ETS charges will slash NZ farmers’ profitability

New Zealand farmers, already reeling from a drop in profitability, will be among the hardest hit when the emissions trading scheme (ETS) laws come into force on 1 July. “Rural households are dependent on motor fuels and electricity, just as townsfolk are, but, because our farming businesses use more than the average, we will be even more heavily penalised by increases in fuel and power charges,” said Dr Doug Edmeades, rural affairs spokesman for the New Zealand Climate Science Coalition.

“Then in 2015, they face the prospect of being penalised even more heavily because they farm ruminant animals.“The sad irony is that this comes at a time of reduced profitability from 16.4% to 6.2% measured at the farm gate, but increased production efficiencies in a world crying out for more food at more affordable prices. Statistics available from Federated Farmers show that New Zealand farmers are being given no credit for efficiency gains since the removal of subsidies in the late 1980s, improvements like:
• Sheep meat volume produced is slightly higher in total from about 50% less sheep.
• Beef meat volume up about 20%, from about 11% fewer cattle.
• Dairy milk volume per cow about 30% up, from herd numbers that have increased 75% to 4.6 million.

“Our farmers accepted the challenges of the 1980s restructuring. As an industry they committed to ‘P’ words: production, productivity and profit.

What’s their reward? From 2015, they will become the only farmers in the world to be penalised for the natural emissions of ruminant animals. Why this should be so under a governing political party that claims to represent their rural interests is something that none of them can understand, and many of them actually resent. Especially when the only justification is claimed to be protection of access to overseas markets, none of which have included agriculture in their own stalled emissions policies.”Dr Edmeades said farmers are watching with interest the inaugural meeting of the New Zealand-inspired Global Research Alliance in Wellington this week, when 80 senior science and policy representatives from 27 countries will gather to address the possibilities of reducing agricultural emissions

“The fact that 27 countries have agreed that there is something worth discussing is a tacit agreement that there are areas of emissions science that remain unsettled. We would have thought that a pragmatic government would suspend implementation of emissions legislation until the science is fully settled.

“However, farmers will be disappointed that, in his opening speech to the conference, Prime Minister John Key made no mention of New Zealand agriculture’s outstanding productivity gains without government subsidy or other privileges, or of the fact that farm profitability has reduced to the point that our farmers are close to being recipients of the dole.

“As for the conference, it is to be hoped that participants will be reminded that their efforts are based on nothing more than a hypothesis that emissions of so-called greenhouse gases cause dangerous global warming; a hypothesis that has yet to meet well established standards of traditional scientific proof in spite of the expenditure by governments of many billions of research dollars. Until that proof is established, the Global Research Alliance is just another feel-good but costly academic exercise,” said Dr Edmeades.

ENDS

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