Emissions pricing proposal splits farming industry opinion

Farmers want yet more changes to the government's emissions pricing proposal, released on Wednesday.

There was outcry from many in the sector to the draft version of the plan a few months ago, and the government has now responded to the more than 20,000 public submissions.

The Prime Minister Jacinda Ardern said the government had listened and there was now broad consensus on the plan, which was important if it was to survive changes of government.

The final details will take until about March 2023 to be worked through.

Changes announced on Wednesday include:

• Expanding the types of tree and vegetation cover that can be used to offset emissions (trees absorb carbon dioxide from the air)
• The levy price will now be set "as low as possible"
• Social, cultural and economic impacts will now be taken into account when setting the levy price
• Farmers will be able to manage and report their emissions as collectives.

Changes a 'step in the right direction'

DairyNZ chair Jim van der Poel said the changes were a step in the right direction, with the new plan much more closely in line with what the sector was wanting.

But some areas still needed more work, he said.

He wanted what was called the 'processor-level backstop' dropped. In that scenario, if a pricing system is not in place by 2025, emissions will be tallied up by processors such as Fonterra - which then splits the cost among farmers.

Van der Poel also wanted more sector input on the pricing oversight body, and for their advice to go straight to ministers rather than through the Climate Change Commission.

He also wanted changes to the legislative timelines.

Fed Farmers remains opposed to the plan

Despite the government changing tack and now pledging to set the levy price as low as possible, Federated Farmers said it was still too focused on using the price of methane as a "stick" to achieve reduction targets.

"Only New Zealand is taking the punitive step of taxing efficient, unsubsidised food production, even if it comes at huge costs," spokesperson Andrew Hoggard said.

The update was vague and may not be any clearer until the legislation was introduced in the middle of next year, he said.

Hoggard said Federated Farmers would not support any pricing mechanism without a review of the methane targets, to recognise whether biogenic methane was creating additional warming of the planet.

DairyNZ said the government on Wednesday confirmed it would ask the Climate Change Commission to look at that very issue.

"[We have] previously called on the government to use the latest and best science when setting methane targets," van der Poel said.

"The current metric overstates the warming impact of methane emissions by three to four times when emissions are stable, as they are in New Zealand."

Oxfam appalled at 'lowest price' change

Oxfam Aotearoa's climate justice lead Nick Henry said it was frustrated the government was not taking climate destruction seriously enough.

"We should be aiming for the lowest possible climate pollution, not the lowest possible price on agricultural emissions."

It wanted the government to price emissions now, not in three years.

Meat industry acknowledges progress, but says details need work

Beef + Lamb chief executive Sam McIvor said the report showed progress, but significant work was needed on critical details.

It welcomed the pledge to fix the levy price as low as possible, and to not change it for five years.

"It's essential a cautious approach is taken and that we ensure what farmers are asked to do is fair and equitable, doesn't threaten farm viability or result in emissions leakage [loss of market share to overseas producers]".

Despite the sector getting more input on setting the levy price, it still believed the Climate Change Commission had too much sway on the decisions.

Meat Industry Association chairman Nathan Guy said the red meat processing and exporting sector was cautiously optimistic about the government's changes. But it also remains opposed to the prospect of an interim processor-level levy.

Groundswell labels plan 'economic sabotage'

Rural lobby group Groundswell has called the pricing policy "economic sabotage that will drive food prices up and devastate rural New Zealand".

"It defies common sense to reduce the production of the world's most emissions efficient food producers through a blunt tax," co-founder Bryce McKenzie said.