Agribusiness and trade: Emissions - MPI boss on NZ staying in the game

Ministry for Primary Industries (MPI) director general Ray Smith. Photo / Duncan Brown

New Zealand needs to win when it comes to reducing agricultural emissions to maintain our “tickets to the game” and flourish in international markets.

That’s the view of Ministry for Primary Industries (MPI) director general Ray Smith. He is excited by work underway by AgriZeroNZ, a 50-50 partnership between MPI and the private sector, to fund research to significantly reduce biogenic methane and nitrous oxide emissions.

“Their job is to get on and build a portfolio of initiatives that can correct the methane problem,” he says. “This is very much at the leading edge of government and industry.

Almost half of New Zealand’s greenhouse gas emissions come from agriculture, which makes up 75 per cent of our goods exports. Since agriculture is considered the backbone of the economy, the importance of reducing methane emissions cannot be understated, particularly as global customers are setting ambitious greenhouse gas reduction targets.

AgriZeroNZ has $165 million to invest over the next three and a half years.

“Everyone’s got money on the table. What’s really good about this is that it’s dedicated to going after the solution. The objective is to make sure New Zealand comes out first,” Smith says.

If methane emissions from the national herd can be reduced, the sector will better placed as climate change impacts start to bite this decade.

Smith says the Sustainable Business Council initially came up with a proposal to invest more in methane emissions reduction.

“I said, ‘What about a joint venture where the Government goes 50-50 with the private sector?’ and, in the course of 12 months the Government backed that.”

AgriZeroNZ is chaired by Brian Roche. The private shareholders are dairy companies Fonterra and Synlait Milk, meat processors Silver Fern Farms and ANZCO Foods, fertiliser producer Ravensdown, and rural financier Rabobank.

“Their six CEOs and myself get along,” Smith says. “We’ve been fortunate to have a meeting of the minds and people that actually built good relationships that made it possible to pull this off.”

In September, Smith travels to Ireland to look at options their dairy sector is exploring for methane emissions reduction.

“We can’t afford for Ireland to go past us and have a lower-emissions milk product. The good thing with Ireland is we have really good joint ventures with them, and this whole space. And so the relationship between our colleagues there and ourselves is very strong.”

He’ll then go to Europe for more industry discussions and China to meet Chinese counterparts.

“I’m going to use that four weeks out from the election to do quite a bit of international travel, rather than stay domestically and manage things back at home.”

Smith contends the fact that New Zealand dairy cows are grass fed gives the sector a huge premium.

“Developing the inhibitors and products that will come through this joint venture and other mechanisms to offset the methane emissions will give us a much, much longer runway.”

“I don’t think people are going to stop buying protein products because there’s too many people joining the middle class.

“There’s too much of an increase in population. It will get harder to grow things in certain places.

“But what we do need to do to secure our future is to drop that emissions profile.”

Smith is five years into his role heading up MPI. Before that, he had a challenging CEO role at Corrections and was deputy chief executive of the Ministry of Social Development’s Child, Youth and Family, an agency superseded by Oranga Tamariki.

He says the Ministry of Primary Industries role is intellectually challenging. But grappling with challenges like methane reduction is rewarding.

“This is quite profound. Of all the things I would have got done in my working life, I think this might have the longest benefit.