This month’s announcements by Government to further consult on their changes to He Waka Eke Noa’s recommendations has stirred the farming community, some economists and those watching significant land use changes over the last 5 to 8 years.
The Government’s proposal is less favourable to agriculture than the proposal initially put forward by He Waka Eke Noa as it provides less certainty for emissions price levels, it does not allow for the industry to be directly involved with the process to recommend emissions pricing to Government, and rewards less on-farm sequestration of carbon.
If enacted, it is clear these policies will favour forestry and will promote further land change use especially where sheep and beef farming currently occur.
If emissions are priced at the processor level as stated by the Government, MPI is modelling there is expected to be a 20% decrease in land used for sheep and beef farming, and up to a 5.7% decrease in land used for dairying.
Putting all of this in terms of revenue, modelling signals there will be significant changes under the farm-level levy: dairy revenue decreases between 4% and 5%, and for sheep and beef, the decrease is between 18% and 24%.
It is for these reasons, economists and commentators are stating food prices will increase and significant changes will occur in rural towns and districts, especially those that service the sheep and beef sector.
The ideology of this in a world that requires more food makes no sense.
While we are a country that rightly boasts the lowest carbon footprint in the production of livestock derived food, NZ agriculture is not one that sits on its laurels.
Our hope is that the outcomes of the consultation process recognise the need for emissions control in a way that doesn’t decimate our ability to produce food or cause irreversible changes to NZ rural communities.
When this pathway is defined, we remain ready to assist farmers to further improve their production and profitability.
From a world perspective the elephant in the room is the insatiable requirement for energy.
Click HERE for our article on He Waka Eke Noa.
Visit OurWorldinData.org/ghg-emissions-by-sector for information about the pie chart below.