Meat Industry Association unhappy with emissions pricing proposal

Concerns are mounting over the implications of an agricultural emissions pricing proposal for the rural sector. Photo / Gregor Richardson / ODT

New Zealand’s red meat processors and exporters have joined the chorus of criticism over the Government’s agricultural emissions pricing proposal, saying it will have “devastating consequences”.

In a statement, Meat Industry Association (MIA) chairman Nathan Guy - a former agriculture minister in National’s cabinet - said the red meat sector had a role to play in addressing climate change and supported an approach to pricing that would reduce emissions - “but not at the expense of massive production losses and hurting rural communities”.

The MIA rejected the Government’s proposed interim processor-level levy and wanted changes to the emissions price-setting process; proper recognition for genuine sequestration happening on sheep and beef farms; and levy relief for those farmers disproportionately impacted by emissions pricing.

The He Waka Eke Noa Primary Sector Climate Action Partnership’s recommended proposal was “carefully calibrated” to ensure disproportionate impacts were minimised across sectors, particularly for the sheep and beef industry.

But the Government’s proposed changes had upset that balance and, if implemented in their current form, would have “‘devastating consequences” for the red meat industry, rural communities, about 92,000 red meat sector jobs and New Zealand’s food production and export success, Guy said.

A delegation from the MIA recently met Prime Minister Jacinda Ardern, ministers and senior officials to discuss its differences and propose workable solutions, he said.

MIA chief executive Sirma Karapeeva said processors feared a fall in production, due to emissions pricing, would contribute to emissions leakage offshore.

Listen to Jamie Mackay interview MIA chair Nathan Guy on The Country below:

“The Government’s own modelling indicates that for every 1.6 million tonnes of emissions reduced from sheepmeat, there are 2.1 million tonnes leaked globally. This equates to 133 per cent of New Zealand’s emissions being leaked and contributing to an increase in global emissions.

“Given global demands for protein continue to rise, a gap left by a drop in production in New Zealand would be filled by less efficient producers, undermining global emissions reduction goals,” she said.

The Government’s modelling suggests a 20 per cent drop in red meat production, which would have a significant impact not only on individual farmers but also on the communities they lived in.

“A 20 per cent reduction would mean reduced processing volumes, jeopardising export receipts as well as employment in rural communities,” Karapeeva said.

“The sheep and beef sector contributes nearly 92,000 jobs nationally, and $4.6 billion in household income. In some regions, the sector accounts for 10-12 per cent of the regional economy and employment.”

Reduced production due to livestock availability or land-use change would mean higher unit costs for processors, affecting long-term profitability to the extent that consolidation or closure of plants would have to be considered, she said.

Last week, Beef + Lamb New Zealand chairman Andrew Morrison said the Government’s proposal had caused concern and anger in rural communities “up and down the country”.

“The Government must address key questions around equity and fairness before proceeding with emissions pricing.”

The Government has said the proposal would mean New Zealand farmers would lead the world in reducing emissions and help give New Zealand a competitive advantage in a green-conscious global marketplace.