It's The Margins That Matter
OPINION: It appears to be difficult for people who haven’t tried to run a business to understand the difference between assets and cash.
One-third of dairy farms could "go backwards financially with flow-on consequences for GDP", DairyNZ says in its submission to the commission
DairyNZ has modelled the draft proposal's impacts on rural communities. If the recommendations are adopted, milk production could fall 7-13% by 2035.
DairyNZ chief executive Tim Mackle says farmers are concerned the commission's economic modelling isn't realistic and the assumptions don't properly capture the true cost.
"The commission significantly underestimates the economic impacts and DairyNZ has forecast milk production to reduce under these proposals. However, the commission has assumed stock numbers will reduce, along with land use and methane - but milk production will stay the same.
"The national cost shouldn't be an excuse for inaction, but New Zealanders need to go into this with eyes wide open and an understanding of the true costs, to make informed decisions about wwhere we target our investment."
DairyNZ is also concerned the recommended carbon budget goes beyond the Zero Carbon Act - lifting the reduction of methane from 10% to 13%.
"This effectively increases the scale of our challenge," notes Mackle.
"The commission's pathway for biogenic methane also requires significant changes on farms and rapid technological breakthroughs, that we are not confident will be achieved in such a short ttimeframe."
Sheep and beef farmers are worried that the proposal for New Zealand to reduce its reliance on forestry offsets don't go far enough and will lead to "swathes of New Zealand sheep and beef farmland being converted to pine trees."
Beef + Lamb NZ (BLNZ) chief executive Sam McIvor warns that it will have significant negative impacts for sheep and beef farming and for rural communities.
BLNZ also oppposes the recommendation for the Government to implement measures that would lead to a 13.2% reduction of biogenic methane emissions below 2017 levels by 2030.
This represents a 32% increase in the level of ambition compared to the 2030 biogenic methane emissions to 10% below 2017 levels by 2030," notes McIvor.
"The commission has deemed that these reductions are achievable on the basis of further improvements in productivity, based on the gains the sector has achieved in the past," he adds. "While it is true the sector has achieved a lot, there are limits to what the sector can continue to achieve."
There are some proposals that have the support of farmers, like the split gas approach, the He Waka Eke Noa partnership and investment for better rural digital connectivity.
Consultation ended on March 31 and the commission must now deliver its final advice to the Government by the end of May.
