The Government is headed for a showdown with farmers this week over its climate change targets.

The long-awaited report of the Interim Climate Change Committee (ICCC) is expected on Tuesday, and POLITIK understands it will propose that agriculture be brought into the Emissions Trading Scheme.

In its submission to the Select Committee considering the Zero Carbon Bill published on Friday, Federated Farmers includes a survey which shows that only 3.5% of farmers would support agriculture going into the ETS.

Only 10.8% of respondents agreed that the direction of climate change policy left them feeling optimistic about the future of farming.

However, the ICCC’s recommendation is only a proposal.

Climate Change Minister James Shaw has said it will be up to the yet-to-be-appointed Climate Change Commission to make the final decision on whether agriculture should go into the scheme.

POLITIK understands that the ICCC proposal says agriculture should remain within the scheme for only five years to build up a fund to provide the infrastructure for a system which would see a levy/rebate system which would be applied at the per-farm level.

Nevertheless, any suggestion that agriculture go into the ETS will attract widespread opposition from both farming and agriculture leadership groups and farmers themselves.

In their submission, Federated Farmers, report the results of s survey which attracted responses from 1277 of their members.

Nearly half of the respondents (42.3%) would support agriculture going into the ETS only if farmers had cost-effective mitigation technologies available to them, and International trading partners were also taking action to reduce their agricultural biogenic emissions.


NZ First secured a guarantee from the Government in the coalition agreement that 95% of all revenue collected if agriculture were included in the ETS would be recycled back into agriculture in order to encourage agricultural innovation, mitigation and additional planting of forestry.

The problem with this is that the farmer will still have to purchase ETS units, and the rebate will go to the industry as a whole. It will, in effect, be a tax on biogenic gases.

It is also abundantly clear from both the Federated Farmers and Dairy NZ submissions that the tough targets proposed by Climate Change Minister, James Shaw, for 2050, will be the focus of much of the agricultural industries’ submissions at the Select Committee.

“The economic, social and employment repercussions of the 2050 24-47% reduction target for methane are eye-watering for farmers and New Zealand with the current tools farmers have at their disposal.,” the submission says.

“Costs on sheep farmers could be as high as 123% of their profits

“Average dairy farmers’ profits cut by up to 60% and between 7% and 12% of dairy farmers are unable to meet their annual debt obligations by 2030 and 2040, respectively.

“Reductions in factory gate income from the dairy and red meat industries reaching as much as $14 billion per annum and climbing – this equates to the estimated total loss to New Zealand’s GDP (as at June 2012) of a Foot and Mouth outbreak similar to the one that struck Europe in 2001.”

The submission says that nine there remains a constant of about 22 grams of methane for every one kilogram of dry matter consumed by a cow, sheep, goat or deer.

The submissions argues that because there is currently no effective way of reducing that quantity of methane, If a scientific breakthrough is not made commercially available to New Zealand livestock farmers before the 2030, and 2050 methane emissions reduction targets are reached,  farmers will be forced to reduce the feed eaten by their stock, and therefore forced to reduce stock numbers.

“As a result of this direct relationship between methane and livestock production, a one per cent gross biogenic methane target would (at current export prices, which are relatively high) result in a minimum direct cost of $278 million to the New Zealand livestock sector.

“Likewise, an annual 0.8-1.6% biogenic methane reduction target will directly cost the New Zealand livestock sector $222 to $445 million annually.

The submission also reflects the growing support among farmers for the “50 Shades of Green” lobby group, which is critical of the one billion trees programme.

 “Many farmers are deeply worried about the economic, environmental and social impacts of forestry conversions on their rural communities.

“89.1% of respondents to our member survey said that they were concerned about this development.

“Farmers are generally very supportive of tree planting initiatives and would willingly plant more of the right trees if they could guarantee a reliable and decent income off the land that remains, plus know that their regions and local communities will continue to survive and thrive.

“However, farmers are concerned about the myriad of forestry-related matters, economic, social and environmental.”

The depressed mood among farmers was summed up: “The One Billion Trees programme and ETS are seen by farmers as clear signals the Government prefers forestry over farming.”

The Government had hoped they would be able to pass the Zero Carbon Bill with the support of National, but the Feds’ submission will be a powerful influence on National not to support the Bill unless the 2050 methane target can be reduced.

National’s deputy-leader, Paula Bennett told Newshub last week that despite National supporting the Bill through its first reading, she couldn’t guarantee National would support it through its second. 

This is shaping up to be one of the major debates of this Government’s term in the Beehive.