He Waka Eke Noa
Submission from Southern Pastures Management Limited
By email to: [email address]
Who are we?
Southern Pastures Management Ltd is the General Partner of Southern Pastures LP, New Zealand’s
largest institutional dairy investment fund.
We farm more than 6,600 hectares and we produce milk under our own independently audited 10
Star Certified Values™ programme1. The values required to meet the 10 Star programme include
grass fed, free range, climate change mitigation, human and animal welfare and a comprehensive
range of sustainability and welfare requirements (for example, Southern Pastures does not utilise
PKE in its cows diets or use phosphate from Western Sahara).
Southern Pastures is the owner of the premium dairy brand Lewis Road Creamery and the wholesale
business New Zealand Grass Fed Products. Southern Pastures’ milk, produced to the rigorous10
Star programme, has been pivotal to the success of Lewis Road Creamery’s 10 Star grass-fed butter
sold by high-end grocery stores across the United States. This butter is now also sold in Singapore.
On our farms we have a massive programme of work underway to reduce our greenhouse gas
(‘GHG’) emissions with a special focus on soil management and carbon sequestration - through both
plantings and underground work. Soil can potential y hold three times more carbon than the
atmosphere and plants combined. Soil carbon essentially supports all life on this planet and helps
offset climate change, and annual soil carbon fluctuations can affect climate change. We therefore
believe that a strongly proactive approach to preserving and sequestering additional carbon where
possible in our soils is potentially an important part of the answer to mitigating climate change.
We are committed to farming techniques such as low tillage and incorporating deeper-rooted plants
into our farming systems and fostering soil biology including the use of dung beetles (that can take
carbon down to 1.2 metres). We are also trial ing and measuring numerous other initiatives such as
biochar and prebiotics, as wel as retiring land to native plantings.
Southern Pastures is a (and was one of the first in New Zealand) signatory of the United Nations
Principles for Responsible Investing and has been recognised for the 7th year running as a
Responsible Investment Leader by the Responsible Investment Association Australasia.
All of the above is to reinforce the fact that, as an organisation, we have environmental sustainability
and climate change mitigation embedded in our DNA.
We believe that we are among the most greenhouse gas efficient farmers in New Zealand – which
itself is home to the most efficient farmers in the world. Half of our farms are already certified
CarbonReduce™ by Toitu (and we are having the balance of the farms audited at present) and we
have Manaaki Whenua setting a baseline for soil carbon on our farms.
This means that we are embarked on a certified programme that wil measure our carbon footprint.
We intend to reduce our carbon footprint, moving on a path towards true carbon neutrality, rather
than relying on the purchase of carbon credits as offsets.
1 https://southernpastures.co.nz/10-star-values/
Southern Pastures Management Ltd
Level 4, BNZ Building, 354 Victoria Street, Hamilton 3204, New Zealand
www.southernpastures.co.nz
For the record we do not believe that the ETS is the most appropriate mechanism for climate change
mitigation. It is akin to a parking ticket, it does little to modify behaviour and, if applied to agriculture,
it may only achieve its objective by driving farmers out of the industry which in turn wil cause immense
harm to the country’s well-being.
Southern Pastures proposes a better more efficient market based solution in this submission that
is an alternative to both the ETS threat and to the Climate Change Commission’s response to He
Waka Eke Noa. We believe, from what we have read in the press, that this solution is similar to what
Minister Shaw may have earlier proposed.
We believe that a Cap and Trade system is the superior solution to the problems we face.
He Waka Eke Noa
He Waka Eke Noa [HWEN] is based on the praiseworthy concept that al of us in Aotearoa New
Zealand are in the same boat – and a critical element in sustainability must be our commitment to
sustaining each other.
However, to tackle climate change successful y we need to think even bigger. We may be all together
in the same waka here at home but we are also in the equivalent of the spaceship we know as Mother
Earth. This is a closed system with finite resources that is dependent on the sun for life but could
equal y destroy us if we fail to manage our climate systems.
From this perspective, it doesn’t matter how good we are in New Zealand if the rest of the world
doesn’t do its part. This is not to imply that New Zealand agriculture should sit on its hands or that
we shouldn’t aspire to lead. But we shouldn’t be leading the world by casting ourselves as martyrs
who are failing to make an iota of difference in the wider scheme of things.
We applaud the fact that HWEN was formed as a col ective enterprise, bringing together all the
players in this hugely important sector, to work out how New Zealand’s pastoral farmers could assist
in meeting New Zealand’s commitment to the Paris Agreement on Climate Change.
But we are disappointed in the Government’s indicative response in two key respects. It has rejected
the proposal to give credit for carbon sequestration for plantings done on farm, with some smal
exceptions. And it has retained the right to re-price methane gas emissions every 1- 3 years.
We also note that there is the possibility that a fertiliser levy could be imposed at the processor level.
We strongly recommend against this. The objective has to be promote behavioural change at the
farm level and this can only come about if calculations and levies/rewards are enacted at the farm
level.
While these changes to the HWEN may seem relatively minor, they multiply over time to amount to
a big deal.
Like most of the farming community, we find the Government’s advisors, the Climate Change
Commission’s (CCC) recommendations to be neither logical nor fair.
The impact of these recommendations include:
• To refuse to give credit for sequestration and simply to penalise for outputs is akin to single
entry accounting.
• To not promote biodiversity. If we are to successful y confront the climate crisis, we need to
encourage native planting wherever it can be accommodated and we need to promote
Southern Pastures Management Ltd
Level 4, BNZ Building, 354 Victoria Street, Hamilton 3204, New Zealand
www.southernpastures.co.nz
biodiversity – even if there is a cost to be recognised in the short term and even if such
planting sequesters carbon at a slower rate than exotic forests.
Biodiversity loss is as big if not a bigger and more urgent threat to life on this planet than
climate change23. New Zealand has unique indigenous biodiversity that can only be promoted
here - and exotic mono-culture forests are not the solution.
• To reject on-farm sequestration simply on the basis of the cost of measurement is to take
only a very short term view. Satel ite and drone technologies for example are advancing at a
rapid pace and such measurements should become viable soon if not already.
A tree is a tree - sequestering as much carbon whether it is in a forest or on a farm. Surely,
we as a nation want to encourage virtuous behaviour that improves the land rather than just
punishing and taxing the very people who are producing the largest component of the
country’s export earnings?
• To allow an uncertain methane pricing mechanism and to al ow the methane price to be at
the whim of politicians, noting that New Zealand has a three year election cycle and politics
can vary materially. Farmers need long-term certainty for their planning. This will make it very
difficult to inspire any sort of confidence in farm values or the next generation into farming.
There has to be a better pricing mechanism than this – a mechanism that can be predictable
and/or have an ability to be hedged.
The Alternative Solution
We recommend that both HWEN and the looming threat of the ETS should be set aside and replaced
with a system that genuinely encourages and rewards sustainable, climate-resilient farming that is
properly focused on reducing GHG emissions.
We believe that there is an alternative that has been staring us in the face for some time, one that
has been deployed very successfully in other settings.
Does anyone still remember “Acid Rain”? Probably not because the issue has been solved. At one
stage this was an even more urgent issue than climate change for those who were living under its
threat, literally under its cloud.
It was solved by imposing a
Cap and Trade system on the polluting industries4 and it was solved at a
fraction of the fearsome cost original y envisaged as it structural y encouraged tremendous
technological innovations.
We urge that consideration be given to moving to a simple Cap and Trade system, where the
Government sets emissions caps and farmers under the cap would get credits while farmers above
the cap would have to buy credits from farmers who had them.
Clearly, sequestration and biodiversity credits would have to be included amongst the credits.
2 https://www.economist.com/technology-quarterly/2021/06/15/loss-of-biodiversity-poses-as-great-a-risk-to-
humanity-as-climate-change
3 https://www.irishexaminer.com/news/arid-40924202.html
4 https://www.smithsonianmag.com/science-nature/the-political-history-of-cap-and-trade-34711212/
Southern Pastures Management Ltd
Level 4, BNZ Building, 354 Victoria Street, Hamilton 3204, New Zealand
www.southernpastures.co.nz
This is a particularly appealing solution because firstly it produces virtuous behaviour and secondly
the Government, apart from its role in setting a
sinking cap, can get out of the way and focus on
other pressing issues. The primary sector, businesses and individual farmers, can get on with the
job of saving the planet …
Through the lens of the Planet
As briefly outlined above, this solution could take care of New Zealand agriculture’s domestic
contribution to the planet’s greenhouse gas emissions reduction targets. But to save the Planet –
the far bigger waka or spaceship that all of humanity is in – we need to do a lot more.
This shouldn’t be by producing less protein for a world that is already short of animal protein - for
example CISRO research shows that global meat consumption increased by 58% between 1998
and 20185. Rising incomes in developing world wil lead to more animal protein consumption. The
solution has to be on how to farm with lower greenhouse gas footprint global y rather than on
reducing production locally.
Minister Damien O’Connor co-chaired an OECD meeting on November 4th 2022 in Paris, where a
Declaration on transformative solutions for sustainable agriculture and food systems was signed.
The Minister stated:
“The declaration wil see OECD countries identify opportunities and challenges facing food
production and share ways to tackle them.
“It includes ensuring food security and nutrition for a growing global population, along with
addressing environmental challenges in an inclusive manner.
“With adverse events becoming more frequent, unpredictable and severe, we know as a
group that to tackle climate change and biodiversity loss, farmers and growers need to be
supported to boost their resilience.”
As we have referenced, New Zealand pastoral farmers are already the most efficient in the world
and, while New Zealand’s farming systems don’t lend themselves to being practised everywhere,
they can be applied in certain temperate zones. We should be sharing our knowledge to achieve the
best outcomes on a global scale.
If we were able to support or educate say Australian, South American, Irish and US farmers to
become as climate efficient as New Zealand, farmers, that would ultimately have a far bigger impact
on a far bigger scale than HWEN. And it would feed more, not fewer, people at the same time. To
this end, we at Southern Pastures are already playing our part having recently hosted some
Australian farmers who were keen to learn about our farming systems, and we are open to doing
more.
We could also look at sharing our other farming knowledge and IP, where applicable, with other parts
of the world.
For example, Norway has invested in teaching no tillage and conservation farming in Zambia where
200,000 farmers are being trained each year. The results are nothing less than spectacular, with
the original group of farmers seeing their yields increasing by 88% on average6.
5 https://www.csiro.au/en/about/challenges-missions/future-protein-mission/animal-protein-production
6 https://www.economist.com/special-report/2022/11/01/a-lot-can-be-done-to-adapt-farming-to-
near-term-climate-change
Southern Pastures Management Ltd
Level 4, BNZ Building, 354 Victoria Street, Hamilton 3204, New Zealand
www.southernpastures.co.nz
Conclusion
Farmers can provide more than one “good” and our proposal focusses on that.
Currently pastoral farmers only get paid for the products that they sel to processors. Our proposal
essentially says that they should have their greenhouse gas emissions measured (as a cost) but
against that they should be rewarded for the other societal goods that they could provide, namely
carbon sequestration, ecological preservations and biodiversity promotions. The Cap and Trade
system wil naturally encourage them to reduce their costs and to increase their goods – there wil
be farmers above the cap setting great examples and a gently sinking cap wil be there as an incentive
for ‘Kaizen’ or continuous improvements.
We believe that the solutions proposed in this submission wil do much to mitigate New Zealand’s
greenhouse gas emissions – and, most importantly, without negatively impacting the country’s
economic well-being.
Following this path will mean that farming, so crucial to the success of the New Zealand economy,
remains vibrant and viable, while playing its key role in reducing emissions and sustaining the planet.
We would be happy to meet with appropriate Ministers and ministry officials to discuss our
submission and recommendations.
Ngā mihi, kind regards
Prem Maan
Executive Chairman
[email address]
Southern Pastures Management Ltd
Level 4, BNZ Building, 354 Victoria Street, Hamilton 3204, New Zealand
www.southernpastures.co.nz
