Comment: Pressure from PM makes agriculture a sacrificial lamb

Prime Minister Jacinda Ardern. Photo / Mark Mitchell

The PM's plan is to put so much pressure on farmers that she will drive them out of business, just as occurred in the coal industry, and oil and gas.

In a speech to state sector workers and children in Melbourne, Prime Minister Jacinda Ardern described a period of economic turmoil in New Zealand: "Starting in 1984, through to the 1990s, we removed regulations that were said to hamper business, slashed subsidies, transformed the tax system, dramatically cut public spending ... "

She questioned whether the reforms were really necessary, then added, "I was a child back then, but I remember clearly how society changed. I remember nothing of Rogernomics of course — I was five. But I do remember the human face."

To explain to our Prime Minister why Labour's reforms were so necessary, we need to revisit history.

For much of its post-colonial era New Zealand was a lucrative source of primary produce for Mother England. With prices set by inter-governmental agreement, our economy was well supported, but highly regulated.

To protect the dairy industry, a doctor's certificate was needed to buy margarine. To protect the wool industry, nylon carpets were banned. Even the railways were protected, with trucks prohibited from carrying freight more than 30 miles.

Everything changed in 1973 when Britain joined the European Economic Community. Our economic difficulties were compounded by the 1974 oil shock. Living standards fell dramatically, from third in the OECD in 1953 to 22nd by 1978.

To revitalise the economy Prime Minister Robert Muldoon introduced a series of Think Big projects to make New Zealand self-sufficient in energy.

They failed to deliver the promised rewards, and their excessive costs added to the nation's woes. By 1984 New Zealand was on the brink of economic collapse, with high debt, high inflation, and high taxes.

A snap election ushered David Lange's Labour Party into power. Finance Minister Roger Douglas acted quickly to stabilise the economy, liberating businesses from state control and introducing sweeping public sector reforms.

Jacinda Ardern indicated in her speech that she understood the human side of the upheaval created by major reform, but what she and her fellow supporters of state control conveniently ignore are the benefits that flow to everyone when the free market is allowed to create wealth.

Regrettably, she and the Greens will be taking the country back down the same disastrous state interventionist route followed by Muldoon when they impose their punitive climate change agenda.

What's worse is that the PM is refusing to acknowledge the magnitude of the economic disruption she is about to inflict on the country. Ironically, she seems blind to the "human face" of rural families and communities.

While shrewd heads of government around the world talk the climate change talk but do nothing that will harm their economies, our political leaders, including the leader of the Opposition, are about to harm ours.

While their changes will not make one iota of difference to the planet, they will turn New Zealand into a sacrificial lamb to climate change.

The climate science underpinning the Zero Carbon Act is certainly not settled.

Kiwi scientists are disputing the UN's estimates that cows and sheep are responsible for generating almost half of the country's man-made greenhouse gas emissions.

That's why Jacinda Ardern's decision to go ahead and impose draconian restrictions on agricultural emissions — in spite of this uncertainty — is so disturbing.

The Prime Minister is now on a crusade to reduce stock numbers, even though livestock farmers are the backbone of New Zealand's export sector, and are crucial to the country's economic wellbeing.

The PM's plan is to put so much pressure on farmers that she will drive them out of business, just as occurred in the coal industry, and oil and gas. So exactly how is she doing that? Here are five ways.

Firstly she is requiring a dramatic cut in methane emissions of up to 47 per cent by 2050, but is prohibiting farmers from being able to plant trees to offset their livestock emissions, even though other sectors can use forestry. The only option left to farmers will be to cut livestock numbers.

Secondly, because the Prime Minister wants New Zealand to be a role model for other countries, she has legislated for the harsher 1.5 degree Paris target instead of the more relaxed 2 degree target.

This means Kiwi farmers — and other exporters — will face tougher restrictions and higher compliance costs than their competitors, who may face no such charges at all.

The estimated cost of compliance for sheep and beef farmers is as high as 123 per cent of nett profit for an average farm, while dairy farmers could see profits cut by up to 60 per cent.

Thirdly, forcing farmers to meet the first of their emissions reduction targets in 10 years' time, while everyone else has 30 years, denies them two decades of technological advancement that could help them to fulfil their requirements in a cost-neutral way.

Fourthly, the Government's proposal to subsidise imported electric and hybrid vehicles by up to $8000, funded through a tax of up to $3000 on vehicles with higher greenhouse gas emissions, is yet another hit on farmers.

And finally, the Green Party wants the government to set a five-year time limit to clean up the country's waterways, and Environment Minister David Parker appears to agree.

He is expected to release revised environmental standards for freshwater soon. But forcing farmers to deal with the new water quality restrictions could well be the straw that breaks the camel's back.

The Prime Minister's strategy of pressurising farmers is working.

Already there are reports of increasing numbers of farmers selling their farms for other uses, including forestry, leading to growing concerns about the downstream effects on rural communities.

In fact, we could be witnessing the beginning of the decline of this country's crucial dairy, meat and wool export base, that generations of Kiwi farmers struggled to build into the global leader it is today.