Tuesday, December 5, 2023

Green premiums make for more fruitful farming

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The electrification of a farm system is no bowl of cherries – but one Otago farmer has learnt lessons along the way that should help others in pursuit of low-carbon farming.
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When Mike Casey sold his tech business and bought a cherry orchard in Central Otago in 2020, it was not with the aim of running the world’s first fossil fuel-free orchard – but three years later he has not only achieved that, he has shifted his focus to something even bigger.   

Nothing within the Forest Lodge Orchard farm gate consumes fossil fuels, and any emissions outside his control  – such as from fertiliser – are offset by its 9300 cherry trees, Casey says. 

He’s done this by electrifying the entire orchard, with everything from the irrigation system to the brand-new 80 horsepower-equivalent electric tractor consuming renewable energy. 

“It wasn’t that we set out to completely eliminate fossil fuels, it was more how do we do things as best as we possibly can,” Casey says. 

“But over the course of two to three years we actually managed to make every last function on the farm electric.”

But through this journey of electrification of his farm, just north of Cromwell, Casey came up against a problem in New Zealand’s food system – that farmers aren’t properly rewarded for their environmental efforts. 

Farmers and growers are told that in order to maintain their current premiums, they need to satisfy global customers’ demands for environmentally sustainable products – but that premium often doesn’t make it to the farmer, Casey says. 

“The problem we have with our food systems at the moment is that everybody in the middle swallows all of that margin, and what the farmer gets back doesn’t reflect the sacrifices they’ve made on farm. 

“So what is happening are farmers are being told to over-capitalise on their operations, because something like electric technology is a lot more expensive, for something that might not have a payback period for eight to 10 years.” 

In his own case, having spent a lot of money on on-farm technology he looked to the market to recoup his costs – and came up short. Current certifications such as Carbon Zero didn’t sit well with him, due to the negative implications of some companies using the offsetting model to gain the certification while continuing with poor environmental practices. 

“There’s all sorts of problems that exist with the offsetting model, and the biggest one is, no matter how much offsetting we’re doing, the parts per million of carbon dioxide is still growing at an alarming rate. 

“And so my belief is that if we need to not just focus on offsetting, and not just think about slapping a badge on an existing business model and continuing the same type of behaviour, we need systemic change in how we produce our food.”

In the end he built a certification of his own, NZ Zero, through AsureQuality, which incentivises emissions reductions rather than offsetting.  

“What’s different about NZ Zero is that this is essentially a more powerful version of Carbon Zero because it’s completely eliminating all scope 1 emissions, and then offsetting what’s outside our control, such as products getting to market.” 

“That’s where I see the main catalyst for change coming from is the farmer being rewarded by the consumer.”  

Mike Casey, NZ Zero

Casey says prior to using the NZ Zero emissions reduction certification on his produce, the payback period on the electric technology was sitting at around eight years. 

Now it brings in a significant premium on his fruit, which he says brings his payback period down to about 18 months. 

“We fought really hard to work with an exporter as well as a retailer here in NZ. And we’ve now got somewhere around a 15% premium back to gate. 

“That’s where I see the main catalyst for change coming from is the farmer being rewarded by the consumer.”  

Casey accepts that his farming system is very different from land uses such as cropping or livestock farming, but his aim is to show farmers and growers what is possible and empower them to consider different options. 

“A lot of this is transferable, but not 100%. And so the big thing becomes, [for] any form of farming whether it be ground -based crops or pastoral farming which requires heavier machinery, some of that isn’t available right now. 

“But what I’m doing by starting with horticulture and viticulture, is while we wait, which won’t be long as 500 watt per kg batteries have just been announced, I want to empower farmers and growers to consider these options. 

“I want it [NZ Zero] to be something that enacts change. So what I’m really hoping for is some of the early adopters of our certification will be heavily rewarded by the consumers that are demanding sustainability.” 

Casey has an open door policy on his orchard, as well as opening up his books to help people understand the positive financial implications of electrifying an orchard. 

“So we’ve had thousands of farmers from all land use types come and have a look at the operation, and all of them have left happy with a smile on their face – because all I’m doing is changing the conversation between carbon and money.”

Casey plans to bring this open door policy to the E Tipu IFAMA 2023 Agribusiness Summit in June, when he hopes to empower farmers and growers across New Zealand with his story. 

“I’ve been doing a lot of presentations at a lot of conferences on what we are doing, but this is by far the biggest, so I’m just looking forward to getting out there and sharing my story. 

“And I find my story is just not controversial, and it’s not combative, and it’s something that it doesn’t really matter where someone sits when it comes to politics, or climate change or anything like that. 

“I’m just being like this is how much it cost us to electrify our irrigation, this is how much money we saved, this is how much carbon we saved, and all these kinds of things. So it’s not controversial in that regard, all I’m doing is telling the story of what we did.” 

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