“We are pleased to have reached an agreement with the government that the best way to deal with agricultural emissions is at the farm level,” says Andrew Morrison, chairman of B+LNZ.
“This agreement represents a good outcome for farmers and acknowledges that the current Emissions Trading Scheme is unsuitable for agricultural emissions.
“By working with the government, we now have the best opportunity to develop a framework that is practical and simple for farmers, rewards positive change and supports the sector to reduce and offset farming’s emissions.”
The sector had been concerned at proposals to introduce a price on emissions at the processor level through the ETS from 2021, which would in effect have been a blunt tax on farmers, says John Loughlin, chairman of MIA.
“A farm-based approach will incentivise and reward farmers who are already doing the right thing. Pricing emissions at the processor level through the ETS would have done nothing to reduce on-farm emissions.
“The government has agreed to the alternative partnership approach that was put forward by 11 agricultural organisations including B+LNZ and MIA, called He Waka Eke Noa. While the approach agreed with the government will involve establishing a price on agricultural emissions by 2025, crucially this will not happen through the ETS and will happen at the farm gate.
”The establishment of a farm level emissions budget is pragmatic and sensible, says Mr Morrison.
“It will lead to farmers paying for emissions fairly, based on their own circumstances, and enable them to count their offsets such as from trees on their farms.
“We will also be able to help develop an approach that not only reflects methane is a short-lived gas, but also recognises sequestration.
“New Zealand is the first country to price agricultural emissions, and through this agreement, our sector has a shot at designing this system to ensure that it is fair for farmers.”
However, Beef + Lamb New Zealand and MIA are concerned the government is introducing legislation to have a back-stop in place ahead of a review of the progress on setting up the pricing system in 2022. If it is not happy with progress, the government will revert back to the processor inclusion in the ETS.
“We are disappointed with the approach as it is unusual to introduce legislation that may never be implemented,” says Mr Morrison.
“However, the onus is on us to work with the government constructively and effectively on what we all agree is the preferred approach.”
For more information, please contact B+LNZ’s General Manager for Communications and Engagement: Rowena Hume on 027 224 4535.