Jeanette Fitzsimons

Farming and the ETS – the latest from the select committee

by Jeanette Fitzsimons

Monday we heard all the farming related submissions. You can see those submissions which have been released here. In a couple of weeks the transcript of our discussion will be available too.

Federated Farmers continued to be the most extreme – agriculture should be entirely left out of the ETS because food production is important. Actually, many industries and sectors – the steel industry, for example, have argued the same thing, so it’s not clear who would be left in if we agreed to exclude everything that is important. That aside, they do have a point that people have to eat and the world is facing a food shortage. Most other countries are not including their farming emissions at this stage. But in most countries farming is around 10-15% of their emissions. It’s not hard to say “we’ll ask a bit more of our energy and transport sectors to avoid the complexities of dealing with agriculture”.

However, in NZ methane and nitrous oxide from farming are the large half (51%) of our emissions. Leaving them out means taxpayers fork out a hefty subsidy to farming, or other energy users pay twice as much as they otherwise would. It is interesting that other farming submissions – eg Fonterra – did not ask for complete exemption but wanted emissions to be able to rise as production rises.

Much of the argument hinges on the claim that there is nothing farmers can do to get their animals to burp, fart and pee less, so if the world wants food, farmers should not be held responsible. This claim doesn’t sit well with the other demand of farmers, that the point of obligation – the point where emissions are measured and accountability lies – should be not the processor (eg Fonterra, which would hugely cut the compliance costs) but the individual farmer, so that efforts made on the farm to reduce emissions can be rewarded. If there is nothing farmers can do, why would they want that?

The current state of the science, as I read it, is that there are no technologies at present to reduce methane emissions, though changes in feed composition, gut bacteria and genetics all offer some hope for some years down the track. Quite a lot can be done though to reduce nitrous oxide emissions. For more discussion of these measures see the Sustainability Council report The Carbon Challenge.

Emissions will be much lower per hectare if the stocking rate is lower, and some farmers are finding it pays to run fewer stock and feed them better and greatly reduce input costs like supplementary feeds and vet fees (because the animals are healthier). Organic regimes may produce lower emissions because they store more carbon in their soils, but this has not been studied to the point where anyone can benefit from it.

Wet soil that is compacted will release its nitrogen faster so keeping animals off wet soils and avoiding pugging will help. Herd homes are a new idea to keep animals warm and dry and needing less feed in cold wet weather for the 20 or so hours a day after they have finished their ration of fresh grass. I was hugely impressed with the one I visited in the Waikato recently.

Applying less urea will reduce nitrous oxide too. This needn’t mean less production – I visited a farm recently where urea applications have been reduced to a seventh of what they were, with no loss of production, through careful nutrient budgeting.

Then there are nitrogen inhibitors – a great lark by the fertiliser companies who first sell the farmer some nitrogen fertiliser (eg urea) then sell another product to slow down the rate it turns into nitrous oxide (which also slows down the runoff into waterways and increases the uptake by the pasture, which is what you want). This seems to work well on some soils and not at all on others, but the monitoring in real life situations is not finished yet. There are also some questions about adding yet another chemical fix to the soil and its possible effects on soil microbiology.

The trouble is, none of these measures, except the lower stocking rate, are sufficiently measurable yet to be accepted by Kyoto as mitigation. So NZ’s emissions liability will not be reduced even if our farmers do reduce their actual emissions.

The need here is clearly to direct more research into verifying and measuring these effects, and to go in to bat at Kyoto for those measures to be recognised in assessing our emissions and therefore our obligations. Officials are advocating hard for nitrogen inhibitors to be counted – probably because they are products and you can count sales, and they increase GDP – but don’t seem to be doing anything to get recognition of sustainable practices which might reduce emissions at less cost.

Clearly there are things farmers could do to protect the climate, but at present they will not reduce their carbon obligations. The research the NZ Government does, or does not, fund; and the advocacy they do or don’t make at Kyoto will determine the options our farmers have. Getting proactive about these things and insisting Government support the recognition of sustainable practices at Kyoto might be a more productive place for the Feds to put their energy.

A final irony – for as long as farmers do not face a price on carbon, some or all of the benefits of this will be capitalised into the price of farm land. Farmers reap that benefit when they retire or sell. Higher land prices will increase the incentives for foresters to deforest and sell their land for dairying, thus increasing emissions more. It will also make it harder for foresters to acquire low quality farmland on marginal hill country to plant forests. And the problem I wrote of in my last blog, where intergenerational farming by iwi who will never sell but pass on to the next generation, and so never capture the capital gains, gets worse.

We need an all-inclusive price on carbon emissions.

Published in Environment & Resource Management by Jeanette Fitzsimons on Wed, May 6th, 2009   

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