Rabobank says farmers should not coast when it comes to emissions. Photo / RNZ
Rabobank says farmers should not coast when it comes to emissions. Photo / RNZ
Now much of the previous Labour Government’s environmental legislation for agriculture has been reversed, farmers should not take that as an excuse to coast when it comes to greenhouse gas emissions, Rabobank says.
The rural lending specialist said in a paper released at this morning’s Primary Industries Summit in Wellingtonthat rural voices have argued necessary transitions were being rushed and in some instances forced on them through unsympathetic government policies and stifling regulations.
“The election of a new coalition Government in October 2023 has to some extent addressed their concerns, with strong indications in coalition agreements and subsequent policy steps in June this year to confirm the removal of agriculture from the Emissions Trading Scheme (ETS) as part of a move to a lighter-touch regulatory regime for the environmental impacts of farming,” the bank said.
“Taken at face value, this has given New Zealand’s 50,000 farmers and the wider food and agricultural sector an expanded window of opportunity to transition their businesses,” the bank said.
“However, it would be unwise for farmers and the government to ‘coast’ during this respite before resuming the journey to sustainably reduce emissions from New Zealand agriculture,” it said.
Rabobank said there were other “voices” at the table that were getting louder.
“These are the voices of customers (with increasing expectations of the world’s most powerful food processing and marketing companies) and from the wider supply chain, including investors, who also face significant regulatory pressures to minimise Scope 3 emissions,” the bank said.
Scope 3 emissions, which include indirect emissions from a company’s value chain, often represent the largest portion of corporate-related emissions.
Rabobank said one recent review found over 80% of New Zealand’s exports are headed to countries with mandatory climate-related disclosures either in force or on the way, while free-trade agreements are increasingly laden with enforceable obligations on emissions and other sustainability targets.
“This growing web of international obligations will not afford New Zealand producers the same patience that the New Zealand Government has extended to them.
“While regulatory pressures may have temporarily abated, Rabobank’s view is that farmers and the Government should not get complacent and should use the rest of the dialogue and the timeframes to move forward to protect its pre-eminent role in global food production.”
“The New Zealand food and agricultural sector will be well served by reading the economic signals, not listening to the noise (from both sides) and by keeping up the focus on reducing emissions despite the current respite it may enjoy from local regulation,” the bank said.
Rabobank New Zealand chief executive Todd Charteris says Kiwi food producers should remain focused on reducing emissions amid the respite from local regulations. Photo / NZME
Rabobank’s paper, titled Maintaining Our Emissions Edge, is the third in a series of white papers developed by the bank aimed at helping New Zealand’s farmers and the wider agri sector with the transition to producing more food with a smaller emissions footprint.
In launching the paper, Rabobank New Zealand chief executive Todd Charteris said many rural voices have been saying for some time that necessary transitions were being rushed.
He said the lighter-touch regulatory regime had given farmers a breather.
“Taken at face value, this has given Kiwi food producers an expanded window of opportunity to transition their businesses.”
Charteris said New Zealand’s food and agriculture sectors would be well served to read the economic signals and maintain a focus on reducing emissions despite the respite from local regulations.
Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.
