ETS imposes cost on food production

The left are continually complaining about the cost of food.

But they are also criticising the government for taking a cautious approach to the Emissions Trading Scheme which would impose extra costs on food production.

Those who produce the food understand the damage it would do to their industries and the costs to consumers by forcing agriculture into the scheme before 2015 – or later if our trading partners don’t include agriculture in their schemes.

Federated farmers reminds us it is only biological emissions which are exempt.

“All farms and orchards have been in the ETS since July 1, 2010 – farms pay the  ETS on fuel and electricity, they pay it indirectly through the supply chain on  things as diverse as processing costs, animal remedies, wire netting, fencing,  feed and fertiliser.”

Dairy NZ says:

The Government’s confirmation that it will defer the entry of agricultural emissions into the ETS until at least 2015, pending a review to assess whether such technologies exist, is sensible and pragmatic, says DairyNZ General Manager Policy and Advocacy Simon Tucker.

“DairyNZ’s position is that agricultural emissions should not be included in the ETS until practical, economically viable mitigation technologies are available under farm-level conditions,” Mr Tucker says.

“We are pleased to see the Government take a considered view of where our country sits, relevant to our trading partners, to ensure we can make progress while still being competitive.”

“The dairy industry is committed to a strategy of reducing its greenhouse gas emissions intensity and maintaining its position as world leaders in low carbon intensity dairy production.

“New Zealand’s dairy sector is working through the challenge of finding practical ways to reduce our emissions by investing heavily in research.

“To-date our investment in dairy farm system research shows it is quite possible to make good progress in this area by making efficiency improvements on farms. But we do not yet have a reliable silver bullet.

“DairyNZ alone invests nearly $1m each year into reducing methane and other agricultural gas emissions through funding the world-leading science being carried out by the Pastoral Green House Gas Research Consortium (PGgRC).

“A similar amount of funding is being invested into a seven year DairyNZ-led research project where dairy cows are being evaluated to see how efficiently they can convert feed into milk while reducing emissions.

“DairyNZ has also maintained that New Zealand’s dairy farmers should not face a price on carbon until our trading competitors face similar and equivalent obligations. 

“It’s appropriate that this is also a factor in the Government’s 2014 review.

Dairying is one of the food producing industries which would face huge costs if the ETS was imposed on it. Greenhouse vegetable growers would also face very high costs and they too welcome the government’s latest announcement:

Wim Zwart, Chair of Tomatoes New Zealand, said that the move would be widely welcomed by the country’s greenhouse vegetable growers.

“The decision to extend transitional measures designed to reduce the initial cost impacts of the scheme beyond 2012 is particularly welcome,” said Mr Zwart.

“The ETS has had a major impact on production costs for many of New Zealand’s hothouse tomatoes growers, making them less competitive against those overseas growers who are not facing carbon costs.”

There are over 200 tomato growers in New Zealand who produce standard and specialty fresh tomatoes with a farm gate value of $90 million per annum. In 2011 the tomato export market was valued at approximately $15 million.

“This is a common sense decision that will allow our growers to continue to expand and grow the commercial export market,” added Mr Zwart.

“Many hothouse tomato growers have been investigating and introducing innovative measures to reduce emissions. This will provide them with some short term certainty around production costs and some more time to prepare for the long-term impacts of ETS.”

Food producers are putting large amounts of money into research in an effort to find cost-effective ways to reduce emissions.

Some progress is being made. Scientists at Waikato University are looking at how enzymes in the rumen might be manipulated to make dairy cows more productive and reduce the greenhouse gases they produce.

But they are a long way from finding something which can be used on farms.

Until that and other research produces results that can be widely applied there is nothing at all to be gained  by imposing extra costs on the industry and ultimately consumers.