Hodgson backs down on fart tax

By LIAM DANN, primary industries editor

The Government looks set to back down over its controversial flatulence tax.

In a joint statement yesterday Environment Minister Pete Hodgson and Agriculture Minister Jim Sutton said a new research plan put forward by an agricultural industry group should be sufficient to avoid the need for a statutory levy on farmers.

Opposition MPs seized on the comments, calling the decision an "embarrassing u-turn" and a victory for farmers.

National MP Shane Ardern - who drove a tractor up the steps of Parliament to protest against the proposed levy - congratulated Federated Farmers for its campaign of opposition.

"The Government has finally admitted their mistake," he said, "but this backdown came at a cost to our farmers both financially and in time."

A spokesman for Mr Hodgson's office said the decision was not a backdown because the Government's bottom-line requirement - that industry funded enough research to meet Kyoto Protocol requirements - would be met.

The statutory levy was always going to be a last resort, he said.

Though the Government has finally found a compromise it can live with, it has had to endure a winter of bitter relations with farmers, who rallied throughout the country against the levy.

An opinion poll in August found 80 per cent of those surveyed opposed the tax. Even among Labour voters the levy was hugely unpopular, with seven out of 10 siding with farmers.

Federated Farmers vice-president Charlie Pedersen said the Government showed an arrogance about the issue from the start.

"They sullied our reputation by suggesting there was something less than wholesome about farming sheep and cattle in New Zealand.

"We're the most environmentally friendly, sustainable farmers in the world."

The solution to the standoff has been brokered by the Pastoral Greenhouse Gas Research Consortium, which has already been researching methane reduction methods for more than a year with backing from Fonterra, Dairy Insight, DEEResearch, Meat New Zealand, Wrightsons and the state-owned AgResearch institute.

Since the prospect of an emissions levy was raised in June, the group has argued it was already doing a significant proportion of the research the Government required to meet its commitment to the Kyoto agreement.

"What we've been saying is there is potential here for a win-win," said consortium chairman Mark Leslie.

Once the research that had already being done had been identified, it was just a case of finding the gaps.

The result is that the consortium's budget will be beefed up to $3.2 million next year, he said.

That figure is still well short of the $8.4 million the Government originally demanded from farmers, although last month it said it was not wedded to that figure as long as the research was done.

Mr Leslie said that by building new trials into existing research frameworks, the total costs were significantly lower than they would have been to set up from scratch.

The new research will be funded by agricultural companies and farmer industry groups without the need for new levies.

The flatulence tax

* The Government wanted to raise $8.4 million a year from farmers for research into agricultural greenhouse gas emissions.

* It proposed a levy on livestock that would cost each farmer about $300 a year on average.

* Livestock were targeted because animals produce methane gas, which is linked to global warming.

* Industry groups will pick up the research tab.