Farmers propose farm-level levy

That's how Michael Ahie, the chair of Primary Sector Climate Action Partnership - He Waka Eke Noa (HWEN) describes the group's much anticipated report to Government on the system it wants them to adopt in respect of reducing agricultural emissions and sequestering carbon on farms.

HWEN comprises thirteen primary sector groups including Māori agribusiness and was set up in 2019 in a bid to stop government lumping agriculture into the Emissions Trading Scheme (ETS). Since then it's been developing an alternative approach and has consulted widely on this.

Ahie says it's important to remember that New Zealand has a biological economy and that the ETS is not the answer to dealing with agricultural emissions.

The main recommendations of the 80-page report is that a farm-level, split-gas levy with built-in incentives to reduce emissions and sequester carbon be adopted from 2025. During the recent consultation with farmers, this was the favoured option, rather than the levy being collected at the processor level. The farm-level concept is seen as the more forward looking approach because it rewards, by way of a reduced levy, individual farmers who reduce their emissions, while those who don't will be required to pay the full levy.

The other key element in the report is a proposal to set up an oversight board and a Māori advisory board to ensure that the interests of farmers and Māori are considered during the implementation phase. It is proposed that the oversight board would have a role in setting strategy and direct investment from the farm-level split-gas levy, a governance role and work closely with the Māori advisory board.

Ahie, a dairy farmer himself, says the recommendations enable sustainable food and fibre production for future generations, while playing a fair part in meeting the country's climate commitments. He says the recommended approach would enhance NZ's reputation as world leaders in low-emission food production and keep us ahead of competitors.

"I believe that HWEN is the right answer and we have worked through this with farmers; I am hopeful the Government will support our proposals," he says.

Ahie says there is seriously good science behind the recommendations and the collective has worked hard over the past two years, engaging some very bright people to give advice.

"To the critics, I say - what is the alternative? If you can come up with one that is going to be better for NZ, let me know. Our partners consider the recommended approach is robust and credible, delivers on farmer feedback and meets the Government's environmental outcomes. It sees the sector investing its own funds in incentivising and supporting farmers and growers to take up practices and technologies," he says.

Ahie says the farm-level system being recommended would enable each farmer and grower to clearly see the direct impact of their on-farm decisions and would give them incentives for using new technologies and practices as they become available and financial recognition of on-farm carbon sequestration.

He says the cost impact will vary from farm-to-farm. He says their modelling shows the proposal will have no impact on farm profit on some properties, but for some it could be up to 7.2%. He says he's confident the sector is up for the challenge and already 60% of farmers know their on-farm emissions.

Ahie says the message to farmers about the proposal is the same one he would give to his aunties: "Here is the simplest, best system by whih we can meet the emission reduction targets and be good to the whenua. We have worked hard, listened to farmers, listened to everybody and put together a very good system."

The proposal is now in the hands of the Government who have until the end of the year to decide whether to accept, reject or modify the recommendations.