Hodgson could ease methane tax

By LIAM DANN primary industries editor

The farming sector and Government may have found a solution to their standoff over the "flatulence tax".

Environment Minister Pete Hodgson has agreed to consider a new report into how much methane emission research is being done in the agricultural sector before he imposes the controversial levy to fund new research.

This could result in a big reduction to the $8.4 million the industry was expected to pay and may mean no new levy on farmers.

The minister's spokesman Graeme Speden said this was not a backdown.

The Government would stand firm on the scale of research it wanted and the fact that it must be funded by the industry.

"The Government's not wedded to the $8.4 million. That was the advice we had. If they can improve on that and get it done for less, then that's okay."

The research still had to cover all the bases outlined by Dr Peter O'Hara in the initial report that recommended the levy, said Mr Speden.

Since the levy was announced in June, farmers have argued that work on reducing animal emissions was already being done by the Pastoral Greenhouse Gas Research Consortium, which has the backing of five key industry groups: Fonterra, Meat NZ, Wrightson, DeerResearch and AgResearch.

The consortium, which is just over a year old, has annual funding of $1.6 million - half of which comes from industry and half from the Government.

Dr O'Hara's report was put together just as the consortium was being set up last year, said consortium chairman Mark Leslie.

It did not include industry initiatives started this year, he said.

In a report to Mr Hodgson next month the consortium will outline what research it is already doing.

It will also indicate what research is going on in the wider agricultural sector that could be adapted to meet Dr O'Hara's report goals.

It would then be a case of identifying the gaps and looking at what was still needed to be delivered, Mr Leslie said.

"Instead of it costing $500,000 to set up a farm systems trial, maybe it's $50,000 or $100,000 to just do the methane measurements on an existing trial," he said.

There was a possibility that if there was enough synergy with existing research, then the industry might be able to meet the Government's demands without any extra levy on farmers, he said.

Mr Hodgson will take advice from Dr O'Hara and MAF officials before making any decision on the new report.

This did represent a possible solution, said Federated Farmers president Tom Lambie.

The federation's expectation was that enough research was already being done.

"This is progress," he said.