Putting a price on agricultural emissions could come at the cost of 54,600 jobs, a BusinessNZ report says.
It identifies Southland, Waimate, Wairoa and South Taranaki as especially hard hit from reduced farmer spending on fertiliser, veterinary and agricultural support services and downstream meat and dairy processing industries.
The He Waka Eke Noa (HWEN) proposal puts a price on emissions pricing that could cut dairy farm incomes by 6-7% and sheep and beef farm incomes by 18-24%.
Federated Farmers vice-president Wayne Langford said this underlines why the government needs to think very carefully about the timing, structure and impact of any move to price agricultural emissions.
“The cost of living and looming economic downturn are front of mind for most New Zealanders at the moment, and that includes farmers, who are really struggling with huge cost increases.
“There’s a lot of pressure on people with increased costs, declining incomes, staffing shortages and the ongoing impacts of Cyclone Gabrielle,” Langford said.
Primary sector leaders are of the opinion that HWEN legislation will not be passed before October’s election due to the complexity of the process.
The BusinessNZ study assesses the impact of those emission charges on both upstream industries that are “critically dependent” on farming and downstream meat and dairy processing industries.
It estimates 54,607 jobs in the key upstream and downstream industries nationally would be vulnerable.
In addition, on-farm employment in sheep, beef and dairy farming would be at stake, which together employ a further 44,500 people.
There would be flow-on effects to other parts of local economies as incomes and spending power are lost, with some communities possibly devastated and likely to become unviable through employment and population loss.
“Before we even look at putting a price on agricultural emissions there needs to be a review of the current methane reduction targets to take into account the warming impact of methane,” Langford said.
“Our current targets aren’t grounded in science and go further and faster than is required. That’s what adds all the cost and puts our rural communities at risk.
“We need to make sure we get the settings right to protect the viability of our rural communities and our economy. If we don’t, we will just end up exporting jobs and emissions instead of meat and milk, and the planet will be no better off for it.”