Falling on-farm inflation and stable prices lift farmer confidence
The days of rising on-farm inflation and subdued farmgate prices are coming to an end for farmers, helping lift confidence.
DairyNZ chief executive Tim Mackle told Parliament’s Environment Select Committee in Wellington today that farmers need a fair target.
“Farmers want to do what is right. They are ready to go on this journey, but they need a fair target that they can buy into. A 47% methane reduction target is simply setting farmers up to fail, if the tools are not available,” says Mackle.
The government set a new emissions reduction target for all greenhouse gases, except methane, to net zero by 2050, in line with New Zealand's commitments under the Paris Agreement.
It sets a target for 10% reduction in biological methane emissions by 2030, and aims for a provisional reduction ranging from 24%to 47% by 2050
Mackle says the New Zealand dairy sector is committed to playing its part in the transition to a low-emissions economy, alongside the rest of the country.
“We are acutely aware of the importance of looking after the environment and maintaining sustainable and competitive businesses too.
“We know there are costs for our farmers but there are also costs for global inaction. That’s why we are seeking pragmatic and prudent policies that enable action and support our farmers to play their part on climate change.
DairyNZ proposes that the 2050 methane reduction target be set at up to 24%t and regularly reviewed against robust criteria: the position is supported by Fonterra and its Shareholders’ Council, Miraka, Synlait and Tatua.
“This will be a real challenge for our sector, but we are up for it. While there are things we can do now on farm, much of the reduction in emissions will be reliant on technological advances in feed, breeding or other interventions.
“A lot is being asked of our farmers across a variety of issues such as water quality and biosecurity. If a methane target is set based on a global reduction scenario, rather than what is sensible at home, then they will simply disengage.
“This isn’t an academic exercise. There will be real implications and real costs, for real people. At the end of the day, most farmers are small business owners doing their best.
DairyNZ estimates that with an up to 50% cut in methane, dairy farmers’ total profit could reduce by 33-42% across the 2030-2050 period.
“This is a substantial loss of income and is more than 10 times higher than the cost of $2500 per farm estimated in the Government’s analysis. The impact for rural communities and the wider economy could be huge,” says Mackle.
Mackle said we can’t afford to lose sight of the fact that New Zealand is responsible for less than 0.2 percent of the total global emissions and dairy farmers are among the most emissions efficient producers in the world.
“While there may well be some benefits to leading the world on climate policy, this could constrain our ability to lead the world in other areas – most notably the efficient production of high quality, low emissions milk.
“Our biggest contribution to global agricultural emissions reductions will be to show what is possible both on-farm and with new technologies, once they become available.
“This highlights the importance of continued investment in scientific research and development that will help us reduce agricultural emissions.
“DairyNZ knows how important it is for us to move on climate change, but we also know the importance of moving at a pace that doesn’t leave farmers, families and communities behind,” Mackle concluded.
