Friday, July 1, 2022

We need to get the settings right

Over the next few weeks, hundreds of farmers will be heading to roadshow meetings across the country to hear more about the two pricing options developed by the He Waka Eke Noa (HWEN) Primary Sector Climate Action Partnership.
MIA chief executive Sirma Karapeeva says the growth in halal-certified exports highlighted the critical importance of the halal sector and its small but important workforce in New Zealand.

MIA chief executive Sirma Karapeeva says the best way to achieve change is to empower farmers to manage their farms and livestock in a way which reduces emissions.

Over the next few weeks, hundreds of farmers will be heading to roadshow meetings across the country to hear more about the two pricing options developed by the He Waka Eke Noa (HWEN) Primary Sector Climate Action Partnership.

The meat processing and exporting sector is a fully committed partner in HWEN. We have helped develop the pricing options and we’ve been encouraging farmers to know their on-farm emissions number.

Make no mistake, there is a lot at stake for our sector. As food companies we generate $10 billion in export revenue every year and employ approximately 25,000 people, mainly in rural communities. We want a system that proves to New Zealanders and to our global customers that we are committed to producing environmentally-sustainable red meat.

We also shouldn’t lose sight of the fact that New Zealand is leading the world in addressing this issue. No other country in the world is considering such pricing mechanisms for agriculture. There isn’t a rulebook for this work and this decision will have generational impacts for our farmers and the country.

Meat processors share a common goal with groups such as Beef + Lamb NZ and DairyNZ. We want to keep agriculture out of the ETS and instead develop a fair pricing system, which incentivises real change by rewarding for emissions-efficient production (including sequestration) and supports the uptake of new technologies.

We believe this is the only way to ensure the NZ sheep and beef sector can continue to be a global leader in climate action, while remaining profitable and viable.

Clearly, NZ farmers are innovative and adaptable – the best way to achieve change is to empower farmers to manage their farms and livestock in a way which reduces emissions.

We believe bringing the red meat sector into the ETS would be a mistake because farmers would have no incentive to reduce their emissions and it would not result in the outcomes the Government or NZ is seeking.

The ETS is too much of a blunt instrument to capture the complexities of the impact of different gases from agriculture. Cementing a split-gas approach to the pricing of agricultural emissions is critical to ensure the sector can play its part in managing climate change while remaining vibrant and profitable.

The ETS also doesn’t recognise or reward lots of vegetation on farm land that is actually sequestering carbon. Many sheep and beef farmers are already sequestering carbon through trees on their land that is outside the ETS and making a valuable contribution to addressing climate change.

This recognition is important, as our pastoral-based farming system is unique to NZ and our red meat sector. If we get the settings right, this is a story backed by science that we can tell our customers around the world.

With the price of NZUs in the ETS increasing, we believe putting agriculture into the ETS would have a devastating impact on the red meat sector and ultimately rural communities across the country. More so, pricing through the ETS removes the opportunity for farmers to manage their own costs and risks. And we have heard time and time again that farmers want to be responsible for their own emissions. If we don’t get this right, and don’t agree on an alternative through HWEN, then agriculture will be brought into the ETS – the Government has made that clear.

Ultimately, we want a system that will recognise and reward emissions-efficient farmers (including for their sequestration) and support them to take up new technologies, because producing low-emissions products is the way of our future and is crucial for our future positioning with customers.

Doing nothing is not an option – the Government has demanded action and the public expects it.

The alternative options proposed by HWEN will better achieve the outcomes that New Zealanders, farmers and our customers all want.

For these reasons, we support a price for on-farm emissions paid at farm-level, with the money raised used to support the uptake of new technologies that reduce emissions and support better farm management.

Farmers now have a decision to make. We must come up with an agricultural-specific emissions pricing framework through HWEN to ensure agriculture stays out of the ETS and design an alternative farm-level pricing approach, which is not only practical and fair, but incentivises farmers to make positive changes to reduce their emissions.

We strongly encourage farmers to engage with this issue, to participate in the roadshows and to have their voices heard.

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