Opinion: Farms are already in the Emissions Trading Scheme through fuel and power, and are feeling the pinch like other households, Dr Jacqueline Rowarth writes.
Anybody reading the headlines or catching the sound bites can be forgiven for being thoroughly confused about what is happening with greenhouse gas (GHG) emissions and agriculture.
Commentators have pointed to "wishful thinking" and "leaky logic"; those directly involved have described "the good, the bad and the ugly".
Eric Crampton, Chief Economist at The New Zealand Initiative, has encapsulated the difficulties succinctly: "A lot of problems have no good solutions – just ones that are bad in different ways".
The fundamental problem is that New Zealand has a high use of renewable energy for power, a high use of fossil fuel for transport and an extremely efficient agricultural production system in terms of GHG for meat and milk.
There are no easy levers to turn. Countries with large industries were able to clean up their act and bring emissions down. New Zealand has no significant industry to which this applies.
Of note is that no other country has brought their agricultural sector into any form of carbon taxation.
Many countries that are less efficient producers of food than New Zealand are ensuring that their domestic producers are supported with government money (subsidies) to ensure that they remain viable.
All of these reasons explain why bringing agriculture into an emissions scheme designed to reduce the GHG produced seems a bit hard to many farmers. They've done everything they can to be efficient, and now they are being told to do even better.
Some activists have suggested that the answer is to reduce the number of ruminants.
This shows that they don't understand that New Zealand's efficiencies are because of innovative farmers working together to achieve economies of scale and integration.
Dairy beef is an obvious example where calves from a dairy herd are raised for beef, thereby lowering the GHG associated with that meat.
Less obvious is that different types of stock are managed on pasture in a manner that maintains that pasture in optimum quality and quantity while also meeting the needs of the animals optimally.
Dr Jacqueline Rowarth. Photo / Supplied
The United Nation's Methane Report suggested that animal methane could be reduced by feeding animals better and improving animal welfare; New Zealand is ahead of the game.
Further, the best use of most of the land used for producing meat and milk is pasture.
Anything else would increase soil erosion, reduce carbon in the soil, and involve more agrichemicals.
Given this, removing animals from the national herd would simply reduce the amount of protein being produced – and that would be against the intent of the Paris Accord.
Most farmers want to do their part in reducing emissions but are struggling to see how.
This is the "wishful thinking" comment.
Feed additives are at various stages of development, and some are being used successfully in systems where supplements are used; vaccines are still under development, and Lincoln University (with Ravensdown) has a technology for removing methane from ponds… but everything adds costs, only some of which can be recovered in production.
Listen to Jamie Mackay interview Dr Jacqueline Rowarth on The Country below:
And New Zealand farmers are price takers in an international market through their processors, struggling to maintain economic viability with on-farm inflation (10.2 per cent in the year to March) that is higher than food inflation (7.6 per cent to the year to March and 6.8 per cent to the year to May).
The He Waka Eke Noa (HWEN) recommendations, involving 13 groups (including MPI and MfE) have struggled with all the difficulties but brought the sector together in a plan estimated to bring emissions down by just over 1 per cent a year to meet the 10 per cent reduction target by 2030. It is a big reduction for a biological system trying to maintain protein production.
The "leaky argument" refers to the fact that if New Zealand product is replaced by that from other countries, the GHG per unit of product will be increased – which is not what the world wants.
Regular reviews are part of the HWEN agreement and will allow targets to be checked and progress assessed. The reviews will also allow the inclusion of new research and technologies.
Costs to farms being bandied around are unhelpful; they are averages. For some farms, a small reduction in earnings means that they are unviable. The deer industry, hill country sheep and beef, and Northland farmers, in general, are feeling the pressure.
Farms are businesses. They involve people and animals and soil and plants. They are already in the ETS through fuel and power, and so are feeling the pinch like other households.
The good is that they want to do the right thing. The bad is that it will cost. The ugly is that some will be out of business.
Eric Crampton is right – a lot of problems have no good solutions. But acknowledging that farmers are trying to find one would be a good start – and HWEN is part of the progress.
- Dr Jacqueline Rowarth, Adjunct Professor Lincoln University, is a farmer-elected director of DairyNZ and Ravensdown. The analysis and conclusions above are her own. jsrowarth@gmail.com
