Opinion: Farming in New Zealand is under threat and overlooking the cost of fuel on-farm is yet another pressure, Dr Jacqueline Rowarth writes.
The reality of trying to reduce greenhouse gas emissions (GHG) was made startlingly clear this month.
When the price at the pump went up, the government announced a cut in fuel excise duties to allow people to continue life as usual.
The cut was an acknowledgment of the effect of fuel on the cost of living, which is part of the reason so many countries support fossil fuel subsidies.
Trillions of dollars are expended by governments globally on subsidies to producers (to avoid unemployment and triggering inflation and a depression) and consumers (to keep prices affordable).
The International Energy Agency and OECD has estimated that 52 advanced and emerging economies (representing about 90 per cent of global fossil-fuel supplies) gave subsidies worth an average of US$555 billion each year from 2017 to 2019.
But fossil fuel emissions make a significant contribution to greenhouse gases.
Road transport globally has been estimated as contributing 11.9 per cent of GHG, with other forms of transport (including aviation) making up another 4 per cent.
In total, energy contributes almost three-quarters of global GHG. The figure includes heating for buildings and energy used in industry.
It also includes a 5.8 per cent contribution from fugitive emissions – gas leaks from fossil fuel extraction, the bulk of which could be reduced with technologies that are already available.
The United Nation's methane report suggested not only that capturing the emissions would be relatively easy, but also that doing so would be low or neutral cost. It would seem a no-brainer but is taking time to achieve.
Subsidies help to make fuel affordable for everyday life.
The same rationale was applied in New Zealand this month for road users, but on-farm use was overlooked.
The farmers and contractors who have been trying to continue their work through Covid shutdowns and desperate labour shortages were forgotten.
Recently David Clark, arable farmer and Canterbury provincial president of Federated Farmers of New Zealand, circulated a picture of his 2021 Case 9250 combine harvester ready for a day of work harvesting milling wheat.
As the 700hp engine burns through 120 litres of fuel per hour, it cost Clark $4000 to get through one day of harvest.
Last year the tank fill cost $1700.
"The combine does not run on unicorn farts or the tears of a Swedish teenager", he wrote.
"It runs on fossil fuel to harvest the food you eat."
As yet there is no energy technology to replace fossil fuel that can support agricultural machinery to do the work that allows the efficiencies that means food is affordable.
The costs of that food production are escalating so rapidly, that farmers are questioning the viability of their businesses.
Clark is clear that the price of food is going to have to increase significantly to cover exponential increases in production costs.
He also points out that although the war in Ukraine has brought forward the increase in fuel costs and related production costs, Government policy here in New Zealand (the Emissions Trading Scheme (ETS), environmental taxes and legislation) was going to bring about these production cost increases anyway.
The media has already highlighted the fact that many market gardeners are wondering about their future because costs are exceeding income and labour supply is short.
The labour concerns have also been stressed for dairy farms – the shortfall being "covered" by long hours and repairs and maintenance jobs being postponed.
Media has also showcased concerns about land being sold for carbon farming because income from the ETS exceeds that which can be gained from farming for food.
Record prices for meat and milk do not mean record profits, and cost of living increases hit farming families just as they do urban families.
Farming in New Zealand is under threat and overlooking the cost of fuel on-farm is yet another straw.
There have certainly been suggestions that a change in the way that farmers operate would allow them to remain in business, but none of the suggestions, whether organic, regenerative, veganism or synthetics (vat fermentation) get away from the use of fossil fuel – usually more than is required by pasture-based agriculture and resulting in food at a greater price to the consumer.
There are no easy answers.
Removing fossil fuel subsidies would make people rethink their requirement for travel, their methods for heating and cooling of buildings, and their desire for "stuff".
The removal could reduce global emissions by up to 10 per cent by 2030.
The United Nations Emissions Gap Report 2018 estimated that the largest effect would occur in the Middle East and North Africa. New Zealand was not mentioned.
Listen to Jamie Mackay interview Dr Jacqueline Rowarth on The Country below:
New Zealand agriculture contributes less than 0.1 per cent to global emissions, and New Zealand farmers are among the most efficient in the world.
On-farm fuel is not receiving the 25c relief and farmers are using the fuel for essential tasks like feeding out to animals, harvesting and establishment of new crops and pasture.
Nothing is going to stop the cost of living from increasing and replacing fossil fuel will not be cheap. But it is necessary. So is food. Farmers should never be forgotten.
- Dr Jacqueline Rowarth, Adjunct Professor Lincoln University, is a farmer-elected director of DairyNZ and Ravensdown. The analysis and conclusions above are her own. email@example.com