Milk producers in west Wales are leading the way on pollution controls with a new initiative that offsets the impact of nutrients generated by agriculture.

The project involves suppliers to the First Milk creamery in Haverfordwest and it evolved after Welsh Water served notice that it would no longer treat the effluent from the cheese factory at its sewage plant because it needed the capacity for new housing development.

After prolonged negotiations between First Milk and Natural Resources Wales, an agreement was reached whereby treated effluent from the factory could be discharged directly into the Cleddau on the proviso that the farmers would offset these nutrients by changing farming practices upstream.

The initiative is based around Building Resistance in Catchments (BRICs), a project which brought together partners from farming, wildlife conservation, Welsh Water, Natural Resources Wales, ADAS and others to develop a nutrient trading scheme that rewards farmers for going beyond the basic regulations such as establishing buffer strips along watercourses, planting cover crops and using fertiliser more prudently.

ADAS’s Farmscoper software allows farmers to match nitrogen inputs with crop requirements.

First Milk supplier Mike Smith played a key role in developing the scheme.

Building on this, Mr Smith and other suppliers are now seeking funding for a more ambitious Blue Flag Farming scheme, which would work alongside the nutrient trading scheme.

The idea is to have a farm certification similar to the Blue Flag given to beaches, which would allow farmers to choose how they manage their nitrogen budgets and record the benefits they are providing.

It comes after Welsh rural affairs secretary Lesley Griffiths recently announced tougher new regulations and possible stricter limits on the use of nitrates on farmland.

But farming unions are resisting this because they say that the costs of improving slurry storage would drive many farmers out of business, and argue that sewage works and industry must share the blame.

Mr Smith calculates that nitrate losses from the farms in the First Milk scheme have dropped from 283 tonnes annually to 248, which equates to around a tonne per farm or 7kg/hectare, double what the cheese factory is releasing.

He says this approach has also reduced his fertiliser bill by two-thirds.

As a next step, Blue Flag Farming would build on this by drawing in hundreds of farmers. It would develop the precision farming approach further, by measuring the flow rate of slurry delivery in real time and linking it to GPS data, to give more savings.

The BRICS scheme relies on detailed record-keeping and a high level of scrutiny but Mr Smith says this approach allows the industry to “de-risk’’ the situation and build up a bank of information about soil health across Wales.

Farmers can also demonstrate the extra environmental benefits they are delivering and be rewarded for that.

If the system is rolled out and externally audited, Mr Smith believes that would better deliver the Welsh Government commitment to work in partnership with its stakeholders rather than impose regulatory solutions.

Once established, it could pay for itself through savings on fertiliser and payments for public goods, he adds.