What the Government has laid out as a document for discussion for the future farming emissions reduction programme is very close to what the interested sector groups put to the Government as a plan they could live with. Given this, the heated response from some farming groups, but notably Federated Farmers, is perhaps surprising and needs a closer look.
The fact that Greenpeace do not agree with is no surprise and likewise Groundswell. Greenpeace will not be happy until all animal farming is gone (perhaps a slight exaggeration) and Groundswell seem to believe farmers should not be paying for any externalities.
So, without looking at all the finer details, what are the major differences from what was proposed earlier this year?
- The Climate Change Commission, in consultation with farming will set the price for methane, not He Waka Eke Noa. Not a surprising outcome given that the farming sectors would be trying their utmost to pay the minimum. He Waka Eke Noa had put forward 11 cents per kg of biogenic methane which when converted to a CO2e basis is said to come out at $3.93 or less than 5% of the current ETS price. How often the price will be reviewed is up for discussion with the government suggesting every 3 years but seems open minded here.
- The other major point of contention appears to be around benefits gained from sequestration. The government is going down a pathway that would not recognise some classes of sequestration such as small woodlots, shelterbelts and scattered trees. There is actually nothing new here as under the ETS the rules have been:
To qualify as forest land in the ETS, the trees in the forest must:
- cover at least 1 hectare in area
- be species that can reach at least 5 metres in height when mature in that location
- have (or be expected to reach) canopy cover of more than 30% in each hectare
- be at least (or expected to reach) 30 metres across on average.
In my experience, trees, such as poplars etc, planted at 100 per ha should meet the requirements. Even under He Waka Eke Noa proposals there is nothing to stop farmers being able to claim these ETS credits. However, they cannot use them to offset the farms methane emissions. Presumably it then becomes a bit of a money go round for those farmers who do chose to plant eligible trees. They receive monies from ETS in one hand and use (a small proportion of) it to pay for their methane emissions with from the other. Farms with little lower-class lands such as dairy or finishing are less likely to use this option. Having a separate He Waka Eke Noa system for plantings not recognised within the ETS was /is always going to be problematic and bureaucrats don’t like things being less than simple.
After finding President of Fed Farmers Andrew Hoggard and the other recent leaders a more rational lot than their predecessors his all guns firing approach to this seems a reversal of style. No doubt the fact that the governments modelling has shown that the new policy is likely to see a reduction in Sheep and Beef farming by 20% probably due to the tree planting responses as above whereas dairying would reduce by (only) 5% has hit a chord.
However, models while useful are almost always wrong and if the 20% is as it should be contained to the worse 20% of any farm the outcome may not be that dire.
Those farms likely would receive an income stream greater than they would have from the proceeds (less costs) of farming inferior land. It certainly doesn’t have to mean that 20% of total farms (as units) would disappear. At least that is my reading.
Groundswell are calling for (yet another) nationwide protest as they appear to be disagreeing with any form of rules-based system which may have $s attached, calling the latest proposal a “nuclear moment”. Hopefully, Hoggard’s response to push back is not driven by the need to appear more acceptable to the more extreme elements such as Groundswell.
There is a 6 week period for consultation to take place, no doubt the price of methane will be a major point as could the rate of increase in reduction although the current -10% by 2030 appears constrained with it going up to between -24% to -47% by 2050.
Given that farming could have been dragged into the ETS in 2025 if no workable proposition was agreed with, those who are vehemently against the government version of He Waka Eke Noa could have been looking at something far more draconian. Treasury agree with thrust of programme but have reservations about success of getting emissions to planned reduced levels by 2030.
Due to some of the intricacies in setting up a farm-based emissions assessment system, an interim processor based levy in 2025-27 or until farm based system ready will be the starting point.
40 Comments
Very balanced report . I , too , was surprised at federated farmers reaction. Maybe it is a bargaining ploy , as their less than 5% proposal must be a opening for negogiation. Maybe they are trying to head Groundswell off
The poplar option could be a godsend, especially if it is extended to include some willow. Fodder willow can match alfafa for tonnes of edible dry matter per Ha, I'm not sure at what stocking rate that is .
I think it is important to realise that Green peace does not neccesarily represent the views of most enviromentalists , just as Groundswell does not represent all farmers and supporters .
interesting to see National have said they will repeal the proposal , even though there are no details decided on what they are going to repeal. talk about jump the gun , at least it makes clear there is no chance of a coalition deal with the Greens . looks like the battle lines are been set , I guess we will be voting on the proposals , without seeing if they are effective or not.
That's good, I just thought I was wrong thinking it was pretty much as expected. I've said before I thought the only sensible way to deal with this politically was to suck it up and point the finger straight back and ask now what are you doing. I still believe actually dealing with fossil fuels, no offsets, will automatically deal with bio methane.
Nah they drive around in extended Ford Transits, the Fiat and Mercedes vans instead. At least that Ranger is hauling food production stuff...like mebe seed, fert, machinery. The vans haul sightseers. If we were 100% truly worried about climate change the waste that is tourism would be targeted. Its not. Food is being targeted. Why?
International travel should be brought into cop28 .
but , if we are going to pick on tourists , then what about the most travelled people in the world , the kiwis ? How many people do you know that have popped over to Aussie , the Islands , or even Europe lately?
Its a political minefield , what Politican is brave ( or dumb ) enough to tackle that ?
I agree and thats why fossil fuels are 100% taxed.
The ETS charge is hitting coal very hard and we will see big changes in the next few years. Again its a hard conversion process but it is happening.
I still think Ag should be able to use offsets if fossil fuels can and still cant get to the bottom of why not - they have to go via the fossil fuel lot to monetise them.
This isnt easy for anyone and we do need to be very careful we don't destroy/demoralise the vast majority of good farmers who do care and are trying hard. I feel we need to actually provide a reward for those that do achieve better reductions so they benefit financially. You cant just hit people you need an incentive and money tends to work well.
There is no compelling argument for taxing farmers for methane emissions. It is pushed by the social engineering politicians and the people making eye watering amounts of money out of carbon bludging.
"Even more strikingly, if an individual herd’s methane emissions are falling by one third of one percent per year (that’s 7/2100, so the two terms cancel out) – which the farmers I met seemed confident could be achieved with a combination of good husbandry, feed additives and perhaps vaccines in the longer term – then that herd is no longer adding to global warming.
...Academics can quibble (it’s what we do best) about the exact factors, but the fact that this formula is vastly more accurate than the traditional accounting rule is indisputable.
Traditional greenhouse gas accounting ignores the impact of changing methane emission rates, while grossly exaggerating the impact of steady methane emissions."
https://www.nature.com/articles/s41612-021-00226-2#MOESM1
https://www.newsroom.co.nz/ideasroom/a-climate-neutral-nz-yes-its-possi…
NZ's Nationally Determined Commitment under the Paris Agreement sets a headline target of a 50 per cent reduction of net emissions below our gross 2005 level by 2030. Livestock units have increased since 2005, cattle has increased from 9.5 m to 10.1 m according to Stats NZ, so there are now more methane emissions. Kyoto had a 1990 base line, which would have made the numbers look even worse.
Methane emissions peaked in 1990. Farmers are now far more efficient. Paris is a non binding waste of time unless you are a virtue signaller, carbon bludger or social engineer.
https://pcep02s1.blob.core.windows.net/cache/5/a/1/3/6/8/5a136842a51fbc…
"The Paris Agreement, if fully implemented, will cost $819–$1,890 billion per year in 2030, yet will reduce emissions by just 1% of what is needed to limit average global temperature rise to 1.5°C. Each dollar spent on Paris will likely produce climate benefits worth 11¢."
https://www.sciencedirect.com/science/article/pii/S0040162520304157
Not a single G20 country is in line with the Paris Agreement on climate, analysis shows
https://edition.cnn.com/2021/09/15/world/climate-pledges-insufficient-c…
NZ farmers already are world leaders in low CO2 production. Even James Shaw admits as much. All this virtue signaling exercise is doing is pushing lowest CO2 farming from NZ to higher CO2 farms offshore. Net result high global CO2 emissions. A bit like shutting down local gas exploration and then importing Indonesian jungle coal and Chinese coal based methanol.
Theres some wins there
1. Definetely not going to ETS - that was the big one from what I read for farming groups
2. Split gas agreed to - different price for methane which is what they wanted
3. Getting a payment for native riperian strips and maybe some additionality with the potential to bring some others into the ETS in time - should be at least $60 to $70 per ha which is what the carbon value would be anyway at best as they have very little carbon value.
4. Hill country can plant some trees, native or exotic, and go to ETS - some areas cant do this for RMA reasons. At the payment rate they are in this would be very easy to sort out for hill country farmers - many are and are finding themselves significantly more profitable - this charge to them is a complete non event.
The small areas left out in all honesty would sequester hardly anything. I would say its a blessing as the cost of measuring, recording etc etc would be more than its worth.
Anyone who thought the farmers are going to be allowed to set the price are dreaming.
Nothing is not a option in the answer box I'm afraid.
As we both know Keith rational and science based thought seems to have flown the nest and it seems to have really gone west on HWEN. Im at a bit of a loss at times but retain hope as I see the large number of farmers coming to us and the groups I talk with - once people become informed on options they get thinking and see the opportunities that suit them. Its not telling them what to do, and certainly not to stop farming animals, but just looking at landuse options and returns within their systems and families.
As Ive noted before and I know you have seen as well, those that do change often get abuse heaped upon them so they hide away and wont say anything which is a real shame as they could show the options for others. I cant get anyone who is prepared to open the gates and show whats going on now.
Im a bit sad that Simon Uptons report didn't get more airtime on all sides as it had some really good information and thought to inform and move this discussion along.
We can but keep trying.
Food inflation is the new normal. Hunger is an ever increasing problem again. New Zealand of the temperate isles cant stop the climate from changing. But we can produce as much food as possible for millions. This government has done nothing but destroy food producers in the last few years. Fruit and veg unpicked. Trees replacing crops and stock. This is insane. Discussing the ins and outs of a tax that makes it more difficult for food producers to produce food is insane.
Talk about not seeing the wood for the trees.
Spanner in the works for Cindy is that about 25% of NZ's farmland is run by Maori, or Maori connected interests. Wait until they start commenting on this. Cindy does have a history of about turning if the "right" people moan about them. The humour potential is enormous. I can't wait.
Jacinda Arderns..'let them eat cake' moment.
I am not sure how I can produce the same amount of food anymore with the vast increase in fert and spreading prices. What was circa $500/tonne mix is now $800/tonne. I know many are just throwing on lime this year...when they can get it. So many ordering lime, its been hard to source. Lime is not a fertiliser. Food production will drop. NZs income will drop.
Fertiliser was 30% of my budget. There is nothing left now. This country has poor infertile soils. If fert prices stay at these current levels we are pretty much rooted unless our returns lift. Food inflation.
Join the dots. Not something Cindy, Damien or the watermelons seem capable of. Food production is currently at breaking point. Everywhere. Its laughable thinking this tax will go ahead. I simply dont believe these idiots. If it does, their precious followers will at some point understand the rort. Then what. She just told them to eat cake.
I didnt say the fert problem was caused by our government. Its not. Food producers are in a fight to survive right now. This government is not recognising this. Instead it is pushing more uncertainty onto producers, telling us it will tax us more. Talk about adding fuel to the fire.
Its a battle for survival right now. Your breakfast lunch and dinner is at stake. Cheap food has had its day. At the same time most households and businesses have the highest debt ever. Access to fuel has become sketchy.
Are you blind? Do you not see what is happening in Europe. Russia is a massive fertiliser and fuel exporter. The whole market is now broken. The bond market is broken. Read the headlines from the UK.
And Ardern government decides we need to tax animal farts. She is a joke. NZ is a joke.
30 percent of my expenditure has gone up more than 50%. What do you not get? I am not alone...every farmer in the world is scratching their heads wondering how long they can produce food with less fuel and fertiliser but higher interest rates. Its basic math and the the math doesnt add up any more. Unless food prices escalate...ie do you want to eat or do you want to play. The world just changed. Russia went to war. China is going bust. QE became QT and everyone took a two year holiday off making stuff. The shit has hit the fan.
At last someone with a real number rather than just supposition including myself. Of interest to me is fertiliser sales in NZ a monooply? I understand Ravensdown is a big supplier and works on the co-operative model.
To re-post something that's not more than a month old
https://www.newshub.co.nz/home/world/2022/09/ukraine-invasion-joe-biden…
"Biden pushed back against Russian complaints that Western sanctions are harming its exports,
stressing that US sanctions explicitly allow Russia to export food and fertilizer and that it was "Russia's war that is worsening food insecurity."
If that's the case why is there still a 35% NZ tax on Russian goods? I know there are fertiliser manufacturers who rely on Russian gas to make fertiliser and in any event Russia may not be a significant fertiliser manufacturer. I don't know. Some smoke and mirrors by Biden saying one thing but probably telling its Allies do not buy Russian gas to make fertiliser and anyone else not to buy Russian fertiliser.
There are plenty of fertiliser importers. Ballance and Ravensdown are NZ wide, most of the others are regional. I could take my pick from mebe 7 that would have product I would trust. The big two are farmer owned. You have to be a shareholder to buy off them. They are ok. This is not about our fert companies. This is about our government taking a wrecking ball to its main income stream that is currently facing new stresses it has not seen before.
The HWEN proposals support direct taxes on each farm so as not to disadvantage early adopters or those who have already started on their carbon reduction plans. The processor levy will only come in in 2025 if the individual farm accounting is not ready. IMO the latter won't be ready this govt seems incapable of having processes in place on time, e.g. nitrogen reporting was due in July, however the systems weren't in place.
Thanks. For me fert is an input cost to farmers and 30% is pretty high and if the labour govt are imposing a 35% tax on Russian fert when Sleepy Joe said it was OK to source fert from the Russians then why is there a 35% tax on Russian goods. I don't recall seeing on MBIEs website an exemption for Russian fertiliser from the 35% tax.
This is a part of the wrecking ball.
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