23 March 2022, NZ: When it comes to the challenge of climate change, we are all in this together: New Zealanders and the world, the primary sector and the wider economy, and rural and urban communities.
He Waka Eke Noa is a partnership between the Government, iwi/Māori and the primary sector. The partnership has been working together for the past two years to design an agricultural greenhouse gas emissions pricing and management system.
It is crunch time for the partnership. Feedback is being sought from farmers and growers on the two proposals that have been developed, Farm-Level Levy or Processor-Hybrid Levy, compared with the back-stop alternative of the Emissions Trading Scheme (ETS). The partnership wants feedback and will use this feedback to inform its recommendations on the proposed pricing design. The partnership’s recommendations are due in May. The Government has committed to introducing a price on agricultural emissions one way or another by 2025.
Consultation closes this week. There has been a great deal of constructive feedback from farmers and growers who have highlighted concerns and opportunities to make the system more effective and fairer.
February and March have been very challenging. Many growers have been stretched to the limit with harvest and labour challenges. Because growing fruit and vegetables generates much lower agricultural emissions than producing meat and milk, many growers are less vexed by the agricultural pricing options than farmers.
But we still must engage
Even if the potential impact on our sector is less, the agricultural pricing system will still affect the cost of growing by increasing fertiliser and compliance costs. Many growers are already finding rising production costs difficult to absorb and impossible to pass on.
I am a member of the He Waka Eke Noa steering group. I have worked alongside other partners with an open mind to design a system that will be credible in the eyes of international markets and New Zealanders. HortNZ supports the pastoral sector in designing an effective option for managing animal emissions. We also seek a workable option for horticulture that does not place a disproportionately high cost on the lowest emitting food producers.
Over the past couple of years, I have worked with growers who are already in the ETS due to emissions associated with heating glasshouses. The price of ETS units has been rising quickly and is close to driving many glasshouse growers out of business. Alternative lower emissions technologies are coming online. However, the cost of these alternatives is still high and hard to afford, given there is a limit on what people will pay for vegetables.
I am very aware of the limitations of the ETS. I see no sense in forcing the agricultural sector into a system where the chief method of reducing emissions is reducing food production.
I am acutely aware that the proposals in the He Waka Eke Noa consultation material provide very little opportunity for the money paid into the system by horticultural growers to be rebated back to growers. There is also uncertainty as to whether any of the money paid in by growers will fund research to benefit our sector. It would be perverse if the lowest emitting food producers ended up paying the highest emitting food producers through this system.