Dairy NZ CEO Dr Tim Mackle - one of the key players in the development of the proposal and negotiations with the Government.

In what risks being seen as another u-turn, and with what amounts to a substantial reversal of Labour’s election campaign policy, the Government is set to launch a charm offensive on farmers today with a backdown over putting agriculture into the Emissions Trading Scheme.

The Prime Minister began hyping up today’s announcement at her post Cabinet press conference on Monday when she said she would be making a major announcement today with Climate Change Minister, James Shaw and Agriculture Minister, Damien O’Connor today.

She is scheduled to travel later today to the Hawke’s Bay Show where undoubtedly she must be hoping her announcement this morning will blunt some of the intense criticism that has been directed at the Government recently by the farming sector.

But unfortunately for her,  Deputy Prime Minister Winston Peters has stolen some of her thunder with a premature announcement that agriculture would not be going into the ETS until 2025 on “Q+A” on Monday night.

The proposal that agriculture goes into the ETS was only for a five-year transitional period from 2020 until the systems and technology had been developed which would allow each farm to account for emissions and pay under a levy and rebate scheme.

In fact the original proposal from the Interim Climate Change Commission apparently still holds; that farmers will be subject to a levy and rebate scheme on a farm by farm basis from 2025 to account for their methane emissions.

What has changed, is that in the interim five years, instead of going into the ETS, which the Interim Climate Change Commission proposed and which the farm sector vehemently oppose, they will now undertake to self-manage their emissions.

But there may be mandatory penalties for those who fail to do so, and that could include them being forced into the ETS where a levy would be placed on their production – meat or milk — at the processor level.

The Government is thought to be ready to agree to some (or possibly all)of a proposal put together by 11 agricultural organisations headed by Beef and LambNZ, DairyNZ and the Meat Industry Association.

Negotiations between the agriculture sector leaders and NZ First and the Greens have stopped and started over the past three months.


There have been tensions, particularly between NZ First and Federated Farmers, but it appears that the leaders may have convinced the Government to accept their proposal which they have called He Waka Eke Noa.

In an open letter to the Prime Minister a month ago, the group said it shared the Government’s ambition to limit global average temperature increases to within 1.5 degrees. 

“Farmers are among the first to bear the impact of climate change, with droughts and flooding now all too regular,” the letter said.

“That’s why DairyNZ, Beef + Lamb New Zealand, the Meat Industry Association and eight other primary sector organisations developed He Waka Eke Noa, the Primary Sector Climate Change Commitment as a collaborative proposal with Government and Maori to help us achieve a low-carbon future.

“We firmly believe that New Zealand can make the fastest progress towards managing our agricultural emissions by establishing a farm-based framework focused on practical change. Our farmers are committed to on-farm changes that will reduce emissions, but they need to be supported by good policies, technology, R&D, and transitional measures.”

At the heart of their proposal is a promise that by 2025, all farms will have a farm environment plan in place.

Targets for the uptake of the plans would be agreed with the Government.

By 2022, all farmers would know their farm emissions numbers.

By 2024, piloting of an emissions reporting and benchmarking system would be completed.

By 2025, a system for farm-level accounting and reporting of agricultural emissions would be in place at farm level.

That would then allow a levy to be imposed on methane emissions at a set level.

Peters suggested in his “Q+A” interview that the progress towards the targets would be monitored by the Independent Climate Change Commission which is to be chaired by Rodd Carr but whose members are yet to be appointed.

“Agriculture will have by 2022 to get ready to demonstrate their ability to handle this issue,” he said.

“Every encouragement will be made to make sure that it happens.

“There will be an independent climate change commission that will be examining the progress thus far. It will then report as to whether they’ve met the forward targets for performing at 100%, and only then will they make suggestions to improve farming’s performance.

“Farming, in 2025, will only then come into the emissions trading scheme.”

What he appears to be suggesting is that the levy and rebate scheme which was originally proposed by the Interim Climate Change Commission might somehow be integrated with the Emissions Trading Scheme.

However, even in Labour’s policy, they hinted at a separate scheme which would credit “good” farmers and penalise those who didn’t meet targets.

“We will also ensure that farmers operating at best practice are recognised and directly credited for the reductions they achieve,” the policy said.

Though the Government may receive applause from the farming sector for its proposals, it will be criticised by Greenpeace.

That will not help the Greens.

In his Bruce Jesson Memorial Lecture on Monday night, the former Greens co-Leader and now Executive Director of Greenpeace, Russel Norman, said that the  Government had done precious little to cut emissions from agribusiness.

“There are the clean water regulations and the removal of the irrigation subsidies which will help indirectly by constraining dairy intensification,” he said.

“But we have yet to see serious action from the Government to directly target agricultural emissions.

“And the previous Government was worse.

“Meanwhile under the Emissions Trading Scheme biogenic emissions from agriculture remain 100% subsidised by the taxpayer – a modest proposal to reduce this to 95% subsidy is currently marooned on Coalition Island where NZ First is trying to use its protection of the 100% subsidy

to build an electoral lifeboat.” 

But today’s announcement still leaves the Zero Carbon Bill and more importantly, the freshwater reforms as objects of farmer opposition.

Even so, today’s announcement will be seen as a positive by many farmers.