DairyNZ chair Jim van der Poel is distancing the farming sector’s emissions proposal from the government’s, saying the two are fundamentally different.
There are similarities at first glance, but once the organisation started reading through the fine print, it found that the proposal contained big differences to the one outlined by He Eke Waka Noa (HWEN).
“As we have looked into it, and as we have looked at the details of the whole proposal, it’s become more obvious how different it really is. It is fundamentally different and is not our proposal at all,” Van der Poel said.
This is despite the government acknowledging how much of HWEN’s proposal it has adopted. At the launch of the government proposal, Prime Minister Jacinda Ardern said the government had largely included HWEN’s proposal to price emissions at the farm level and had built on that.
“It’s a system the sector has come up with, which has largely been backed by the Climate Change Commission and the government,” Ardern said.
Similarly, Climate Change Minister James Shaw said the pricing proposal was essentially that put forward by the HWEN partnership earlier this year with “important improvements”.
Van der Poel said the price-setting mechanism is different in that emissions targets take priority over the potential consequences for rural communities.
“It’s why the governance structure, how that price is set and how that money is allocated and utilised, is so important to this sector,” Van der Poel said.
The other big differences are the proposals around sequestration and the ability of farmers to work together in a group to reduce their emissions.
“Together they make quite a fundamental difference to the proposal when you compare the two,” he said.
“The changes have impacted the balance and equity of achieving emission reductions and pricing, which the whole primary sector worked hard to create.
“The sector needs industry-led solutions we can all support. We stand behind the He Waka Eke Noa recommendations – the government received a credible option that would support emission reductions, while enabling farmers to maintain profitability.”
How the emissions data is captured is also important. Many farmers are collecting that data already through their annual accounts and wherever possible those existing avenues will be used.
That levy – whatever it is calculated at – will be treated as an annual tax the farmer pays.
DairyNZ is still working through modelling what the levy could look like under different farming scenarios. That data will be made publicly available when it is complete.
Farm consultancy AgFirst, using HWEN’s indicative pricing of methane plus nitrous oxide/carbon dioxide minus the benefits from innovations and sequestration (A+B-I-C) calculated that levy at about $5817 in 2025 and $18,580 in 2030.
This modelling is based on a 133ha, 368-cow farm in Waikato-Bay of Plenty and was released in July.
AgFirst economist Phil Journeaux said those costs are largely unchanged.
Van der Poel said some of the government’s assumptions around the proposal’s impact on the dairy sector and the mitigations available are not accurate.
“The assumptions they have made are not correct and the impact will be more than they have assumed,” Van der Poel said.
He said the amount of methane the industry is producing has decreased slightly when taken from a 2017 base year. If farmers had farmed with the same efficiencies as they did in 1990, the total methane output would be 30% higher.
“We have improved by 30% because of our productivity and the things that farmers have already done.”
The initial feedback on the government proposal from HWEN partners collectively and individually outlined how it is different to what was proposed, and they are committed to working together to make changes to what the government has proposed, he said.
“We’ve been quite clear that what the government has come out with is their proposal, not ours, and that’s become quite obvious.”
He said they were going into the consultation in good faith that the government is prepared to listen and is open to making changes once the implications of what has been proposed are realised.
Government consultation is now open and DairyNZ, along with other sector partners, are holding farmer consultation meetings both online and in person at venues throughout the country. That consultation runs until November 18.
