EU trade scare tactics and the AgriZero rort

I'm writing to update you on why the scare tactics about the EU FTA complaint won't work, how Farmlands is just the latest boardroom to betray grassroots farmers with the AgriZero rort, and a bit more about tactical voting in the upcoming election.

When the news broke about this complaint from some Dutch activists to the European Commission, New Zealand media were quick to run sensational headlines, like "NZ accused of breaking climate change promise with EU". Which some people reasonably took to mean something important had happened and the EU was having a go at us.

Instead, it was some environmental activists trying a new use of the EU’s complaint system to cause a fuss. Much like we're used to here. The EU hasn’t made any finding against New Zealand or suspended any trade benefits. The complaint doesn't change anything about what makes our trade valuable to our export markets and why the EU won't break our free trade agreement just because we go a different way on Paris.

What the Dutch crowd did achieve was give the Paris devotees in New Zealand an opportunity to tell us our exports are at risk if we don't adopt this or that emissions policy. Never mind that all those policies would make New Zealand poorer, hollow out rural communities, and make no difference to global emissions.

For these true believers, the suffering from climate policies is the point, not the tradeoff. It doesn't matter to them that it won't help anything.

So, while the immediate threat is rather less dramatic than the media portrayed, this attempt to use our trade agreements to dictate domestic policy is yet another reason to keep pushing to Quit Paris.

What the EU complaint actually means

The Dutch activist group, called Both ENDS, has complained to the European Commission that New Zealand is breaking the climate commitments in our free trade agreement. It has support from the familiar collection of Greenpeace, climate campaigners, and people unhappy with the Government’s changes to environmental policy.

Their objections include the methane target, reopening oil and gas exploration, and stopping climate lawsuits against businesses (Smith v Fonterra, if you recall). Having failed to get voters to back the policies they want here, the global activist network (and they do tend to know each other) are trying to get Europe to put pressure on our Government instead.

To be very clear, this is a complaint from activists. The EU has not ruled that New Zealand has broken the agreement, and no trade benefits have been suspended.

The Commission first has to even decide whether to take the complaint further. There would then be government discussions and, if those failed, an independent panel. Trade sanctions are a last resort at the end of a long process even if there are findings of a breach. We still get a final chance to change our policy if we want, too. We don't have to be scared of trying to fix or leave Paris. Even the complainants say trade sanctions would be years away.

For the Paris-related sanctions, the test is whether an action or omission “materially defeats the object and purpose of the Paris Agreement”. That is a considerably higher bar than Greenpeace and their fellow travellers disagreeing with a government policy.

And there are several points along the way where political decisions determine whether it goes any further. The activists can’t take New Zealand straight to court. The EU still has to decide whether and how to handle this. With how the cost of living is going in Europe, their politicians are not going to make food more expensive just to satisfy these activists.

Paris shouldn’t be tied to trade

That doesn’t mean we should be comfortable with Paris in our trade agreements.

We’re repeatedly told that Paris lets countries determine their own contributions according to their circumstances. The Paris compliance process is explicitly non-punitive. But our politicians have signed a trade agreement that adds the threat of trade penalties to someone else's view of our sovereign policy, and campaigners are now trying to use it to reverse decisions made here.

Paris should not be appearing in our trade agreements. It means every attempt to bring climate policy back into line with New Zealand’s interests will become another opportunity for activists to scaremonger about our exports.

For the general public not reading the details of treaties and policies, it sounds scary enough to cause doubt.

Paris is still a bad deal for New Zealand. Successive governments have committed us to impossible targets without a credible plan to achieve them. We started off generating most of our electricity from renewables, and a large share of our emissions comes from producing food for people overseas - and with lower emissions than they could. We don’t have the same easy reductions available as countries replacing coal-fired power stations.

Cutting New Zealand food production to satisfy an emissions target would make us poorer and leave other countries to produce the food instead. That is the same economic and environmental nonsense we fought with the Farming Tax.

Our trading partners are not going to blow up mutually beneficial trade agreements just because New Zealand renegotiates climate provisions that don’t work for us and don't reduce emissions anyway. Ministers should be making that case and doing the negotiating, instead of treating every activist threat as a reason nothing can change.

Farmlands joins the AgriZero rort

Meanwhile, Farmlands is the latest Kiwi agriculture company to join AgriZeroNZ. We're now up to $308 million committed by taxpayers and agricultural businesses to a scheme that never should have started and should have been wound up already.

AgriZero is a hangover from the days when politicians and industry leaders were trying to make the Farming Tax work. We were supposed to be grateful that this money was going to find us the technology to keep up with the emissions reductions we had to make to survive under the Farming Tax.

Now, the Farming Tax has been taken off the table as Coalition Government policy and even Labour now say they aren’t campaigning on a price on agricultural emissions. But the money keeps flowing into the search for emissions reduction technologies.

Our objection remains the same: agricultural methane is part of a cycle, and policy should be based on its actual warming impact. Intervening in the biological processes of livestock is among the least useful ways to spend money on climate change.

It only makes sense for bureaucrats trying to meet the emissions accounting and Paris targets our governments signed up to, which give us no credit for how efficiently we were already producing.

Farmers are already helping fund this through their taxes and the banks and agricultural companies they deal with. Now another cooperative is contributing too. If you’re a taxpayer, farmer, and shareholder, how many times over are you expected to pay?

Farmlands says its contribution is $1 million over three years. It also says chairman Rob Hewett, who chairs AgriZeroNZ as well, was removed from the decision-making process.

Shareholders are still entitled to ask how the conflict was managed, what they were told, and why the board believes this is the right use of their co-operative’s money. The chair stepping aside isn’t much reassurance for shareholders concerned about how the conflict was managed. Certainly the perception that there has been a conflict is a problem for Farmlands.

We’ve heard from many upset Farmlands shareholders who don’t want their cooperative to be doing this kind of side project. Once again, there's a yawning gap between what grassroots farmers want and what the agricultural boardrooms decide on their behalf.

Groundswell is considering options for holding Farmlands and other organisations accountable to their constitutions, purposes, and obligations to shareholders. Shareholders have rights under the rules and laws governing these organisations, and we’re looking at how those rights could be used to make boards answer to the people they represent.

There's certainly more to come - watch this space.

What grassroots farmers really want

Together with NZ Farming and the Methane Science Accord, we’re asking farmers about their priorities for agricultural research, breeding, and methane reduction tools.

Where does low-methane breeding rank against the traits you actually need in your sheep and cattle? Do you expect to use methane vaccines or boluses? Is this where you want research funding to go?

The survey has 10 questions and takes less than two minutes. Please pass it on to any farmers who would be interested so we can put farmers’ priorities in front of the politicians and industry organisations making these decisions.

Click here to take the farmer survey.

Understanding the overhang

In our last email we raised the possibility of splitting your votes. Ani O’Brien has written a fuller explanation of how this could affect the next Parliament.

Her argument is that an electorate vote for National and a party vote for ACT or NZ First could increase the Coalition’s total seats if National wins more electorates than its party vote would normally entitle it to. Those extra electorate MPs create an overhang, while ACT and NZ First gain list seats.

The Maori Party is deliberately pursuing the same approach from the other side, encouraging electorate votes for its candidates and party votes for Labour or the Greens. And the poll results showing a decreasing Maori Party percentage of the party vote indicate it may be working. This isn't happening in a vacuum.

Groundswell doesn’t tell you how to vote, but we do want you to understand your options and what the parties are doing. Give Ani’s article a read if you want to know more.

Click here to read the article

Thank you again for your support.