KEY POINTS:
A delayed entry for agriculture into the Government's proposed emissions trading system was welcomed by farmers yesterday.
Federated Farmers of New Zealand president Charlie Pedersen said the policy recognised there was little to be gained from including agriculture now.
"At present the only way to reduce emissions is to reduce production," Pedersen said.
"Agriculture is New Zealand's largest industry and export earner and less production means less income for rural communities, provinces and city people, and less taxes for the Government."
Minister of Agriculture Jim Anderton said the emissions trading scheme would allow for flexibility in land use but would ensure people considered environmental costs when making decisions.
No other country was currently looking at bringing agriculture into an emissions trading scheme, although European Union reform of the Common Agricultural Policy was leading to a reduction in greenhouse gases.
The Government would invest $175 million during the next five years on a plan of action on land management and climate change, and on science and technology, Anderton said.
The forestry sector was expected to join the scheme on January 1 but agriculture would not enter until 2013.
Agriculture companies and processors were the preferred point of obligation, although no final decision had been made.
Fonterra therefore would not be obligated for agricultural greenhouse gas emissions of methane or nitrous oxide until 2013, but would have an obligation for energy and transport emissions.
Fonterra sustainability leadership team chairman Barry Harris said the co-operative was already educating farmers on ways of reducing emissions, nutrient budgeting, use of nitrification inhibitors and saving energy.
"We will be working with the Government to expand our efforts by setting up on-farm reporting and monitoring of greenhouse gases and the allocation of the extra funding will assist in achieving this," Harris said.
Initiatives in energy efficiency, transport and renewable energy had cut manufacturing carbon dioxide emissions by 28 per cent for each tonne of production since 1990, Fonterra said.
Federated Farmers' Pedersen said waiting until 2013 before including agriculture gave researchers more time to find ways to lower greenhouse gases without reducing incomes.
The agricultural sector would also be given a free allocation at a maximum of 90 per cent of the emissions in 2005 - to be phased out by 2025.
