Prime Minister John Key warned farmers yesterday that they rejected a response to climate change at their peril – endangering their reputations, future incomes and the economy at the hands of powerful global consumers. He gave a hard-hitting speech yesterday in Wellington to the Federated Farmers’ National Council reports The NZ Herald. “Our international reputation with our overseas consumers is at stake,” he said. While the Government had some sway over access to overseas markets, it could not force consumers to buy NZ products if they did not think they measured up to their environmental standards.

“But we can help protect against that possibility. That’s what we believe our emissions trading scheme does and I hope you will see it in that light.” Mr Key cited the recent ban by British supermarket Waitrose on fish that it deemed had been over-fished or harvested by irresponsible means. It had banned New Zealand hoki.The supermarket had not suffered and the move was considered a commercial success.

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NZ will not be following Australia’s example and excluding agriculture from its emissions trading scheme (ETS), Climate Change Minister Nick Smith says. The Government remains committed to an all-sectors, all-gases scheme even though agriculture’s entry would be pushed back from 2013 to 2015 under its proposed changes to the ETS reports The Herald.

In a major concession to the Opposition, the Rudd Government said it would exclude agriculture from its ETS legislation. Agricultural emissions from ruminants represent about half of NZ’s emissions but only 13 per cent of Australia’s, says the Australian Climate Change office. And while NZ’s agricultural emissions have risen 12 per cent since 1990, Australia’s have fallen by 6 per cent.  “That’s mainly due to drought, and excluding agriculture was a luxury they might be able to afford but we cannot,” Smith said.

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Rural land values will likely fall once an emissions trading scheme (ETS) is in place, warns a leading climate change policy commentator. PricewaterhouseCoopers (PWC) climate change team partner Chris Taylor told Rural News some land values will increase, while others will fall. Excluding forestry, he says any fall in land value will be tied to a drop in yield. ‘But it’s more than likely that an ETS will reduce returns because yields will be lower and this reduction will flow through to land value.

‘The purpose of a price-based measure, such as an ETS, is to create a financial incentive for emission reductions by allowing the market to impose a cost. In New Zealand, this will impact on all sectors.’ Taylor says as a result, all households and businesses will face the flow-on costs of carbon to the economy, regardless of whether they are participants in the scheme.

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Federated Farmers says the Government’s decision to bring agriculture into its proposed emissions trading scheme (ETS) by 2015 is “highly disappointing”. And it now wants the Government to argue in Copenhagen next December – when details of the global new deal on post-Kyoto emissions are negotiated – for agriculture to not be included in carbon schemes reports The ODT.

“The Government must seek to remove agriculture at Copenhagen in December,” said Federated Farmers president Don Nicolson, of Waimatua. “While we support efficient and sustainable resource use, we have big concerns over the impact of an ETS.” The Government is relying on carbon-trading through its proposed ETS to help it meet a target of a 10 to 20 percent cut in carbon emissions on 1990 levels by 2020.

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When Richard Gorringe knew he would be talking to Business Day, he rang around his mates – a dozen farmers like him in their 40s or younger. What were the big issues and what were their views on them, he wanted to know. The answer: three – the parlous state of the meat industry, the parlous state of the wool industry and the way farmers were being forced to be environmental world leaders. To these he added a fourth – land access, a sore point with him because his farm backs on to the Ruahine Forest Park at the head of the Kawhatau Valley near Mangaweka.

Mr Gorringe is quietly spoken and outwardly calm and it is only a change in his speech – the words suddenly being delivered quick-fire – that indicate the frustrations shared by his hill-country farming friends. “Everyone tells us the world is short of protein. They say that means our future is safe. I can’t say I’m filled with confidence that they are right.”

A niggling dissatisfaction with the meat and wool industries has turned to anger as two years of low lamb prices and a debilitating drought have highlighted shortcomings. “You can accept such seasonal ups and downs if you feel the system is basically sound, but it’s not.” This is what he and his friends think:

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It was a big year for farming – on again-off again meat industry restructuring, start-stop capital restructure at Fonterra, drought, tumbling commodity prices, the Emissions Trading Scheme, Resource Management Act concerns and National back in power. The list goes on and on reports The NZ Herald .

A surprising number of issues that could have reshaped the topography of farming came to nothing but they have not gone away either and 2009 is looking like another big year for agriculture.

In November last year Fonterra set off with fanfare on the path to capital restructure with the aim of ensuring funds for growth and protecting against redemption risk. When capital restructure does re-surface it will likely be with less fanfare and more certainty. Fonterra’s year was overshadowed by the tragedy in China . It is a disaster that will cast a long shadow. The huge drop in the predicted payout could also cast a cloud over the NZ economy!!

Meat industry restructuring will likely be back on the agenda next year, despite some price improvements, although possibly more from economic attrition than grand vision. (although MIAG rumours they will put up another SFF director candidate shows that farmers are not finished yet. Editor)

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Ag Minister David Carter is ranked tenth in the Cabinet, but he expects to have more influence than his predecessor, who was third. “We’ve got a caucus and a cabinet that have a close association with agriculture,” he says. “A quarter of the caucus are actively or have been actively involved with farming or represent strong rural electorates. I don’t think there’s an issue where there will not be a discussion about how it will affect rural communities,”writes Business day

Mr Anderton promised farmers an emissions trading scheme would not apply to them if a scientific solution to their stock methane problem could not be found. “But that’s not the law he voted for,” Mr Carter says. “He voted for a law that absolutely sets in concrete financial implications for agriculture.” 

Carter says he can “absolutely” give the same assurance Mr Anderton gave. Even though the issue of how the country responds to its Kyoto Protocol commitments is to be reviewed by a select committee, he says farming’s security is a bottom line that will not be changed.

Farmers should find favour with most of National’s promises in its recently released agricultural policy and the party is also confident its push for an emissions trading scheme (ETS) won’t bleed rural support. Agriculture spokesman David Carter and leader John Key were in Hastings late last week to outline the party’s pledges to the rural electorate. (more…)