NZ announces changes to livestock emissions scheme after farmers’ protests

Highlights

• After farmers’ protests, the government is making changes to the agriculture carbon emissions scheme
• As per the announcement, it proposes to keep prices low and use on-farm forestry to offset emissions
• The final decision is expected by early next year

The New Zealand government has decided to change the proposal to price livestock emissions. After protests from farmers in October, the government has come up with some changes to the original proposal to price agricultural carbon emissions.

In a recent announcement (21 December 2022), the New Zealand Government said that having listened to concerns raised by farm groups, it was going ahead and making changes to its proposed plans to price long-lived agricultural gases and biogenic methane that come from cow and sheep burbs.

The main changes in the original plan were related to keeping the pricing low and allowing farmers to use on-farm forestry to offset their carbon emissions.

While making the announcement, Agriculture Minister Damien O'Connor said the government understood the need for greater certainty for farmers and growers in their business planning.

He said while the basic plan was similar to the initial proposal, a crucial difference is that instead of using the rising price of carbon to drive behavioural change, the government would now set the levy price as low as possible. The government is also mulling increasing the types of trees and vegetation on farms that can be used to offset emissions.

What was the original plan?

In October, the government came up with a proposal to tax agricultural emissions, including animal burps, urine, and dung. The proposal was to get the pricing system into force by 2025.

According to the consultation document, the NZ government expected the revenue to get plowed back into the agriculture sector for new technology, research, and incentive payments to farmers.

Prime Minister Jacinda Ardern supported the plan and said that the farmers would benefit from it, and that the country had the first-mover advantage. The government had hoped that the plan, which when introduced, would make New Zealand a large agricultural exporter and the first country to have farmers pay for emissions from livestock. This plan was widely criticised by farmers.

In October, farmers came out in protest, saying the tax would destroy their community. They described taxation as `unworkable regulations’. They said that if the tax is levied, the farmers would be forced to sell their farms and New Zealand’s mainstay farming would be affected.

Jacinda Ardern on changes

Ardern while announcing the changes said that the government would set up a system that lasts. The changes have been mostly welcomed by the farming sector.

She stressed that overseas customers wanted low-emissions products and without a plan to cut dangerous gases, the future of NZ exports was at stake.

Further, the government was going to provide full support to farmers in implementing this plan.

In this context, the government has set up joint ventures with ANZCO Foods, Fonterra, Ravensdown, and Silver Ferns Farms to manufacture tools that reduce emissions for farmers.

Final decisions on the pricing scheme will be made early next year.