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PR: Details regarding alternative emissions pricing proposal

Groundswell NZ Team

The following is an open letter to New Zealand Farmers and Growers, providing details in support of Groundswell NZ's alternative proposal for emissions pricing.

Dear New Zealand Farmers and Growers,

Further to Groundswell NZ's alternative emissions pricing proposal released in March, we are pleased to outline more detail below.

Respect for farmers money

Groundswell’s top priority is the efficient use of farmers' money. Every spending decision must work backwards from a detailed assessment of exactly what sum is required, then through every plausible option to reduce that cost. We strongly disagree with the HWEN approach of first taxing farmers to create a giant slush fund, then working out ways to spend it all.

Funding assessment criteria, in descending order:

  • Establish research needs (identify gaps) through a stocktake of existing work (including overseas)
  • Target projects with tangible benefit to farmers and environmental outcomes
  • Seek partnerships with other projects (including overseas) to avoid duplication
  • Utilise all available government funding and entities – Climate Change funds, Ag Research, Universities etc
  • Utilise existing industry levy body resources

Cost of Groundswell’s proposed short-term emissions plan

$10 million per annum, indicative cost for research and development (based on HWEN estimates).

No additional cost to Farmers.

This funding will come entirely from existing levy body payments after exhausting all other cost reduction opportunities in the funding assessment criteria.

Dissemination of best practice information and promotion of positive actions will be undertaken by levy bodies. Our view is that more focus should be directed towards actions on the ground to support farmers actively addressing environmental issues through individual efforts and the likes of Catchment and Landcare Groups.

Farmers pay over $100 million per year in industry body levies, Groundswell NZ seeks a full review and re-prioritisation of that funding so it can be allocated where farmers need it most. An increase in farm levies would be considered to source additional funds, but only if absolutely required.

Levy bodies and Government should not be asking farmers for additional funds until all existing resources are appropriately allocated.

The last thing agriculture needs is more bureaucracy. We already have the administrative capability within our levy body structure. We must use what we have more efficiently.

Groundswell calls on the levy organisations to put this proposal to their levy payers for a vote.

No direct Government funding is currently required outside existing projects and funding.

HWEN Costings

He Waka Eke Noa have not yet provided any cost analysis of their options. Farmers have only been provided ‘placeholder’ emissions prices during the consultation period. Groundswell NZ challenge HWEN to provide farmers the real price they will be taxed.

Initial ‘placeholder’ cost analysis will see a slush fund of up to $350 million per year created by 2030.

What cost/benefit analysis can HWEN provide to assure farmers this sum is necessary, and farmers are getting value for money?

Groundswell is concerned the prospect of additional revenue from this giant slush fund has preoccupied our levy bodies and distracted them from properly representing farmers at the HWEN negotiating table.  

Expected emissions reductions

We don’t know.

Unlike HWEN, Groundswell will not invent facts and figures when the underlying information is not yet available. HWEN has estimated a 4% emissions reduction from the uptake of new technology but has not provided any information on what that technology is and when it will be implemented. No credible reduction estimates can be made at this time.

We do however expect best practice initiatives to return similar emissions reductions to the HWEN pricing signal (1% per year). With half of HWEN’s claimed emissions reductions coming from other environmental policies, the Groundswell NZ plan will achieve comparable total emissions reductions.

Any major advancement in mitigation options would be quickly adopted and incentivised in the most efficient and effective way possible. This would ensure no slippage in potential emissions reductions.

Groundswell has not pre-determined that a tax will be needed to achieve uptake. All avenues should be assessed, and additional funding only sourced as required.

Emissions reduction technology is being withheld by Government

The Government’s overemphasis on taxing farmers emissions at the expense of developing mitigation options has seen promising methane inhibiting technology sit on a government desk for two years waiting for approval. The Bovaer feed additive could reduce methane emissions by up to 30% and has already been approved by the European Union and other export competitors.

Let’s stop wasting time on taxes and re-focus on finding the solutions.

Farm level Reporting

Not currently fit for purpose.

The benefit of farm level reporting will remain negligible until modelling and data management technology improves significantly. There is no point in farmers spending up to 75 hours per year to create an emissions number that is not accurate. This tool will become more relevant when genuine mitigation options are available.

Carbon sequestration rate data is not currently sufficient for emissions modelling purposes. More research in this area is also required.

Continued funding will be provided to develop fit for purpose modelling capability with a focus on easy-to-use data entry with no duplication.

Groundswell NZ will continue to develop our proposals alongside farmers and industry groups. We seek the best possible outcome for farmers and the environment and appreciate everyone’s support to help us do so.

Kind regards,

Groundswell NZ Team

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