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Putting NZ agriculture under the ETS is illogical

Putting NZ agriculture under the ETS is illogical

Labour’s announcement that it will move agriculture into the Emissions Trading Scheme in stages will cost the livestock sector at least $83 million in year one, rising to more than $830 million each year when fully implemented.

Federated Farmers agrees that action on climate change is needed. But as New Zealand farmers are among the most efficient producers of food on the planet, it is illogical to put the sector at a competitive disadvantage against export competitors, effectively shifting production to less efficient producers overseas.

"That will just add to overall global greenhouse gases, not reduce them," Federated Farmers climate change spokesman Andrew Hoggard says.

"Putting NZ agriculture under the ETS, combined with other potential new taxes (water, land, capital gains, wealth & assets) has the potential to cause a lot of cost and upheaval in provincial New Zealand."

Missing from Labour’s climate change policy is any talk of boosting funding for ongoing research to reduce biological agricultural emissions.

"We’re making strides in areas such as methane inhibitors, breeding techniques and vaccines that inhibit methane production. Like Federated Farmers, the Parliamentary Commissioner for the Environment has also called for acceleration of this research," Mr Hoggard says.

"Federated Farmers firmly believes that until our trading partners also treat their agricultural sectors’ biological emissions in a similar fashion, and we have effective mitigation techniques that will enable us to further reduce our emissions, then agriculture should stay outside the ETS."

Calculations of $83m of costs in year one (on 2015 herds, $41.2m dairy, $39.8m sheep & beef, $1.5m deer) under Labour’s proposal (90% free) are for methane from enteric fermentation, and nitrous oxide to farm soils. The figures also assume a $25 per tonne emissions price, which could easily go higher.

Federated Farmers appreciates Labour’s policy to reward farmers’ best practice and to shift the point of obligation to the farm-level rather than the processor-level.

"But how will this be measured in a practical sense? ‘Best practice’ isn’t defined, OVERSEER isn't up to the task as a farm emissions reporting tool.
"Federated Farmers is part of a working group looking at these issues and can’t see how Labour’s suggestions are workable any time soon."

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