Friday, March 29, 2024

Don’t kill the cash cow

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DairyNZ chief executive Dr Tim Mackle is calling on the Government to revise its 2050 methane reduction target in the Zero Carbon Bill to one that does not put New Zealand’s world-leading dairy sector at risk.
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Kiwi dairy farmers are world-leading producers of low-emissions milk. 

We have a reputation for sustainability and we want to keep it that way. 

While we are committed to playing our part in the transition to a low-emissions economy alongside the rest of New Zealand it must be done fairly and consider the science as well as the economic impacts.

There is more in the Zero Carbon Bill that we agree with than we disagree with but we have serious reservations about the Government’s proposed 2050 methane reduction target of 24–47%. 

We believe it goes well beyond what science requires and will put a huge strain on our economy. 

There was also a lack of robust analysis of the implications for dairy farmers. This is a fundamental issue, given the significant role of the dairy industry in the NZ economy.

DairyNZ estimates a cut of up to 50% in methane dairy farmers’ total profit could reduce by between 33% and 42% across the 2030-50 period. 

That is a substantial loss of income and is more than 10 times higher than the cost of $2500 a farm estimated in the Government’s analysis. 

The impact for rural communities and the wider economy could be huge. 

DairyNZ is calling for the 2050 target to be reduced to up to 24% depending on circumstances and regularly reviewed while the science remains unsettled.  

We also want farmers to get recognition for their planting as a way of offsetting emissions. Farmers are putting a lot of effort into planting on their farms, which have water quality, biodiversity, biosecurity and greenhouse gas benefits. Policies must see farmers getting recognition for this as every bit helps.

This figure reflects a fair-share reduction in methane required to stay below the 1.5C threshold and is broadly in line with the analysis of the Intergovernmental Panel on Climate Change, New Zealand Agricultural Greenhouse Gas Research Centre, the Parliamentary Commissioner for the Environment and other climate scientists. 

We believe our position is an ambitious but fair approach that is informed by science and that is supported by Fonterra and its Shareholders’ Council, Miraka, Synlait and Tatua. Every ruminant must also carry an equal share of emissions reductions., ie beef cattle, sheep, deer and dairy cattle must all be required to make the same reductions.

DairyNZ will be there to support our farmers through the transition to a low-emissions future and has been engaging with the Government on farmers’ behalf. 

Last month the Government’s Interim Climate Change Committee recommended agriculture be brought into the Emissions Trading Scheme for five-years, until a farm-level pricing mechanism is constructed. 

We have opposed this recommendation. 

We are firm in our view that bringing agriculture into the ETS at the processor level is a blunt instrument that amounts to little more than a broad-based tax on farmers before we have the knowledge, support and tools to drive the practice change that will reduce emissions.

Instead, we have joined with 10 other farming groups such as Federated Farmers, DCANZ, FOMA and Beef + Lamb to launch an alternative to manage agricultural emissions: He waka eke noa – our future in our hands. This commitment is an unprecedented, sector-wide proposal to work constructively and collaboratively with the Government, Maori and iwi to make real and meaningful changes at the farm level to reduce emissions.

What’s really positive about this proposal is it doesn’t just identify a problem – it provides a clear path forward and a way for the primary sector to work with the Government, rather than just impose regulations. There is a real and tangible five-year work programme to build an enduring farm-level emission reduction framework and help farmers and the wider rural sector provide real options to reduce their footprint.  

The dairy sector already has a commitment in our Dairy Tomorrow strategy for all farms to have farm sustainability plans in place by 2025 and we are continuing to invest heavily in science, research and innovation to help our farmers make the best decisions for their circumstances. Working together will achieve more change than not.

Dairy in NZ has changed and innovated over the last 30 years and will continue to do so into the future. We can do this if the settings and support are right. We’re on the same journey as the rest of NZ and DairyNZ is there to support our farmers to maintain our world-leading sustainability and competitiveness status.

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