An anti-business “innovation tax” has forced the companies behind plans to develop indoor dairy farms in South Canterbury’s MacKenzie basin to dump its idea – for now.

Southdown Holdings, Williamson Holdings and Five Rivers lodged resource consent applications for effluent with Environment Canterbury (Ecan) last year.

The companies wanted to house up to18,000 cows in cubical stables 24 hours a day for eight months of the year, spanning winter, and 12 hours a day for four months during summer.

Jointly, the group has already spent $1.8 million and this week wad advised by the Ministry for the Environment that it would have to pay a further $2.6 million – costs associated with the “call in” sparked by Environment Minister Nick Smith earlier this year.

The call in was due to the scale of the discharge consents, the fragile nature of the MacKenzie basin and the importance of freshwater quality to the government and the high level of public interest.

The applications would usually have been dealt with by Ecan. The call in means a special board of inquiry would be created, if the companies fronted up with the cash to fund it.

Of the 5200 submissions the consent applications attracted, most referred to animal welfare issues, which the RMA process does not consider.

Southdown Holdings and Williamson Holdings director Richard Peacocke told NBR said the costs were “crazy.”

However, the three companies still have applications for water in along with about 30 other farmers in the region and will forge ahead with those.

If consent to take water is granted, traditional dairy farm models would be created.

“This means we won’t get the productivity we were looking for,” he said.

But, Mr Peacocke said the government was standing in the way of progress and stymied the ability to grow the economy.

He said the cubical stable system, used in the United States and in Europe, meant less feed was required for the stock and production per cow increased.

“How does the country achieve growth if the government flip flops trying to placate everybody,” Mr Peacocke said.

Federated Farmers president Don Nicolson told NBR said the decision to charge the applicants for the MacKenzie country project was a “king hit,”

Mr Nicolson said Dr Smith was affected by the rhetoric in the media about the project.

“It shouldn’t be that hard that people can’t get through due process,” he said.

Dr Smith had said the estimated turnover of the proposed farms was $30 million and the cost of calling in the applications needed to be viewed in the context of that turnover.

While Mr Peacocke said the potential turnover was probably closer to $60 million, the costs imposed by the ministry were cost prohibitive.