Carbon farming has hidden consequences

New Zealand’s Zero Carbon Bill is based on the assumption that carbon farming through forestry provides a climate-change solution, at least until the arrival of new technologies that allow New Zealand to move away from fossil fuels.

In contrast, Environment Commissioner Simon Upton has suggested that using forestry for carbon-dioxide offsets is not the away to go. He contends these should only be used to offset the shorter-lived agricultural gases.

The Government does not agree with Commissioner Upton for reasons that can be readily appreciated. Without carbon sinks provided by new forests, there are no big tools in the kitbag to get anywhere near zero carbon.

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DIRA review nibbles at the status quo and avoids the big questions

The current review of the Dairy Industry Restructuring Act (DIRA) does not address the big decisions that face the New Zealand dairy industry. That may well be a wise decision by Government.

Big decisions will indeed be necessary over the coming years. Clearly, they are difficult decisions. However, trying to make those decisions through the DIRA mechanism would be a brave decision and, in all likelihood, with unintended consequences. So, the Government has stepped back.

Instead, Government is using DIRA to nibble around the edges.  Whether those nibbles are the correct nibbles remains a moot point.

Why methane is different

This is the second of a series of articles discussing some of the difficult issues that have to be understood and resolved in relation to New Zealand’s proposed Zero Carbon Bill. The first article is here 

For many years, we have been told that agriculture contributes approximately half of New Zealand’s greenhouse gases. This supposed fact has been seared into the minds of every New Zealander who reads newspapers, listens to radio or watches television.

What very few people understand is that this supposedly simple fact is based on a dodgy assumption that the effects of methane can somehow be turned into equivalent units of carbon dioxide.

Fonterra’s strategic reset is up against headwinds.

Fonterra’s Q3 results for 2018/19 show that Fonterra is running into headwinds with its strategic reset. That is not to suggest the current policy is necessarily flawed. Rather, it reflects the pickle that Fonterra has got itself into in recent years.  It’s hard turning around a big ship.

The general media has focused on three headline messages. The first is that estimated milk price to farmers for this season just ending has dropped by 10c to between $6.30 and $6.40 per kg milksolids (fat plus protein).

The second message is that the initial estimate for the coming season is only $6.75, whereas most were expecting to see a ‘7’ at the start of the 2019/20 figure.

The third message is that this year’s underlying profit (before asset sales) will only be 10-15 cents per share.  Back in September it was 25c to 35c.

These are all disappointing numbers, but the really important longer-term messages require deeper analysis.

Zero Carbon Bill is just the start for agriculture’s greenhouse gas adaptation

The Zero Carbon Bill introduced to Parliament this week answers some questions but raises many others.  There are big challenges ahead for everyone, but particularly for farmers and their leaders.

As always, the devil will be in the details. These details have yet to be spelled out. More importantly, it is apparent that many of the details have yet to be determined.

If rural leaders wish to have some influence on these details, they will need to be much better skilled-up than in the past.  The next few months will be crucial as the Bill works its way through the committee stages for enactment.

In the meantime, farmers are entitled to think they are in danger of being left to carry much of the pain.  This is because the rest of the community can lean on forestry, whereas methane is to be excluded from those forestry credits.

The big get bigger in American agriculture

Every five years the USDA undertakes a census of American agriculture. The latest survey has just come out in recent weeks. The big message is that the big are getting bigger.

Aligned to this message is that family farms continue to decline. This is particularly the case in dairy. However, it is also the case in cropping, where the new generation of prospective family farmers prefers the urban life, but does not necessarily want to sell the land. So leasing of land is huge, particularly in the cropping heartland of the Midwest.

In total there are over two million American farmers. Seventy-five percent of the production comes from five percent of the farmers. More than half of American farms are cash-flow negative. The average age of American farmers is now 57.5 years, up 1.3 years in the last five years.

Where to for Chiwi agrifood

The current plan for Chinese Yili to buy Westland Co-operative Dairy has brought renewed discussion about the role of China within New Zealand agrifood industries. Of course, the Westland issue is just one part of a much greater issue about the trading and political relationships linking our two countries.

There is a need for ongoing debate because the issues are profound. There is also a need for the debate to be informed.  I hope that what follows here will contribute to an informed debate.