Owen Hembry

Owen Hembry is the business news editor of the New Zealand Herald

ETS deadline a tall order, Nats say

Agriculture is the engine room of New Zealand's economy. Photo / Christine Cornege
Agriculture is the engine room of New Zealand's economy. Photo / Christine Cornege

It will be a tall order to put the agriculture sector into the emissions trading scheme in 2015, says Agriculture Minister David Carter.

With less than two weeks to go until the election, the main parties have issued their policies for the agricultural engine room of the economy.

In 2014, National plans to review the legislated entry of agricultural emissions into the scheme in 2015 and says it will not impose a liability unless there are technologies to reduce them.

"It's going to be a tall order for us to get it into an emissions trading scheme by 2015 because I do not believe, at this current progress, we'll have the solutions available," Carter said. "I think we will get tools but it'll take more time than that and it'll take good investment in science."

Part of National's primary sector policy is establishing a Crown Water Investment Company, funded with up to $400 million from the partial sale of state-owned assets to make equity investments in irrigation projects.

New Zealand's greatest competitive advantage, beside its people, was water, Carter said.

"How do we find a way to harness that, store it, allocate it and utilise it far more wisely than we have in the past?"

Federated Farmers president Bruce Wills said the agricultural sector body was apolitical but the reality was National agreed with the organisation more often than Labour did.

"Particularly their stance on [the emissions trading scheme] we think is far more sensible, pragmatic and economically realistic," Wills said.

"Sadly it's only a penalty on New Zealand, it will do absolutely nothing to reduce the global warming issue that this whole tax is aimed at."

Labour spokesman for agriculture Damien O'Connor said it was essential to change monetary policy to better support all export sectors, including agriculture and horticulture.

"The Reserve Bank is solely focused on inflation at the moment," O'Connor said.

"Most other Western countries have a focus on exports, on the general economy, on jobs and we can do that through more levers than just adjusting the interest rates, which is currently the only simple and sole focus of monetary policy."

Water was the country's single greatest asset, beside human capability and land, O'Connor said.

"We will have a small charge on commercial utilisation of water so we can reinvest in science and monitoring and management of water."

O'Connor said many farmers and primary producers acknowledged Labour's policy initiatives.

"I wouldn't expect any farmer to welcome additional costs or charges but they do acknowledge that we need some wise support and guidance from central Government."

Agriculture was the single most important area of the economy, he said.

"With the global demand for food increasing, there are huge opportunities but the ability to capitalise on those will depend upon our wise management, not sitting back and hoping that the market will deliver the long-term returns to this country."

On agriculture

National
* Establish a Crown Water Investment Company with up to $400 million for water storage and irrigation projects.
* No liability on agricultural greenhouse gas emissions without technologies.
* Continue investment in the Primary Growth Partnership, with nearly $500 million of projects under way.

Labour
* No overseas farm or forest land purchase unless investing in processing and related jobs.
* Broaden Reserve Bank primary function to include stability of the currency.
* Double Sustainable Farming Fund to $16 million and reinstate a 12.5 per cent R&D tax credit.

Green
* Ensure a fairer approach to trade, including support for country of origin labelling.
* Reduce dependency on oil, agrochemicals and imported grains.
* Organic sector growth, including promoting a target for half of production to be organic by 2020.

- NZ Herald

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