Allan Barber finds a B+L NZ report which suggests global changes to how climate adaption is fostered means our farmers are at an increasing cost and innovation disadvantage

Beef + Lamb New Zealand has released updated research into climate change policies in international countries which indicates a widening competitive gap between New Zealand and its competitors. The updates build on a 2024 report and analyse the developments since then in agricultural greenhouse gas targets, strategies and policies in international jurisdictions.

The research indicates New Zealand agriculture still operates in an unsubsidised policy framework which requires it to meet a series of still quite stringent emissions targets, while most of the competitors are still focused on large-scale public funding to incentivise and subsidise farmers to meet environmental outcomes. Some countries have even pulled back from their previous climate change targets.

As the general election approaches, with the possibility of a change of government, agriculture faces the threat of yet another change in climate change policies and emissions targets. Far from reducing the identified competitive gap as it currently stands, there is a strong possibility New Zealand agriculture could face more severe penalties in comparison with our competitors.

Decisions since the 2023 election have seen common sense responses to several policy settings, including, a reduction of the methane target, limits on land use conversions to forestry,  removal of agriculture from the ETS and decision not to put a price on agricultural emissions. These changes have brought New Zealand more into line with overseas jurisdictions. It is also worth noting the Australian Labor government stated last year that it had no intention of pricing agricultural emissions.

The B+LNZ report shows that any reversal of these decisions by a future government is not necessary and would simply signal a desire to appear more virtuous than the rest of the world. The added danger would be a worsening of the competitive position of this country’s economic engine room instead of maintaining an already disadvantaged status quo.

The only major agricultural competitor still pricing emissions is Denmark which also pays its farmers large subsidies in compensation (in many cases representing more than the price) to encourage research into alternative climate change reduction methods.

The international competitor’s policies closest to New Zealand’s is neighbouring Australia which has relatively similar targets since our target was reduced from the previously unachievable 24-47% set under the Labour government when James Shaw was the responsible Minister, to the current 14-24% reduction by 2050.  New Zealand’s net zero target for nitrous oxide was left unchanged.

Australia too applies very few subsidies and is consequently the country most comparable to New Zealand. It does not have specific agricultural emissions targets, but its recently finalised Agriculture and Land Sector Plan aims to stabilise emissions by 2030, reduce emissions intensity by 2035, and aim for a reduction of gross emissions from 2040 with a targeted reduction of 28% of all agricultural emissions including energy by 2050. 

A major proviso in the plan is the intention to maintain food production and export competitiveness. I get the distinct impression some of New Zealand’s political parties are unaware of the importance of achieving both these points when setting climate change targets.

The Australian plan sets out the Australian Government’s strategy for reducing emissions from agriculture while maintaining food production and export competitiveness. The key points are:

• Continued expansion of the Australian Carbon Credit Unit (ACCU) market, including projects related to soil carbon, vegetation management and methane abatement from livestock and manure management.
• Continued investment in methane-reducing technologies and practices, including feed additives, genetics and improved manure management, supported through government research and industry programmes.
• Ongoing implementation of voluntary environmental markets and private-sector carbon projects, allowing farmers to generate revenue from emissions reductions and carbon sequestration.
• Additional public investment in carbon farming support, including A$27.8 million over four years from 2024–25 to expand the Carbon Farming Outreach Program, which includes A$17.5 million in grants to upskill farm advisers and land managers. This support is largely aimed at integrating trees into farms, and Australia has a law that requires the Minister for Agriculture to approve any purchase of a whole farm for conversion to forestry.

California has introduced a range of incentives and grants to subsidise biodigesters and to pay carbon credits for the biogas produced, while Canada is also looking at similar schemes.

B+LNZ does not seek any reversal of New Zealand’s long-established policy of having almost no agricultural subsidies. Instead of re-considering pricing which would put our sector at an even worse competitive disadvantage, B+LNZ is encouraging a more creative approach could be considered.

Examples of the type of incentives that could apply include rebates on the adoption of new technologies, allowing credits through the ETS for on-farm practices and technologies which reduce emissions, better access to bank credit for emissions reduction actions, recognition through the ETS for biodiversity benefits from the sequestration of natives, and grants for pest management of native vegetation areas.  

Agriculture in New Zealand is in a very buoyant space at present because of high global demand for protein. It is also being hit with higher input costs that will remain high even if or when income falls.

It is critically important that government policies recognise at all times agriculture’s immense contribution to food production and the economy. This requires a sensible rather than ideological approach to measures designed to mitigate climate change.