Livestock burp tax sticks in throats

By LIAM DANN primary industries editor

Farmers will be taxed on the flatulence of their livestock in a bid to reduce New Zealand's contribution to global warming.

The levy could cost a typical family farmer up to $300 a year. Larger corporate farmers could pay up to $10,000.

Sheep will be levied at 9c each and cows at up to 72c under the Government's proposals.

Deer and goat farmers will also be taxed.

The money will be used for research on meeting New Zealand's Kyoto Protocol commitment to lower greenhouse gas emissions.

The new Agriculture Emissions Research body will be financed by sheep, cattle, deer and goat farmers and will cost $8.4 million a year.

The levy, expected to be in place by the middle of next year, has infuriated farming organisations.

"That's overkill," said Meat New Zealand chairman Jeff Grant.

"This is a public good rather than an industry good. It should be funded by the Government, not farmers."

Livestock accounts for about half of New Zealand's greenhouse gas emissions.

The emissions are caused by the complex process of digesting grass, and are belched into the air.

Mr Grant said the levy was bad news at the worst possible time for farmers already hit by a high dollar, low commodity prices and drought.

The industry was already paying for its own research through the Pastoral Greenhouse Gas Research Consortium, he said.

The consortium, less than a year old, is made up of representatives from Fonterra, AgResearch, Wrightson, DeerResearch and Meat New Zealand.

The participants are investing $800,000 a year in emission research. The Government has supported the group by matching its investment, taking its total funding to $1.6 million.

Chairman Mark Leslie said the levy was "a real kick in the teeth for the consortium".

The new Government recommendations mirrored those from the consortium, he said.

"The Government is telling the industry consortium that 'It is too little too late' after giving us less than a year to prove ourselves."

Mr Leslie said throwing money at the issue would not necessarily speed things.

Time was needed to train skilled researchers and to understand how the digestion process worked.

Agriculture Minister Jim Sutton said agriculture had been exempted from emission charges in the climate change policy, but was expected to meet the costs of research.

The Government will introduce an emissions tax for other industries in 2007.

Federated Farmers president Tom Lambie said the levy disadvantaged farmers struggling to compete in the world markets.

"As far as I'm aware, we're the only country in the world to impose a levy like this."

Farmers will have until July 31 to voice their concerns, although the Government says consultation will be about how the levy is paid, not whether it will be paid.

It has decided against a levy on pig and poultry farms, as these produce less than 1 per cent of agricultural emissions.

Flatulence tax

How much: $8.4 million a year, or $300 for a typical farmer

What it means: A cost of 9c a year for every sheep and 54c to 72c for every beef and dairy cow in the country.

When: The levy is expected to be in place by the middle of next year.

Why: Livestock generates about half New Zealand's greenhouse gas emissions.

How: Animals expel belch greenhouse gases as they digest grass.