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New Zealand lodges draft proposals to tax cow and sheep burps

By Chris McCullough, for The Fence Post

The New Zealand government has launched draft proposals to tax farmers on their cattle and sheep burps in a bid to tackle rising greenhouse gas levels.

If adopted, New Zealand will be the first country in the world to enter into such a scheme that will tax farmers on the amount of methane produced by their livestock.

These unique plans have been drawn up by the government and farming representatives in a bid to tackle the country’s greenhouse gas emissions, almost half of which are produced by agriculture.



When cows burp, they release bursts of gas that are full of methane, a greenhouse gas that traps heat from the sun more than 20 times as efficiently as carbon dioxide.

Professor John Wallace from the University of Aberdeen, UK, outlined the context of how important controlling these gas levels are.



“People think of carbon dioxide as the main greenhouse gas, but methane is pretty important too,” Wallace said. “From all the greenhouse gas emissions produced by man, 16 percent of this is methane while around a third of that comes from ruminant livestock.”

Cows have multi-chamber stomachs that rely on bacteria to break down plant-based food. In this digestive process, a fully grown cow can release up to 500 liters of methane into the atmosphere each day.

There are 5 million people in New Zealand along with 10 million cattle and 26 million sheep.

In the past agricultural emissions have been exempted from the country’s emissions trading scheme, but this has come under intense scrutiny more recently.

A number of groups have criticized the government for this exclusion of agricultural emissions and have urged it to do more to stop global warming.

The new proposals plan to charge farmers for their gas emissions from 2025, with different charges for those gases that are shorter and longer term.

Farmers will receive incentives in the scheme if they can demonstrate their emissions are falling by using feed additives and they can use on-farm forestry areas to offset emissions.

REACTION FROM THE AG INDUSTRY

Dairy farmer Andrew Hoggard, who is also the national president of Federated Farmers of New Zealand, said he broadly approved of the proposals.

“We’ve been working with the government and other organizations on this for years to get an approach that won’t shut down farming in New Zealand, so we’ve signed off on a lot of stuff we’re happy with,“ Hoggard said. “But you know, like all of these types of agreements with many parties involved, there’s always going to be a couple of dead rats you have to swallow. There are still the nuts and bolts to be hammered out, like who actually implements the scheme, so there’s still stuff to work through with the government.”

Last month, New Zealand’s finance minister dedicated NZ$2.9 billion for initiatives to tackle climate change, which were to be funded by an emissions trading system that taxed polluters.

The money raised from this livestock burp tax scheme will be invested in research, development and advisory services for farmers, the country’s environment ministry said.

Climate Change Minister James Shaw said, “There is no question that we need to cut the amount of methane we are putting into the atmosphere, and an effective emissions pricing system for agriculture will play a key part in how we achieve that.”

The proposals have been introduced for consultation and a final decision on them is expected to be made by December.

FARMER REACTION

However, not all New Zealand farmers have faith in the scheme. Kerry Worsnop is a beef and sheep farmer on the east coast of New Zealand near Gisborne who has many doubts the tax will fulfill its goal.

“Grassroots farmers are struggling with the tax mainly because they have no idea what this will cost them,” she said. “Plus they don’t know when or how they would be able to stop paying these levies or do we just pay them forever and go out of business?

“Sequestration is deliberately limited to ensure sufficient pain is induced to force change which farmers instinctively feel is unjust. In fact, if all sequestration on beef and sheep farms was eligible it is unlikely those farms would face any levy, which is not the outcome sought by policy makers. Remember this has more to do with politics than science!”

Worsnop said farmers feel abandoned by policy makers especially those whose farm systems are more or less in-balance. These are farmers who have stabilized livestock numbers and have plenty of on farm sequestration through trees and plants but are being asked to potentially heavily reduce farm profitability via this tax.

“They know that these taxes are only being applied in order to drive enough farmers out of existing business models or into planting trees, to ensure that the carbon economy is able to keep emitting CO2,” she said. However, our country will still look good internationally because we will have met our NDC (Nationally Determined Contribution).

“Many of us don’t feel this is fair, not least because the mitigation options available to many farmers are very simply non-existent, especially in our hill country landscapes.

“We are expected to change land use or reduce production, both options result in fewer farms, fewer farmers and potentially communities in turmoil.

“Meanwhile our government has reduced fuel taxes to alleviate ‘pain at the pump’ for consumers and is currently trying to drum up international interest in tourism returning to NZ, both of which are actions which make little sense if aligned with the urgency being devoted to taxing farmers into acting on climate change,” she added.

Worsnop said the tax has the potential to be utterly devastating for parts of the pastoral sector in New Zealand. Even worse, the recent trade agreement with the EU suggests no country is likely to pay a premium for New Zealand agricultural products as a result of implementing these changes.

“Without acknowledging the different impact cycling methane has on warming, pastoral agriculture reductions will continue to be treated as exchangeable with our ever increasing carbon economy,” she said.

“My fear is that the cuts asked of us are only likely to increase over time, as electoral cycles dictate that policies not upset the masses by inflicting the true cost of CO2 emissions on the voting populous, of which, of course, farmers are a very tiny minority.

“Most farmers I know are happy to do their bit however they can, but they need a path that leads them somewhere, using tools, not taxes.

“We need cost effective inhibitors, genetics, and a better understanding of methane natural sinks in order to provide farmers hope that there is a future in growing good food the natural way.

“The current proposals send a very somber message that farmers are disposable, that governments see us as a problem, rather than the solution and we need to pay a price for that.

“This message is incredibly damaging. Our policy and farming leaders desperately need to turn that around. I just hope it’s not too late,” Worsnop said.

Ag & Politics

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