Tuesday, 14 November 2023 08:55

New Govt 'makes no difference'

Written by  Sudesh Kissun
Fonterra director Leonie Guiney chats with Fonterra shareholder Murray Marshall at the AGM last week in Methven. Fonterra director Leonie Guiney chats with Fonterra shareholder Murray Marshall at the AGM last week in Methven.

The change in government following last month's general elections doesn't change the need for an on-farm emissions target, says Fonterra chair Peter McBride.

He told the co-operative's annual general meeting in Methven last week that the strongest motivating forces are offshore.

Farmers, who have faced an avalanche of regulations under the previous Labour Government, are expecting a more sympathetic hearing from the incoming government, likely made up of National, ACT and NZ First. Both National and ACT favour delaying the agriculture sector's entry to any emissions trading scheme.

But McBride hinted that farmers shouldn't expect a change in Fonterra's sustainability drive because of changes at the Beehive.

"I do want to be very clear with you that, respectfully, the need for an on-farm target does not change because of the general election," he says.

"The strongest motivating forces are offshore and, from my perspective, are both geopolitical and commercial in nature."

McBride says being a leader in sustainability is a fundamental part of the co-op's strategy.

He cautioned that sustainability and emissions are also the new trade barriers.

"We could essentially be locked out of some of our most valuable markets if we cannot demonstrate emissions reductions."

He noted that the EU is introducing a Carbon Border Adjustment Mechanism that applies carbon tax to certain products imported into the EU. The EU is also looking to impose carbon charges on transport of goods to market, levied on all large ship entering their ports.

The other main commercial driver is access to funding and capital - for both the co-op and individual farming businesses.

McBride says the main banks and financial institutions have set emissions reduction targets.

"Our on-farm emissions and the co-op's operating emissions are a large part of their Scope 3 emissions, which they are seeking to reduce."

Some Fonterra farmers could switch their supply to other processors if Scope 3 target becomes financially difficult to achieve.

McBride acknowledged that some Fonterra competitors may use this as a procurement tool in the short term.

"But the commercial reality of doing business at scale internationally will capture all of us in time. They will be late to the table, and presented with an even bigger elephant to eat."

More like this

Aussie farmers get A$8.60/kgMS as opening milk price

Australian dairy farmers supplying Fonterra are getting an opening weighted average milk price of A$8.60/kgMS for the new season or around NZ$9.26/kgMS -  NZ74c less than New Zealand suppliers, based on the current exchange rate.

Featured

LIC Space folds for good

Farmer co-operative LIC has closed its satellite-backed pasture measurement platform – Space.

Editorial: Time for common sense

OPINION: The case of four Canterbury high country stations facing costly and complex consent hearing processes highlights the dilemma facing the farming sector as the country transitions into a replacement for the Resource Management Act (RMA).

National

DairyNZ Farmers Forum underway

Over 300 farmers and rural professionals have gathered in Hamilton for the first DairyNZ Farmers Forum for this year.

Machinery & Products

Shearing legend hooked on CanAm

Sir David Fagan, world-renowned competitive sheep shearer with 642 shearing titles worldwide and a knighthood to his name, now runs…

50 years of tractor pull

This year, the Fieldays Tractor Pull, in association with PTS Logistics, mark a major milestone – 50 years of crowd-thrilling…

The Wrangler's birthday bash

It's the Wrangler Limited’s 30th birthday and to celebrate the milestone a prototype of the E Series Wrangler - a…

» Latest Print Issues Online

Milking It

Free speech

OPINION: The Free Speech Union is taking this one too far.

Drug survey

OPINION: New national data from The Drug Detection Agency (TDDA), a leading workplace drug tester, shows methamphetamine (meth) use is…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter