National made its pitch to its own heartland yesterday with its farming policy which should get a good reception even though it fails to address the most significant issue facing farmers.
But agriculture policy overall is important for National, which is bleeding rural support to ACT and faces a rural rump rebellion from the populist Groundswell movement.
The policy announced yesterday was clearly intended to win support from the rural pressure groups like Groundswell and 50 Shades of Green, who have been making life difficult for National in its rural heartland.
Groundswell’s influence is evident in a much more permissive policy on winter grazing, which was the issue that got them started as an organisation.
Animal welfare groups won’t like that, nor will they be happy with the proposal to restart live cattle exports.
But in the background, perhaps reflecting a difficulty within the Caucus in coming to an agreement, there was no policy on farm methane and nitrous oxide emissions as proposed in the He Waka Eke Noa plan.
Agriculture spokesperson Todd McClay told POLITIK last night that he expected that to be sorted out soon, possibly within three or four weeks, but he wasn’t willing to put a specific date on any announcement nor to speculate on what National’s ultimate policy might be.
Potentially just as controversial is a proposal to ban overseas investors from acquiring farms to convert to forest to claim ETS credits.
ACT’s agriculture spokesperson, Mark Cameron, was critical of this.
“Forestry subsidies, poor environmental regulation of forestry, a lack of credits for on-farm sequestration, and a lack of access to foreign credits pushing the carbon price higher than overseas have all contributed to the current situation,” he said.
“We need to address those underlying issues, not just restrict the activity to people who live in New Zealand or a country where free trade agreements will allow them to invest anyway.”
And the Chief Economist from the free-market New Zealand Initiative, Eric Crampton, tweeted: “If there are problems caused by pastoral conversions into forestry, it should be regulated as a local land use issue. Are foreigners’ trees somehow dirtier?”
The boom in overseas farmland purchases for forest conversion began soon after the Labour-New Zealand First coalition gained power in October 2017.
Then-Forestry Minister Shane Jones, with Associate Finance Minister, David Parker, relaxed the restriction on overseas investors buying farms but initially proposed that they be required to enter into agreements with downstream processors for their trees.
National’s Agriculture spokesperson, Todd McClay, made much the same point to POLITIK last night; that overseas investors would still be able to purchase production forests where the wood was processed locally.
But Jones’ original proposal was sabotaged by the rapid rise of the Emissions Trading Scheme unit price, which went from about $25 a unit in 2018 to a peak of around $85 last year.
Currently, a hectare of pine trees can earn $2000 per year. Beef and LambNZ has forecast that a sheep and beef farm on hard North Island hill country will make a profit this year of around $230 per hectare.
But there are some doubts about just how widespread the conversion of farmland to forestry is.
A Treasury Regulatory Impact Statement last May on changes to the Overseas Investment Regulations said that 212,000 hectares of farmland to be converted to forestry had been consented under the 2018 regulations.
National’s policy, however, synchronises with the 50 Shades of Green campaign which is currently running a cinema ad “Save Farms For Food” and one of whose leaders, Mike Butterick, is the party’s Wairarapa candidate.
Their Facebook page last night welcomed the National policy.
The policy announced yesterday clearly had rural pressure groups like 50Shades in mind, and the party’s emphasis on winding back regulations like those applying to winter grazing won the approval of the populist Groundswell movement, which had its origins opposing those regulations.
Their Facebook page last night had a large blue panel on it with a red “Victory” button at the top.
The text said: “Get Wellington out of farming; We spoke up, and now National are adopting many of our proposals to stand up against unworkable regulations.”
National currently has the luxury of being in Opposition and is able to satisfy pressure groups like 50Shades and Groundswell; in Government, it might not find it so easy to make the concessions it was talking about yesterday.
Agriculture Minister Damien O’Connor pointed out that many of the farm-forest conversions were by New Zealand farmers.
Minister of Agriculture Damien O’Connor said changes made under Labour were needed to meet modern-day environmental protections and market expectations – which National’s plan would jeopardise.
“Their plan won’t make any difference,” he told RadioNZ.
And he was critical of the party’s war on regulation.
“They’re representing the views of some farmers… When we came into Government, we had to look at water quality; we had to look at our ambitions around reduction; we had to look at issues like animal welfare and some of the images that were coming out from winter grazing,” he said.
“The reason it got like that is because National refused to take the leadership position in those areas that had been identified for many years.
“We’re trying to provide some clarity for farmers where we’ve made some mistakes in terms of the proposals we’ve made, the changes, working with farmers all the way through – all of the challenges that we need to actually face up to.”
O’Connor said New Zealand had “to be mindful of the changing values and expectations of our community, of our consumers”, calling National’s proposals a “backward step”.
But the acid test for National will come over He Waka Eke Noa, which Groundswell wants entirely scrapped and which ACT also opposes.
The policy is supported in principle by key farming leaders like Jim van der Poel from DairyNZ and Miles Hurrell, the CEO of Fonterra, and so far has had the support of Todd Muller, the party’s retiring former agriculture and climate change spokesperson.
If National agrees to support or even partly support the Government’s final decisions on He Waka Eke Noa, then all today’s efforts to assuage the rural pressure groups will be meaningless, and it will not have stemmed the flow of farmer support to ACT.
But the experience of the Liberal party in Australia shows what happens when modern-day centre-right parties ignore the large urban vote that wants action on climate change.
Yesterday was the easy bit for National.