This week’s reported comments by Fonterra chair John Wilson that dairy “volumes were only going to keep increasing” are troubling. Mr Wilson was supporting a potential renegotiation of the New Zealand-China Free Trade Agreement (FTA). Under the FTA dairy products such as whole milk powder attract higher tariffs when volume thresholds are reached, often early in the year.
When China’s request for an extradition treaty with New Zealand is discussed alongside a potential renegotiation of the FTA, there’s a perception that human rights risk being traded off against a better deal for dairy.
What’s troubling about John Wilson’s comments is that once again the Fonterra supertanker shows no sign of changing course away from its high pollution goal of growing milk volumes year on year. There’s no recognition of the need to focus on adding value and reduce the industry’s enormous environmental hoofprint.
Fonterra’s goal of growing milk volumes understates the huge climate and water pollution burden dairying imposes on Aotearoa New Zealand and the risk of this undemrining the 100% Pure brand which the company relies on to market its products.
Last December the national dairy herd was at 6.4 million, producing the equivalent effluent to 90 million people with only 10 % of it treated, while on-farm dairy emissions comprise 19% of New Zealand’s greenhouse gas emissions . Fonterra’s own research shows that producing a litre of liquid milk emits 940 g of CO2 equivalents.
National Government’s goal of doubling primary sector exports by 2025, its weak regulatory approach to land and water use, subsidies for irrigation and its failure to put a price on carbon have helped create perfect storm for dairying. They have encouraged a focus on maximising production and an intensive, high-input, high-cost dairy farming model. It involves high stocking levels, costly external inputs such as irrigation, and imported, environmentally-damaging feed like palm kernel expeller (PKE) to grow both grass and milk, and high levels of debt, including to service the capital costs of conversion and irrigators.
We need to shift from this high-input model to lower input, mixed land use, and more environmentally sound ways of farming, like organic milk production, that are more profitable.
And we need to diversify New Zealand’s economic base away from dairying and add more value to the food and fibre products we produce. We have a long way to go when nearly half the value of dairy exports come from milk powders and half the value of our wood exports is from raw logs, poles and chips.