Fed Farmers takes cold comfort from ETS lobbying

Media Release
26 November 2009

Federated Farmers takes cold comfort from ETS lobbying

Federated Farmers has taken cold comfort that its behind the scenes lobbying may have saved each New Zealand farm some $27,000 from 2030. While the Federation wished to see the entire ETS scrapped, it also worked to reduce the worst impacts of it upon farming.

“Most thinking New Zealanders realise you cannot turn around millions of years of ruminant and plant evolution by fixed legislative dates. After all no emissions equals no exports and for that matter, no economy,” says Don Nicolson, President of Federated Farmers.

“Federated Farmers made no bones of the fact we didn’t like the ETS and didn’t want the ETS, but we had to defend farmers from the worst excesses any ETS would bring.

“Behind the scenes, the Federation worked to ensure, if it was to come in, it would be with least regret to farmers and the nation. That meant an ETS based on intensity, meaning increased production, is still possible along with the lowest possible phase-out rate for free allocation units.

“Intensity is important because farmers still have the ability to increase production within current limits. It has to be remembered that agriculture is already reducing emissions growth per unit of output.

“While we wanted agriculture out of the ETS all together, the allocation units will now phase out at a rate of 1.3 percent per annum from 2016, instead of 8 percent from 2019.

“According to the Prime Minister, ‘the cost of agricultural methane and nitrous oxide for the average farmer by 2030 will be in the order of $3,000 a year, compared with the $30,000 it would have been under Labour’. That kind of puts the annual cost of a Federated Farmers membership into perspective.

“Yet it all seems like being one number off winning Lotto – somewhat deflating.

“I must, grudgingly, give credit to the Government that it did listen to us and has seemingly acted to minimise the impact upon agriculture. That said, no one, truly, has any real idea over what the impacts will be.

“What frightens me is that these costs seem guesses built on hunches within a hypothesis.

“Will the real figure please stand up because in July, we were told the per person cost with Copenhagen would be $30 per person, per week. Yet, in recent weeks, it has magically reduced to $3 per person, per week. A few years ago, we had a half billion dollar Kyoto liability, which became zero earlier this year only to apparently blow out to $110 billion by 2050.

“It’s why we won’t stint on getting this thing pulled the moment it affects our profitability heading into 2016, when the free allocation units start phasing out. Right now, the 258,000 people who live on-farm are in the same boat as the rest of New Zealand. We’ll be paying more from 1 July next year,” Mr Nicolson concluded.

ENDS

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