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Opinion
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Andrew Luddington
Lincoln
From the Editor
The year for ambition and action
NEW data from NIWA shows 2022 was New Zealand’s hottest on record, beating out 2021 for the title.
With increased heat comes more extreme weather and we had that too – at great cost to the farming sector.
The Insurance Council is urging the government to provide funds to councils for mitigation projects.
“As the long-term warming trend continues, we can expect this to keep happening,” council boss Tim Grafton said.
Mitigating warming itself is still a work in progress – and farmers will soon join the ranks of businesses paying for their emissions.
Many argue that this method is an impediment to progress, rather than a driver of it.
But a new study of the European Union’s emissions trading scheme shows it is working as designed.
Emissions dropped 10% over the time of the study, and business revenues and asset values grew.
In this case, at least, the stick has turned into a carrot.
It’s important to note that the EU ETS does not cover farming, which has bigger challenges in accessing new technologies to mitigate emissions.
Nonetheless, it’s another piece of evidence that shows well-designed regulation can be a driver of growth that satisfi es both shareholders and the environment.
Right now we have a competitive advantage over our food-producing rivals when it comes to carbon effi ciency.
But if we take a look at the plans the important players have in place, we have reason to worry.
Denmark, Uruguay, the United Kingdom, Ireland and others are all looking to the future with ambition and action.
A new entrant in Waikato’s dairy processing industry, Happy Valley Nutrition, announced recently it had signed a deal to supply a big chunk of its future production to global dairy giant Arla.
HVN is creating its own fi eld of dreams in Ōtorohanga and is looking for other meaningful buyers to take up its highprotein powder.
One might ask why Denmark’s Arla, the ninth biggest producer of milk in the world, wants more product from the other side of the world.
Well, a quick visit to the website shows the dairy giant is going all-in on climate and sustainability initiatives, and New Zealand milk certainly helps tell that story.
It’s committed to helping to limit global warming to 1.5degC and is incorporating the United Nations’ Global Goals for Sustainable Development into its business.
It’s also targeting a 30% reduction in on-farm emissions by 2030. That’s a much more challenging target than NZ farmers are looking at over the same time period.
Last year a piece of research comissioned by DairyNZ showed NZ was among the most carbon-effi cient producers in the world. That mantra has been repeated endlessly since.
Our dairy products have a carbon footprint of 0.77kg of carbon per kilogram of fat and protein corrected milk. Denmark’s fi gure is 0.9kg of carbon per kg of milk.
Given the two nation’s stated ambitions, our competitive advantage will be gone in a few years.
This begs the question – would Arla buy from our national dairy herd in 2030? I DON’T know if I will laugh or cry when I get to see a green cross on a Kiwi farm. This cross says “These new regulations will be the end of agriculture, so RIP.”
But the cross has numpty nimbyism written all over it. (NIMBY: Not In My Back Yard will I make any changes.) It will do us as much good as your Alan Emerson, who once said in these very pages that fresh water that is allowed to go out to sea is a “criminal waste”, asked “Who cares about a few impure waterways?” and made a case for bringing back DDT.
The dominant British supermarket, Tesco, has just given us an update of what its food buyers want. It is no longer the status quo. They will get their way and no, they will not be fobbed off by importing cheaper product with disingenuous environmental and animal welfare claims.
A while ago the new owners of Hawea station seriously rattled the old school by planting 17,000 native trees and making life as comfortable as possible for their livestock. The fi rst farm in Australasia to be truly carbon neutral, apparently.
I say what a fabulous achievement and I applaud the owners of that station with a standing ovation. And I am going to work out how to do the same with my farm.
The message is getting clearer day by day. Change radically or leave.
Bryan Gibson Managing editor
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Meet the people behind the farm gate
In my view ... Gas pricing must not threaten food production
Graham Pinnell
Retired Cambridge drystock farmer
THE pre-Christmas announcement on the He Waka Eke Noa proposals apparently describes high-level decisions by the ministers of agriculture and climate change on emission pricing in spite of admitting that their analysis of submissions is incomplete.
How can that be, when they have a duty to avoid predetermination by keeping an open mind while considering submissions?
Their choice of the HWEN farm-level system is not fit for purpose. Instead, the starting point should be to understand the legislation that empowers the making of the regulations to ensure consistency. The key point that has been missed is that the purpose statement in any legislation has pre-eminence, as the meaning of the rest of an act must be ascertained “in light of its purpose”, as required by the Legislation Act 2019.
Embodied in the purpose statement of the empowering legislation, the Climate Change Response Act of 2002 (CCRA), are our international obligations of the United Nations Framework Convention on Climate Change, the Kyoto Protocol and the Paris Agreement.
Under the Paris Agreement there are two relevant obligations with regard to food production. In the preamble New Zealand and other parties to the agreement recognise “the fundamental priority of safeguarding food security and ending hunger, and the particular vulnerabilities of food production systems to the adverse impacts of climate change”. In Article 2.1(b) is the obligation to foster low greenhouse gas emissions in a manner that does not threaten food production. The Framework Convention and Kyoto Protocol have similar requirements.
This means that while we are required to aim for the 2030 and 2050 emission reduction targets, the methods used should not threaten food production. While the burning of fossil fuels is a harm deserving of taxing through the ETS, food production is not considered internationally to be a harm and so is not deserving of a polluter-pays tax. Farm-level pricing comprehensively charges for all emissions and is therefore a polluter-pays tax.
Instead, pricing should be used selectively to incentivise emission reduction in ways that do not threaten food production. Specifically, emission pricing should be confined to only incentivising mitigations. Any other reduction in methane emissions requires a reduction in pasture and stock numbers, leading to reduced food production.
The purpose statement of the CCRA takes an international perspective. This means emission intensity is important, that is, low-emission food produced in NZ should not be priced out of existence, resulting in emission leakage and an increase in global emissions. Low-emission food is exactly what the open market has delivered ever since the subsidies of the Muldoon era were removed. There is an extremely high free market price incentive for farmers to improve productivity through animal and plant breeding, together with fully feeding livestock and optimising farm system management to grow fodder having high palatability and energy density. The climate dividend is low emission intensity. There is no market failure in the drive for low emission intensity. A reasonable conclusion is that no regulatory barrier should be placed in the way of the market driving further improvements in emission intensity.
This approach by no means gives farmers a reason to do nothing in response to the climate crisis we face, as viable mitigations will emerge. It is an approach we can take to our markets and use in trade negotiations with pride as it is entirely consistent with our legislation, our international climate obligations, and our role in promoting unsubsidised trade to the world.
The administration and compliance costs would need to be funded by levies on farmers. These costs for a mitigation incentive scheme are minimal compared with those for the planned farm-level reporting system. A mitigation incentive scheme would be a high integrity system as it would be based on independently verifiable evidence. Farmers would only need to file claims for the mitigations they undertake. The only audit requirement would be disclosure of the invoices for the mitigations that were adopted.
Now let’s contrast this scheme with the government’s farm-level system that apparently has the support of the remaining HWEN partners.
The government maintains that the primary consideration is ensuring emission reduction targets are achieved. Other factors such as socioeconomic impacts are relegated while no mention is made of the need to safeguard food production. The 10% reduction in methane by 2030 requires a 20% reduction in sheep, beef and deer numbers if no mitigations are approved. Even with mitigations, food production remains threatened as reducing pastoral production may be cheaper than adopting the mitigations. If the government persists with this approach, it faces the risk of judicial review.
The farm-level reporting is hugely complex. For the scheme to have integrity, the level of detail required is much greater than either HWEN or the government is admitting. Reporting must be extremely accurate as the government will need to have confidence as to whether the reported trend towards the 2030 target of 10% reduction in methane is likely to be achieved. It requires reporting of all livestock tallies, weights, and production as they change throughout the year, including all purchases, births, sales, deaths and missing stock. Not only does that involve farmers in a lot of reporting, but it also involves the regulator in a lot of auditing and enforcement, the costs of which will be levy-funded by farmers. That will force some farmers to the wall.
An unresolvable challenge in farm-level reporting of emissions is the incentive for farmers to under-report and evade the levy. If the research indicating income tax evasion of 20% is a reasonable benchmark, then we may witness an apparent emission reduction that exceeds the 10% target reduction long before 2030 without any real reduction having occurred.
A sophisticated compliance and enforcement regime will be required but is unlikely to be successful. For example, just imagine trying to verify the number of ewes on a high-country station. An experienced stockman would have to be contracted to tally the flock after a muster. The entire station would have to be flown by helicopter to check for stragglers or a withheld mob, and those under trees would remain unaccounted for. Then a reconciliation would have to be made back to the reporting period being audited, accounting for age classes or weights of livestock, births, deaths and missing. This data would have to be supplied by the farmer but has no audit trail. The only independently verifiable data available for the reconciliation would be sales and purchase invoices.
The only thing a farm-level scheme does that a mitigation incentive scheme doesn’t is calculate how much grass each farm produces each year in order to translate that figure into methane emitted. As grass production is essentially fixed, there is no point in undertaking this data-intensive procedure unless the government is intent on forcing land use change out of pastoral farming by punitive pricing.
This scenario is completely avoidable. Good on Federated Farmers for taking on board these matters in their submission and calling for a pricing system that only incentivises mitigations so that food production and emission leakage are not threatened. Meanwhile, Dairy NZ, Beef + Lamb NZ and the remaining HWEN partners refuse to acknowledge that their proposal threatens food production, would lead to emission leakage and require needlessly high and destructive levies to pay for the new army of auditors and administrators.
In their desperation to stay inside the tent with the government they are failing farmers and providing the government with a foil to deflect farmer submissions.
It is high time that the government and the HWEN partners consider submissions with open minds and either accept a mitigation incentive scheme that is simple, has integrity and a modest cost or give good reasons for remaining wedded to the monster that HWEN has created.
PRODUCERS NOT POLLUTERS: Farm-level pricing comprehensively charges for all emissions and is in effect a polluter-pays tax – entirely inappropriate when it comes to food production, says the writer.
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Buckle up for another bumpy ride in 2023
Alternative view
Alan Emerson
Semi-retired Wairarapa farmer and businessman: dath.emerson@gmail.com
WELCOME to 2023. If you thought 2022 was a wild ride, buckle your seatbelts for this one.
We’ve consistently read how 2022 was a horror year for farming and in many aspects it was. There were, however, quite a few positives to come out of it.
The first was the sector leadership shown by Federated Farmers president Andrew Hoggard. He had a hard act to follow with Katie Milne but he’s stepped up and done it well.
For a start, Hoggard isn’t overawed by the Wellington scene, be it political or bureaucratic. He will succinctly present a submission as he sees it without fear or favour and that’s unusual from many of our sector representatives.
His open letter regarding the He Waka Eke Noa (HWEN) changes back in October last year was masterful, as was his summary of the essential freshwater package.
Hoggard has the benefit of a strong policy team to back him up, an accomplished media group and a sophisticated farmer research model, but it is him representing grassroots farmers and he does it well.
His factual, research-based, uncompromising and unemotive advocacy on issues is a great asset for the productive rural sector to have.
Hoggard’s deputy, Wayne Langford, is also doing his bit for the image of rural New Zealand.
Langford co-founded Meat the Need with Siobhan O’Malley, a Hokitika sharemilker and provincial entrepreneur.
They get stock donated by farmers processed by Silver Fern Farms and distributed to the needy.
Milk can also be donated to be processed by Fonterra and Miraka.
Late last year in a Telethon-like fundraiser, Meat the Need aimed to get enough meat donated for 1 million meals. They exceeded it by 20% to get 1.2 million, almost enough to give one in four Kiwis a meal.
Meat the Need is promoted as NZ farmers feeding NZ families via City Missions and food banks. It is a most worthwhile charity and provides a real and much-needed boost to the image of farmers and farming.
Although there’s much water to go under the bridge, I also believe that the fact the government and farmers are still consulting on HWEN is positive. The sector presented an option to the government, the government came back with a response the sector didn’t like and further changes were made.
While we’re yet to see the final draft, I’m pleased that dialogue is continuing.
My personal position, which I’ll discuss in a separate article, is that NZ would be crazy to lead the world in taxing food production. In addition I’d prefer that Feds were part of the discussion and not excluded. Solely relying on what I consider the political sycophancy of Beef + Lamb NZ and DairyNZ doesn’t fill me with happiness.
I’m pleased that the government has committed funds to properly research regenerative agriculture. There has been considerable comment on the practice, most of it without any scientific base, so it’s good we’re going to get some definitive science-based research.
Announcing the initiative in September, Agriculture Minister Damien O’Connor told us that the government’s aim was to “prove to the world why New Zealand food and fibre should always be the number one choice”.
That’s a difficult position to argue against.
I’ve spent hours considering the various research projects on regenerative agriculture and the only scientific study I could find was one recently completed in Australia. The result, interestingly, was that if you want to go bankrupt, adopting regenerative practices is a good start – so it will be good to get a definitive NZ study.
The funds allocated are considerable, with over $26 million put aside, with Massey’s School of Agriculture and Environment being the lead agency. As research partners include AgResearch, Lincoln University and Dairy Trust Taranaki, we can expect a robust scientific study that will be peer reviewed.
I’m also really pleased with the government’s rural connectivity plans.
We’ve been on Wifi for years and it works really well. So well, in fact, that I was surprised the previous government went to fibre to the extent it did.
In today’s world you’re lost without a good internet connection and rural NZ does present challenges. I’m pleased the government has accepted that, invested in the scheme and pledged to bring an internet connection to everyone, no matter how remote.
Finally, the political sphere has become even more interesting. O’Connor knows farming and the political scene, and has achieved much, which would be difficult considering the cabinet lineup. Kieran McAnulty and Jo Luxton have also shown they understand the sector and are prepared to listen and assist.
From the opposition parties, ACT’s Mark Cameron has been outstanding. He knows the sector and is energetic supporting it. National has been, in my view, missing in action.
All the very best for 2023. As I said, it will be an interesting year.
NOT OVERAWED: Federated Farmers president Andrew Hoggard was masterful in his approach to the He Waka Eke Noa developments in October last year, Alan Emerson says.
Up the creek but not without a paddleboat
From the ridge
Steve Wyn-Harris
Central Hawke’s Bay sheep and beef farmer: swyn@xtra.co.nz
THE wonderful thing about making new year predictions is what are the chances that anyone will remember in a year and even if they do, will they trouble themselves to hold you to account?
But you can never be too sure, so it’s best to predict certainties or leave some vagueness around the forecast. It works well for economists, horoscope writers and futurists.
I can tell you that the wet areas will get drier, and the dry areas will get wetter. At a point sometime in the future.
One of the best climate forecasts I saw last year was by Rob Sharpe, the Sky News Australia Meteorologist. He turned out to be right on the money.
Back in October I read a piece by him saying that although La Niña was waning, don’t expect the massive amounts of rain in parts of Australia and here in New Zealand to come to an end.
I’d found this particular piece because I was searching to see if the Tongan volcano eruption had resulted in our wettest winter in my career.
It was a year ago on January 15. Those here at the house heard the sonic boom of the eruption but I was on my motorbike on the farm and annoyed to have missed this epic sound from so far away.
The volcano went off with the force of about 100 Hiroshima nuclear bombs.
Because the volcano was under the water but not so deep (150m) that water pressure suppressed its power, the superheated sea water became explosive steam and headed into the upper reaches of our atmosphere.
It seemed logical that if this eruption had ejected 50 million tonnes of water into the atmosphere, the old adage of what goes up must come down comes into play.
They reckon about 4 million tonnes of this went so high that it escaped gravity and went into space, which has never been observed before.
That space water vapour even influenced a thing called the equatorial electrojet, which normally runs west to east in the ionosphere but reversed direction because of the water.
But I was wondering about the other 46 million tonnes up there, and was that why I spent much of the year in gumboots and leggings and am still wearing them in January?
Well, the volcanic event may very well have contributed to our record rainfalls and may still be in play with the continuing rain.
The southern hemisphere has had 20% more water in the stratosphere than before the eruption.
Some of that water vapour has formed clouds and fallen back to earth. That makes sense.
But there are other factors in play as well.
For a start, the event put a lot of extra energy into the atmosphere, creating more turbulence than usual and thus more storm systems.
The extra water vapour up there has had a slight increase on global warming but because Antarctica has had a blanket of extra water vapour over it reflecting sunlight back into space, the Antarctic has been colder than usual.
This chilly air has increased the polar vortex, which means the
Time to be reasonable and fair in victory
Meaty matters
Allan Barber
Meat industry commentator: allan@barberstrategic.co.nz, http:// allanbarber.wordpress.com
IT LOOKS too much of a stretch to imagine there will be a speedy resolution to the war in Ukraine unless Russian premier Vladimir Putin has a Saint Paul-like conversion on the road to Kyiv or quite simply runs out of troops and firepower. But peace between the New Zealand government and the farming sector may be about to break out following the last-gasp release of Wellington’s report on Agricultural Emissions Pricing under section 215 of the Climate Change Response Act, holding out hope the main disagreements on this thorny issue can be overcome.
The Meat Industry Association (MIA) is “cautiously optimistic about the government’s changes to its agricultural emissions proposal”, while Beef + Lamb NZ (BLNZ) says the report is a significant improvement on what was released in October, although the high-level nature of the response means there are still important details to be confirmed.
The key issues to be resolved are, in summary: • The warming targets for which the latest science will be taken into account including the use of
GWP* as opposed to GWP100; • The impact of offsetting rules within the Emissions Trading
Scheme on sheep and beef farming; • The price level for methane to be applied at the lowest level necessary; • The role of the industry in price setting, ensuring equitable treatment of sheep and beef farmers or compensating them appropriately; and • Certainty about the recognition of sequestration of all vegetation categories by 2025.
The concessions made by the government in its pre-Christmas report appear to accept in principle virtually all the points raised by He Waka Eke Noa (HWEN) in its original submission which were rejected or modified in the government’s October response. The only major points of contention, apart from achieving agreement on the detail, appear to be the government’s desire to retain the option of a processorlevel levy as a backstop and the primacy of the Climate Change Commission in determining the price of emissions.
The first question that arises from this sequence of events is why the government persisted in alienating the agricultural sector for another two months before suddenly accepting almost everything it had previously rejected. The answer is probably the inevitable tension between the perspectives of Labour’s Agriculture Minister Damien O’Connor and the Greens’ James Shaw as Minister for the Environment. O’Connor has amply demonstrated his support for the agricultural sector, despite having to follow his party’s line on emissions, whereas Shaw is compelled to promote the more extreme Greens’ view.
It would appear Shaw’s more purist perspective won out in October, when the ministers no doubt hoped its response would be accepted without too much objection, but the industry’s angry reaction must have made them realise it was an unwinnable battle. There is too much at stake for the government to get completely offside with the farming sector for two reasons: its huge contribution to the country’s economy, especially in the absence of tourism and education for the past three years, and the potential for the whole HWEN partnership
TREAD LIGHTLY: Allan Barber says the agricultural sector in NZ appears to be winning the PR battle, ‘but it would not take much to tip it the other way’.
The HWEN partners’ demands are absolutely understandable, but they would do well to recognise the extent of the recent concessions and the straitjacket the government has to wear.
to blow apart, leaving the government with egg on its face without a scheme to implement.
The reaction of Groundswell and its supporters, as well as the refusal of Federated Farmers to join its HWEN partners in responding to the initial government response, will have made the ministers realise they faced more extreme farmer resistance than that from HWEN partners, notably BLNZ, MIA and DairyNZ. The concerns of Māori farming incorporations must also have given them pause. Politics, after all is the art of the possible, and before the release of the December report it was looking increasingly impossible to achieve willing participation in a core government election commitment.
The government’s intention is to finalise all the details of its emissions pricing scheme early this year, which hopefully is not too ambitious a target, given BLNZ and MIA’s list of topics for discussion. These are presumably echoed by Federated Farmers, who may be less tolerant in their requests.
While the HWEN partners’ demands are absolutely understandable from the perspective of the members they represent, they would do well to recognise the extent of the most recent concessions and the straitjacket the government has to wear. It is restricted by the commitments it has made in global forums like the United Nations, as well as the attitudes and opinions of a sizeable and noisy percentage of the electorate as it faces a general election later this year.
In the words of Abraham Lincoln, you can’t please all the people all the time, so it is reasonable to expect the government to attempt to please as many as it can as much as possible. But it must also weigh the economic consequences of hamstringing NZ’s largest contributor to its GDP and export income in the face of serious farmer and agricultural sector opposition.
On the other side of the coin, the HWEN partners also have to weigh up the extent to which they can afford to play hardball in the final discussions with the government to arrive at a negotiated agreement which is fair and equitable for farmers, while at the same time able to be sold to overseas parties and the NZ electorate.
The last thing farmers need is to be accused of getting away without accepting their obligation to make a sufficiently serious commitment to climate change mitigation. I sense the agricultural sector in NZ is currently winning the PR battle, but it would not take much to tip it the other way. It is preferable to complete a historic agreement on fair and reasonable terms acceptable to as many people as possible, including farmers.
Continued from previous page
powerful westerlies have stayed closer, swirling around Antarctica, and means southern Australia and NZ have had fewer cold fronts and less wind.
This means the east coasts of both Australia and NZ will end up with more onshore winds bringing extra wet weather.
The meteorologist has been right so far and did say back in October that this would continue through the summer.
Time will prove whether he gets this right as well.
I’ll tell you one other strange and impossible-to-predict outcome of the Tongan eruption bringing
WATER WAY TO GO: The Hunga Tonga–Hunga Ha’apai eruption this time last year left quite a legacy of water in the atmosphere, affecting winds and temperatures.
more onshore conditions on this coast.
Before Christmas I was out at one of our local beaches.
I thought I could spot an overturned dinghy in the surf and rushed off to see if anyone needed help.
No sign of any people so I dragged the craft out of the surf and up onto the beach.
It wasn’t a dinghy but a paddleboat like you see at resorts. Others find useful things like craypots and buoys, but this must be a unique bit of beachcombing. I got the ute and had quite a struggle getting it onto the back and strapping it down.
We asked around the local beaches and no one reported missing one, nor had ever seen anyone with one in the sea.
It had small mussels growing on it so had been in the ocean for a few weeks.
I googled to see if some fool had gone missing during an attempt to cross the Pacific on a paddleboat or if anyone was reporting one lost, but nothing.
My best guess is that it had blown off a superyacht or cruise ship.
The only thing broken was the rudder, so I jury-rigged one and the local kids had great fun over Christmas and the New Year on the estuary.
I ordered a new rudder from Texas on New Year’s Day for US$50 and an eye-watering $50 to FedEx for delivery. You get what you pay for because it arrived in an astonishing six days despite New Year shutdowns and coviddisrupted deliveries.
Nearly everyone else at the beach has a fishing boat but I’m the only one with a paddleboat.
