No free ride for farming

July 5, 2012

Federated Farmers has put the record straight about the”free ride”   which the opposition think farming is getting through delaying the admission of agriculture into the Emissions Trading Scheme and the way it is being reported:

Some media are reporting the latest revision to the ETS as ‘the Government excluding farmers from the Emissions Trading Scheme until 2015’.  This is factually incorrect.  

It is vital for accuracy to refer to the 2015 delay as applying to biological emissions only (methane and Nitrous Oxide from livestock and soils).

All New Zealand farms and orchards have been in the ETS since 1 July 2010.

We wish to counter a belief among some media that farmers do not pay the ETS on farm inputs or that farmers somehow receive a rebate.  Both these assumptions are incorrect.

Like all New Zealand businesses, farms pay the ETS on fuel and electricity they directly consume.  They also pay it indirectly through the supply chain on things as diverse as processing costs, animal remedies, wire netting, fencing, feed and fertiliser. Indirectly, it also affects the cost of professional services farmers consume too. 

There are few exemptions to the ETS and apply mostly to international air travel and international bunker fuels to and from New Zealand.

The cost of the ETS on dairy, horticulture, sheep, beef and deer: The cost impact of the ETS on dairy, horticulture, sheep, beef and deer farmers is conservatively estimated to be a minimum of $106 million per annum:  Fonterra Cooperative Group estimates its individual dairy farmer suppliers directly pay $3,700 a year in carbon costs for fuel, energy and their share of the carbon costs being paid by Fonterra for processing emissions (approximately $38.8 million per annum).   Beef+Lamb NZ, Meat Industry Association & Deer Industry New Zealand calculated the individual cost on sheep, beef and deer farms of the ETS, to be $2,000 per annum (approximately $27.8 million per annum)  HortNZ, in its 2011 submission, highlighted smaller greenhouse glass operators facing additional ETS related costs of $30,000 per annum.  In 2008, it estimatedthe ETS would add industry costs in excess of $40 million.

These compare to typical households paying additional ETS related costs of around $133 per annum.  It should be noted that many farms and orchards are households too.

Farmers are paying for research which is likely to lead to practical ways to reduce biological emissions.

But in the meantime there is no point imposing extra costs on food production with absolutely no benefit for the environment.

Agriculture excluded from Australian carbon tax

July 12, 2011

Australia’s decision to exempt agriculture from its carbon tax has political implications for farmers here.

National has consistently said the Emissions Trading Scheme won’t be imposed on agriculture until our competitors face a similar regime.

Labour’s policy is to force agriculture into the ETS in 2013.

National  understands there’s no environmental gain to imposing an ETS on farming until there are scientifically proven methods farmers can use to reduce emissions. It also understands the economy would suffer if our competitors didn’t face similar costs.

Labour just wants to tax farmers more – the impact on the environment and economy are irrelevant to them.

The difference is clear and every farmer should take that into account when voting.

Labour does favour for National and farmers

May 24, 2011

Labour’s promise to force farmers into the Emissions Trading Scheme in 2013 has done both the National Party and farmers a favour.

It’s good for National because it’s further proof that Labour has declared open season on farmers. That will make it much easier to get support for the blue team not just from farmers but also from those who work for, service and supply them and anyone else who understands the importance of the primary sector in this country.

Just how damaging the policy would be is spelt out by Beef + Lamb NZ:

Including livestock emissions in the ETS, in isolation from every other country in the world would be economic suicide for New Zealand and could spell the end of the sheep and beef sector in this country, Beef + Lamb New Zealand is warning the Labour Party.

Responding to Labour’s election year announcement that it would bring agriculture into the emissions trading scheme in 2013 and use the money to fund research and development tax credits, B+LNZ Chairman, Mike Petersen said the policy would penalise an $8 billion sector that is heavily supporting New Zealand’s export led recovery.

“At a time when a strong export sector is even more vital to New Zealand’s economy, we have Labour harking back to old ideas and their previously held view that farming is a sunset industry.

“What is most insulting is the proposal to use the emissions tax to fund R&D credits when the pastoral sector is already contributing significantly to climate change research and in fact is the only sector which has set up its own consortium (Pastoral Greenhouse Gas Consortium) to do so.

“What Labour seems to be proposing is to use the pastoral sector’s money to fund research for other industries that have not invested in climate change science.

“If that isn’t irksome enough for sheep and beef farmers, Labour seems to have completely forgotten that the sheep and beef sector has reduced its GHG emission levels significantly below Kyoto Protocol requirements and has so far produced carbon credits worth over $800 million dollars which have been pocketed by the Government.”

Bringing in livestock emissions would impose unsustainable additional costs on sheep and beef farmers, already under assault from massive farm input price inflation that has reached a staggering 41% over the previous 10 years, Petersen said.

“And let’s be clear, farmers are already in the ETS – they pay it on fuel and energy just like every other New Zealander. They are also investing in mitigation technologies but until there are viable tools for sheep and beef farmers to use to mitigate emissions on farm, it’s crazy to penalise them when no other country in the world is putting on-farm emissions into an ETS,” Petersen said.

Sheep and beef farmers through B+LNZ are funding the Pastoral Greenhouse Gas Research Consortium and with other sector organisations have invested $37 million since 2002. The Consortium is developing solutions for methane and nitrous oxide mitigation.

“Labour’s policy is effectively imposing cost on the sheep and beef sector which will make us uncompetitive in global markets. B+LNZ estimates of the cost to sheep and beef farmers under the Labour legislation was over $40,000 per farm at a carbon cost of $25.00 per tonne.

“In turn, this will ruin an iconic export industry, destroy our vibrant rural communities and, most ironically, lead to increases in global emissions when carbon efficient livestock production in New Zealand is replaced by comparably inefficient farming in other countries,” Petersen said.

If Labour’s policy is so bad, why is it good for farmers? 

Because it’s reinforced the government’s position that animal emissions won’t be taxed under the ETS unless other countries do it too  and there’s almost no chance of that happening in the next couple of years, if at all.

New Zealand’s agricultural sector won’t face the cost of the emissions trading scheme in 2015 unless other countries come to the party, Prime Minister John Key says.

The Prime Minister told reporters at his weekly post-Cabinet press conference New Zealand can’t “throw our biggest export earner to the wolves” by bringing agriculture under the ETS without other countries doing their part.

The government will only include agricultural emissions if farmers have a“reasonable chance” of competing internationally.

The sector was given a holiday from inclusion until 2015, though that’s only if a review, due in July, recommends requiring agricultural emissions be covered by the scheme.

“The test is whether other countries join them,” Key said.“We don’t live in some magical little world, where New Zealand can impose whatever costs it wants and say that that has no impact on our ability of our exporters to compete.

“We have the only unsubsidised agricultural sector in the world, and you don’t see our farmers moaning about that, and nor do you see any political will to change that.”

Labour isn’t suggesting bringing livestock into the ETS to reduce emissions. Its primary motivation isn’t environmental, it’s to raise more taxes.

The anti-farmer rhetoric in the past week suggests it has a secondary motivation to punish primary producers for political reasons and drive a wedge between town and country.

In doing so it will produce a gap which National is willing and able to fill.

No point taxing what you can’t change

November 18, 2010

The government has always made it clear agriculture wouldn’t be included in the Emissions Trading Scheme unless our competitors did it too.

None of them have any intention of doing so in the near future and Climate Change Minister Nick Smith has given a very clear message that it’s unlikely we will either:

New Zealand farmers are unlikely to be brought into the emissions trading scheme in 2015 unless scientific advances are made in reducing animal emissions and our trading partners make giant strides in putting a price on carbon, the Government says.

Speaking at the Federated Farmers National Council yesterday, Climate Change Minister Nick Smith noted the Government had already said it would not proceed with the inclusion of agriculture and other sectors until it sees comparable progress from other countries.

Including agriculture here when it’s not done anywhere else will make our produce less competitive. It won’t make any improvement to global emissions and may even make them worse if production drops here and increases in other places where it is less efficient.

The requirement for scientific advances before agriculture is included is also important.

The point of emissions taxes is to change behaviour.

Science has not yet come up with anything which will help to reduce agricultural emissions so there’s no point taxing them.

This doesn’t mean New Zealand is doing nothing to fulfil it’s Kyoto commitments. The Global Research Alliance, which was a New Zealand initiative at the Copenhagen conference last year, is attracting praise and investment from around the world.

Turnbull down but not out

December 8, 2009

A former party leader can go quietly or stay and fight.

Malcolm Turnbull, who was deposed as Australian Liberal Party leader last week, has a blog post Time for Some Straight Talking on Climate Change  which indicates he’s doing the latter:

While a shadow minister, Tony Abbott was never afraid of speaking bluntly in a manner that was at odds with Coalition policy.

So as I am a humble backbencher I am sure he won’t complain if I tell a few home truths about the farce that the Coalition’s policy, or lack of policy, on climate change has descended into.

First, let’s get this straight. You cannot cut emissions without a cost. To replace dirty coal fired power stations with cleaner gas fired ones, or renewables like wind let alone nuclear power or even coal fired power with carbon capture and storage is all going to cost money.

To get farmers to change the way they manage their land, or plant trees and vegetation all costs money.

Somebody has to pay.

So any suggestion that you can dramatically cut emissions without any cost is, to use a favourite term of Mr Abbott, “bullshit.” Moreover he knows it.

The whole argument for an emissions trading scheme as opposed to cutting emissions via a carbon tax or simply by regulation is that it is cheaper – in other words, electricity prices will rise by less to achieve the same level of emission reductions. . .

Maybe Tony Abbott and Phil Goff should consult each other on how to handle the choir when some of its members are singing a different song.

Hat tip: Larvatus Prodeo

Learning to play the game

November 30, 2009

The ETS has been enacted and whether or not we like the rules we’re going to have to learn to play the game.

Most attention has been on costs, but there will also be opportunities.

I’ve yet to find anyone who fully understands what’s involved in carbon farming, but most reasonable sized farms in our district have hillsides and gullies which are probably better suited to trees than crop or pasture.

Farmers may also be able to develop micro-generation of power from small wind farms.

There is also an opportunity at Copenhagen, to negotiate changes to the one-size-fits-all rules which disadvantage New Zealand because most of our emissions come from agriculture, 94% of which is is exported, and we grow exotic trees well for forestry.

In Friday’s print edition of the National Business Review, Federated Farmers’ president Don Nicolson gave his wish list for changes:

* Excluding emissions from crops and farm animals from the successor to the Kyoto protocol; or if emissions from primary food production are included it needs to take a global not an individual country perspective. That would allow efficient producers like us to “over emit” because we “over produce” food, most of which is exported.

* International funding for the Global Alliance concept to tackle agricultural emissions.

* The inclusion of pre-1990 forests as permanent forestry sinks.

*The ability to count non-forest crops, plantings and grasses for credits (eg riparian plantings which aren’t Kyoto compliant).

* Global standardisation of foot printing methodologies.

* Inclusion of territorial seas and Exclusive Economic Zones as permanent carbon sinks.

How much progress our negotiators make on these points will be one measure of whether the focus is on making a positive difference to the environment or just on politics.

NZ a square peg in round ETS hole

November 24, 2009

New Zealand’s problem is that we’re different.

Primary production and industries based on it are our bigeest export earners; almost all our forestry is from exotic species; we have relatively little heavy industry and the bulk of our power is already from renewable sources.

The Kyoto Protocol wasn’t designed for countries like us.

The heavy reliance on primary production is much more common in developing countries. But around half our emissions come from animals and there is little, short of reducing stock numbers, we can do to reduce them immediately. Research is being undertaken to reduce emissions from livestock but practical, affordable solutions may be years away.

The rules requiring new trees to be replanted where old ones were felled was aimed at protecting rain forests and indigenous species. It seems no-one considered that a clause aimed at protecting indigenous trees shouldn’t apply to exotic timber species in a country where they grow as well as they do here.

Our private vehicle ownership is high by world standards but that reflects our relatively small, widespread population which means that public transport is neither practical nor affordable in many places.

New Zealand is a square peg and we were ill served by the negotiators who tried to fit us into the round ETS hole.

I have a lot of confidence in Tim Groser who will be working on our behalf at the Copenhagen summit.

But I thought the whole thing was a dog’s breakfast from the start and my concerns are even greater now that there are questions over manipulation of climate change data.

Over at Sciblogs Aimee Witcroft raises the possibility the leaked emails have been doctored and points to a Guardian story  on the issue. It quotes Prof Bob Watson, the chief scientific advisor at Britain’s Department for the Environment, Food and Rural Affairs who said,

“Evidence for climate change is irrefutable. The world’s leading scientists overwhelmingly agree what we’re experiencing is not down to natural variation.”

 Also at Sciblogs Gareth Renowden isn’t convinced by the leaked material.

For a contrary view see:  Ian Wishart,  Adolf at No Minister,  Roarprawn, Whaleoil,  Not PC, Poneke,  Mr Tips at NZ Conservative, Thoughts from 40 South, and Something Should Go Here  who says: 

I’ll say it a thousand times, climate change activism is about politics, not science.

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