He Waka Eke Noa, agriculture’s proposal to manage its own Greenhouse Gas Emissions, which was unveiled yesterday, is a political tangle.
On one side, the Greens have left Climate Change Minister and their co-leader, James Shaw, in an almost impossible situation.
Their agriculture spokesperson, Teanau Tuiono, said the proposal launched yesterday fell short and left more questions than answers.
But the party’s co-leader and Climate Change Minister, James Shaw, welcomed the proposal in a joint statement with Agriculture Minister Damien O’Connor.
On the right, the situation is even more complex.
National Leader Christopher Luxon and the party’s agriculture spokesperson, Barbara Kuriger, have said they support it and agriculture leaders who have talked to them believe that support is staunch.
Only one or two members of National’s caucus are believed to oppose He Waka Eke Noa.
ACT does oppose the proposal, but it is a nuanced opposition, calling for mitigation technology to be put in place before farmers have to pay a levy.
But the grassroots farmer protest organisation, Groundswell, totally opposes the idea of levies and, therefore, the proposal.
Groundswell has close links to the Taxpayers’ Union, which is currently turning out hundreds in South Island small towns to meetings to oppose the Government’s Three Waters proposals.
There are fears it will soon do the same over Waka Eke Noa.
All this has left National’s old ally and the traditional voice of farming, Federated Farmers, in an awkward quandary.
The Feds’ President, Andrew Hoggard, did not join the main platform at the launch of He Waka Eke Noa in Wellington yesterday.
Instead, he sat in the audience.
But he was drawn to the podium to answer a media question (from POLITIK) about whether the Feds fully supported the proposal.
“We’ve signed up to it,” he said.
“There’s stuff in there we’re pretty happy with.
“There’s stuff in there that we will have to swallow a few rats on a couple of things.
“But I think every partner had to swallow some rates on everything. So we’re still there.
“I don’t think it’s quite perfect just yet. I think the bones are there. There’s more work that’s needed. There’s more detail to be worked out. But the bones are there,” he said.
Like all speakers yesterday, Hoggard said the proposal was better than the Emissions Trading Scheme.
“Obviously, we would love that there wasn’t a price at all, but here we are.
“There was the option of ETS or come up with something better.
“So we’ve been part of the journey to come up with something better.”
The proposal unveiled yesterday would require farmers each year to use a centralised calculation system to determine the weight of methane and nitrous oxide the stock on their farms were emitting.
The average dairy cattle beast produces approximately 98 kg of methane per year, and the average sheep approximately 13 kg per year.
Farmers would pay a levy — proposed as a maximum of 11c a kg till 2028 — based on their total annual emissions weight.
But they could reduce that payment by taking actions such as planting trees to sequester carbon or, as they come into play, using various Greenhouse Gas mitigation technologies such as vaccines or specialised supplemental feed.
Modelling produced by the He Waka Eke Noa partnership estimated this would see beef and lamb farmers hit hardest. A South Island hill country sheepfarmer could end up paying $4183 a year.
An average Canterbury dairy farmer would pay $3817, whereas a Taranaki dairy farmer with a smaller farm would pay only $1089.
Straight after the launch yesterday morning, Hoggard sent a detailed note to Federated Farmers members detailing what he called the “good, the bad and the ugly” in the proposal.
The “ugly” centred on what price farmers might end up paying and the fact that so far, there is no actual price beyond the suggestions used in the modelling.
But importantly, the Feds are not opposed to the overall thrust of the He Waka Eke Noa process and the proposition that they should pay for methane and nitrous oxide emissions.
On the other hand, Groundswell questions most of the scientific assumptions behind the argument that farmers should pay for their emissions and believes that instead of farmers footing the bill, any payment should come from the compulsory levy organisations, Beef and Lamb NZ and Dairy NZ.
But throughout the farmer consultation process, which saw 55 farmer meetings earlier in the year, the 13 agriculture sector groups that make up the He Waka Eke Noa partnership have stressed that if farmers did not accept their proposal, then the Government would simply put agriculture into the Emissions Trading Scheme.
The CEO of the Meat Industry Association, Sirma Karapeeva, was forthright in her opposition to the ETS.
“The ETS would act as a blunt tax on production without the incentives, and the support farmers need to reduce their emissions,” she said.
“And it would certainly not result in the outcomes the Government or New Zealand is seeking from the primary industries.
“Given the likely ETS prices in the future, putting agriculture into the ETS would have a devastating impact not only in the red meat sector but also on primary industries and all communities at large.”
Beef and Lamb NZ Director, Nicky Hyslop, said farmers saw firsthand the effects of climate change, including droughts and extreme weather events.
“So we know just what is at stake,” she said.
“This is an opportunity for Government to work with our sector, to put in place and to continue to develop an effective system that has the support of the agricultural community and will ultimately incentivise farmers to reduce our emissions.
“It is also an opportunity for New Zealand, both farmers and our industry, to continue to be leaders internationally and, in doing so, keep beautiful. New Zealand farm produce as one of the most preferred choices that our customers face.”
The proposal is also notable for having Maori having what Federation of Maori Authorities (FOMA)chair Traci Houpapa said was a “seat at the table.”
“FOMA exists to grow the wealth and prosperity of our members and of all Maori for Aotearoa,” she said.
“We advocate strongly values over volume approach, and we base this upon a Te Ao Maori view and a kaupapa Maori approach.
“Maori have always operated within this values-based system where we seek to live and work in harmony with our land and environment like our colleagues.”
However, Federated Farmers were concerned about a Maori chapter in the report which Hoggard aid no other member of He Waka Eke Noa was allowed input into.
The section the Feds objected to included a reference to putting a price on water.
“We must be profitable to enable us to provide for current and future generations,” the chapter said.
“However, profitability must include the costs of environmental externalities and especially those externalities that are depleting.
“Until these inputs, such as water, are costed, the behaviours to limit the depletion of these resources and therefore preserve the taiao (environment) are unlikely.
“Reducing greenhouse gas emissions is a small step toward more sustainable land-management practices.”
Hoggard, in his note to members, was concerned . that the document was likely to be read by foreign competitors and that “degrading remarks about our current farming practices is an absolute own goal for us as a country.”
“Without the support of others, we were unable to remove these references,” he said.
His comments reflected the tensions within the farming community over He Waka Eke Noa.
But the biggest issue will be Groundswell’s opposition, stoked along by the Taxpayers’ Union, and it can be expected to focus on Dairy NZ, in particular, its chair Jim van der Poel.
“There are 11,000 dairy farmers, and they’re going to have 11,000 views,” he told POLITIK.
“But I think what we’ve got overwhelmingly from the consultation was that people saw the ETS as being the worst option.
“Like Andrew Hoggard said, if there was an option to do no pricing, of course, farmers would be attracted to that.
“That’s to be expected, but by far and away, farmers support this as an alternative to going into the ETS.
Van der Poel said if DairyNZ had picked up Groundswell’s proposal, then the Government would have put agriculture into the ETS.
“At the end of the day, we had to do what was right for all farmers.”
The Government will make a decision on whether to go ahead with He Waka Eke Noa by the end of the year.
They will be advised by the end of this month by the Climate Change Commission, whose chair, Rod Carr, yesterday suggested farmers might need some financial assistance to transition to a lower emissions economy.
“Our advice is that financial assistance can be used to encourage investments in low emissions practices and deliver the emissions reductions needed to meet our targets while limiting disruptive changes for farmers,” he said yesterday.
“The Government should be aiming to minimise negative knock-on impacts for Aotearoa New Zealand – such as a decline in employment and less money going into local economies, through to reduced exports to international markets.
“We advise that giving financial assistance to farmers based on their output would send a signal to invest in low emissions processes and products, but also to maintain or improve productivity. “
Carr has defined the balance the Government must now achieve; how to reduce farm emissions without reducing output and all the while keeping a majority of farmers on side.