairy conversions a year in Central Otago, a development contribution would add an extra $10,000 a year to the council coffers.
''This is unlikely, on its own, to offset all of the additional costs incurred by the intensification of Central Otago's rural land''.
The report said if the council thought fairness and equity in funding growth was more important than encouraging development, then it should levy a contribution for a dairy conversions.
