Thursday, 3 November 2011

A Farmer's View

Posted on behalf of Sally Lee. Sally farms sheep and beef in West Waikato, is an agricultural consultant, and a member of the AgDialogue group. You can follow what Sally is up to at

I accepted the offer of joining the AgDialogue group to broaden my own knowledge on agricultural emissions  and to have some say, if possible, on the future of the ETS on NZ farmers and NZers as a whole. The group is made up of people whom I am beginning to understand more, and who, outside of this group, I would probably never have gotten the opportunity to meet. I hope that this group will be able to inflict some positive change and stimulate understanding of rural concerns to non-rural politicians and others as we progress through this debate.

As a sheep and beef farmer and a consultant to the pastoral industry, my underlying feeling is that I am opposed to the Emission Trading Scheme (ETS) for NZ agriculture in any shape or form.

With the mass of information in the media about the Emissions Trading Scheme, it is extremely easy to get confused.  My belief it that as it stands now, the ETS is purely a tax on farmers collected at the processor level.  There is absolutely no incentive for farmers to change what they are doing on farm, apart to make the extra margin in their bottom line to pay the tax.  Farmers, as with other NZers, are already paying through the use of fuel and energy. Should we be paying again?

However, I am slowly coming to the realisation that the ETS will exist in some form, although maybe not as we currently know it.  So, what should farmers be doing?

As a hill country farmer, it has been suggested that the solution to our emissions is planting pine trees.  I have seen communities in the past lost forever through the planting of mass areas of pine trees and am a little cynical about the long term solution they offer. Also, as an individual farmer, you still require the upfront capital or a joint venture to turn tree planting into reality, this can be limiting especially after the difficult years we have had as drystock farmers. Also, if we take out large blocks of land, regardless of contour or slope, we will reduce our ‘protein’ production which is currently purchased by NZers and international markets. The result of this could be that, yes, NZ may have reduced its emissions, but this food production will be replaced by some other country (with the accompanying emissions), with no net world emissions decrease.

Instead, I believe that many of the answers to the ETS are about good farming practice and improving efficiency on farm.  The obvious way to reduce emissions is to reduce your stocking rate, however, if this is not managed well it can lead to reduced income, and as farmers we would be no better off. Efficiency can also come in the form of improved lambing and calving percentages, better growth rates, and improved pasture production and utilisation. This is known as Best Practice Management. However, this is not new science/technology and many farmers have still not adapted to this way of farming. Why not?  What do we have to do differently to incentivise change? I recently returned from the first national conference on biological farming systems where there were a number of questions raised as to what role a biological system might have in our emissions.

Also, if we are going to go down this ETS path, then what is the country and the world prepared to pay for our produce?  Farmers can’t keep farming with rising costs and red tape.  With the demise of farmers, there are a number of other consequences that NZ must consider. We might achieve our environmental and financial goals, but this might come at the expense of social sustainability. Other important issues include whether NZ can afford to look at ETS in isolation, or should it be incorporating other issues such as water quality and quantity, ecosystems, carbon footprinting, etc.?

Overall, I feel that NZ farmers should not be targeted. Agriculture contributes a large portion of NZ’s GDP and when agriculture does well, so does the country.  Therefore, I believe that NZ needs to pitch in and deal with the problem as a whole. We as NZ should take the bull by the horns and be a world leader – but we need the support of all, and can’t just target agriculture.


  1. Hi Sally, great post - thanks a lot.
    Just one comment - work done by Motu concluded that at an emissions charge of $25, with no free allocation of allowances the likelihood of significant levels of leakage (production decreases in New Zealand that are replaced by production and emissions increases overseas) are small. The current ETS proposes 90% free allocation of emissions allowances to farmers. The paper does conclude that at higher prices this could be more significant.
    See -
    Kerr, Suzi and Wei Zhang. 2009. "Allocation of New Zealand Units within Agriculture in the New Zealand Emissions Trading System," Motu Working Paper 09-16. Available at

  2. Good post Sally
    I also find the ETS extremely hard to understand. It is particularly not clear to me how, in its current form, a farmer would be rewarded for farming more efficiently and cleanly. It’s created enormous confusion among people, me included. But perhaps it hasn’t been explained properly, in simple words that we could understand. Maybe there is some merit in the concept of paying for emissions and using the money to pay others to capture CO2. In that way, the emitter can decide whether to cut emissions or paying others to capture the carbon he emits (just part of it anyway), whatever is most profitable for him. For example, if you are farming on prime dairy land, it could be more profitable to buy carbon credits from a hill country farmer to plant trees rather than trying to cut his emissions. But it would be his choice. Surely Suzy can clarify this lot better than this poor attempt.
    Jeffrey Sachs said “There is a good case for putting a price on carbon emissions but it is more straightforward to do it as a tax rather than a system of tradable permits. It would be easier to tax carbon at source – coal, oil, and gas companies. Tradable permits or carbon taxes will not help develop low-emission technologies. We need to combine carbon pricing with initiatives to promote sustainable energy and farming technologies.”
    Sally said “Farmers, as with other NZers, are already paying through the use of fuel and energy. Should we be paying again?” I don’t think you’d be paying twice, in one case you are paying for the CO2 emissions from burning fossil fuels to run your car and machinery and to generate the energy that you use, in the other, as a farmer you are paying for the methane emitted by your livestock.
    I agree that planting trees cannot be the whole solution, but it can play a part. Perhaps a small proportion of the least productive part (5-10%) of the farm could help to offset emissions and release degrees of freedom to make only small changes on the rest (more productive) part of the farm. Trees on delicate areas can also be beneficial to reduce soil erosion, provide shade for livestock and in some cases even fodder.
    I like what Sally said about efficiency, although it is entirely possible to reduce emissions per unit of product while at the same time increasing total farm emission. This would happen if efficiency gains are translated into more production (“Partial decoupling” I think it’s called), because more efficient processes are more profitable. This needs to be thought through. Basically, to reduce total emissions via efficiency you need to produce the same, but reducing the total amount of feed eaten. Feed eaten is the main driver of methane emissions.
    One last thing, Sally is absolutely right in rising the point of “social sustainability”. Farming is not only a great contributor to GDP, but it also the play paramount role in the social fabric and the cultural identity of provincial New Zealand.

    Thanks for listening
    A person that want’s to help

  3. In work we (GSL) completed for MAF Policy in 2008
    it was pointed out that if a product ETS tax were imposed, there were few management mitigation strategies that could be employed as more efficiency may lead to less GHG/kg of product, BUT the tax is on product sold, NOT on how efficiently it is produced.
    You may wish to read a paper that touches on this,


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