Ag Sector Leaders Discussion – Palmerston North Consultation.
Official template found here.
• Questioning of targets with a general consensus that they are wrong and do not use
the most up to date science. Questions were asked if there is a process to update
targets and legislation to follow improvements in science.
o Farming community hears David Frame promoting GWP* and saying
Governments current greenhouse gas metrics are out of date. Feels like the
government is deliberately not using GWP*.
o Feels unfair because it seems to the rural sector that they have
o to cool the planet by sacrificing their businesses, while watching the rest of the
country continue emitting long-lived gases.
o One farmer observed that all metrics have flaws, and that it is better to have a
per tonne measurement.
o Question was asked about what happens when farmers have reached their
targets? Answered:
Price of methane is to be set to the targets, and be reduced
if overshooting
o Feels like a shifting target – how do we know when do we know when we get
there. Why is 2017 the starting time? How do we know if we moved towards
reaching the target? A farmer shared that Fed farmers have figures that we
have not made progress towards the 10% reduction.
• HWEN partners did this proposal without support of their levy payers. Red meat
sector do not agree to a 20% decrease in revenue.
• Currently mitigation technology is unproven and unavailable. Therefore only option is
to plant to reduce emissions.
• Freshwater policy and He Waka Eke Noa – Two systems conflict each other:
o Reducing emissions is about improving efficiency, and improving water
quality is about reducing intensification to reduce nutrient loads.
o By reducing the amount of dry matter intake that goes into the product is most
efficient for reducing greenhouse gases. This is done with break feeding, and
high-quality feed, which leads to intensive systems, which goes against
freshwater policy.
o There are 2 sources of emissions – intensity per ha and efficiency (intensity
per product). So, to meet both regulations, we are going to have to drop the
stocking rate and lower the amount of dry matter. Less intensity and less
productivity. This means we are producing less, and via supply and demand
principals – make more money. But then food security becomes an issue.
• Leakage – New Zealand sheep and beef is most efficient in the world, yet the most
impacted system. Another farmer observed that it is NZ agricultural we have to look
inwards and see how we can make this fair. We are going to pay for pricing scheme,
or climate change. Soon we will be paying twice. We will have to pay for both
climate change and pricing scheme.
• View in the room that customers do not want climate neutral / positive products yet.
Farmers said it would be good to see science, instead of ideology in customer
preference studies.
• Concern about what happens if the mitigations (feed additives, bolus etc) don’t work.
• If no other country has done this, then will we back out of this a few years later? If we
do this and no one else does anything, then we face all the consequences (pay for
climate change and for our emissions)
• Free allocation – no farmer wanted this because it is the wrong image for the industry
– image being that farmers are polluting but they get a subsidy.
• Rural communities – how are we going to reduce the impacts on the communities?
o We don’t want trees because they wreck the towns infrastructure, and
community.
• Mental health of the rural sector. What is the long-term cost of mental health – across
the sector and all communities associated. This policy is already impacting mental
health because of the uncertainty.
o Mention that it is harder to run a business because profit margin keeps
shrinking.
o labour shortages also occurring so farmers are working overtime.
o Ability to understand and deal with this policy and climate change is reducing.
o Wrapping support around the rural communities – e.g. mental health support is
not out there or ready. Needs to be better now. Really massive problem.
• Information of this policy is to long to read and hard to understand. People don’t have
time to calculate their emission numbers. 95% of farmers don’t understand this, and
don’t know their numbers. Just trying to get through their day job.
• No way we can set up a system at farm level for 2025, so processor hybrid likely.
• Riparian vegetation is not going to meet the threshold. Official:
There is no size
threshold yet, and we would like to hear about that from you.
• Is anyone going to fix the ETS? Official mentioned there was a review occurring.
• Concern about lack of systems view thinking – impact on emissions of people moving
from agriculture to other sectors such as tourism.
• Suggested freshwater farm plan audits also monitor sequestration to reduce audit
burden.
• Concern about having 2 systems (processor levy and farm levy) and that it would be
better to have more certainty.
• Q: Do you think this is a fair and just transition?
A: There are choices we need to
make – what does NZ look like in 2050 – we are a technology taker, and we don’t
know when those techs will be there. We are trying to signal change now that is, to
adjust to the change. This is not unique to the farming community. There are going to
be impacts on communities, and how can we help reduce those impacts. Also heard
about how this is rubbing up against FFWP community. And science and targets –
there is a need for some sort of cimate information centre for people to go that is not
• Scary that the government is controlling the target and the price. Needs to remove
politics of price setting.
• Farmers going out of business will cause downstream impacts of other business
behind them going under also.
• Q: How do the contracts work? A:
Incentive payments – year by year payments –
show the technology and amount of GHG removed to deduct off your bill. Reductions
associated with the tech is paid at a much higher rate to drive the uptake of mitigation
tech. Sequestration payments - will be 3 -5-year contracts.
• Where is sequestration being paid from? Stuff is really hard to get into the ETS. Why
is the Government not adopting the most updated technology help with this? A:
We
are reviewing and updating our inventory. There are a number of research initiatives.
Private sector needs to get to the threshold of entry.
• Mention that the Governments leakage work doesn’t mention deer. New Zealand
supplies 40% of the worlds venison exports so the leakage will be even worse than for
sheep meat.
• Our own modelling is targeting our own most efficient products.
• Q: Are you asking about what support we might need now? Is that this proposal? A:
You know your communities far better than we do. How do we support people over an
acceptable period of time, and can walk away with mana intact.
• Q: Where does the 20% drop in S+B revenue come from?
20% number is revenue.
Landuse change is 10%.
• Farmers would like to have clarity over price and what it will be. We don’t know who
will set the price. If we have an idea about what the liability, we can act on it, and we
can pull some of these issues down.
• Nitrous oxide – is measuring and pricing it an unnecessary complication? Given the
cap with freshwater, and stocking rates likely to reduce. Can we park nitrous oxide
and focus on methane for a simpler system? Another farmer said that the price of
fertilizer is going higher and higher, but pricing its emissions makes it fair across
subsectors (e.g pastural and cropping).
• What has the modelling shown about the GDP of the country? A:
Modelling didn’t
look at that.
• Large concern about losing processor space due to reduced profitability. If we lose
shelf space for a season, then NZ may end up missing out on the processor space
which is taken up by other countries.
• At the processor level – Fonterra is already collecting data. Why can’t we use this for
the processor level? Noted that Sheep and beef is very different and not advanced.
• Farmer recommend that Government should accept all the recommendations from
HWEN because they managed to get everyone there. Noted that Governments
proposals are worse because they have been carved out.
• When will we be reporting our emissions? A:
first year is Jan – June. Then change to
align to your tax year
•
Q: If get credits back – is that taxable income?
• Is it better to stretch it out a year to get it right so it is better for farmers and for
government?
• We could differentiate and change the price between sheep and beef and dairy.
