If the new Centre for Climate Action on Agricultural Emissions elevates its mission to farm systems change it will make good on its name. But if it remains focused on near term, targeted interventions it will waste a lot of precious money and time perpetuating our existing, inadequate farming systems. Then we would cease to be farming leaders.
Speedier reductions of agricultural climate emissions came a step closer last week when six agribusinesses signed an investment memorandum of understanding with the government. But a great deal more work is required – and fast – by the private and public sectors to create the necessary structures and strategies, programmes and funding to start making meaningful cuts in emissions.
The six agribusinesses – ANZCO Foods, Fonterra, Ngāi Tahu Holdings, Ravensdown, Silver Fern Farms and Synlait – agreed to form an investment joint venture with the government. The initial funding is $43 million a year for four years, half from the government and half from the businesses.
To set that in perspective, the government and private sector have invested some $200m over the past decade on such ag emissions research, with much of the money coming from government. That was a rate of $20m a year. While a lot was learnt, little has been operationalised yet.
The new initiative doubles the spending rate; and there are also other existing and new programmes and investments by both business and government. But still the sums are minuscule relative to the $30 billion or so of annual exports of dairy and meat products.
Moreover, those exports are facing growing consumer awareness of climate issues triggered by farming and food, increasing competition from other foods which are more climate compatible, and also from food companies such as Nestlé that have made far bigger commitments to and investment in climate action than any food producer here.
And here’s the acid test on climate economics. Our ag sector produces almost half our nation’s greenhouse gases each year, most of them being highly potent methane. That’s 40 million tonnes of gases a year on a CO2 equivalent basis. The memorandum investment will work out at about 50c per tonne per year from the agribusinesses and 50c per tonne from taxpayers via the government. Yet, the current cost of carbon in the Emissions Trading Scheme is $80 a tonne.
The business-government investment joint venture will form one part of the new Centre for Climate Action on Agricultural Emissions. The other part will be a revamped and enhanced New Zealand Agricultural Greenhouse Gas Research Centre, which the Key government set up after COP15, the UN’s climate negotiations in Copenhagen in 2009. The government proposed at that COP a global alliance on such research, which was established and continues to flourish.
The Centre has taught us a lot about ruminant animals and their emissions. Its continuing research will reveal a lot more. But there is a far bigger game changer – development of radically better farming systems. We’re doing far too little work on that in New Zealand. More on that crucial topic later in this column.
The idea for our new Centre for Climate Action seems to have had two parents:
► Agribusiness members of the Sustainable Business Council, which proposed such a new entity in its submission earlier this year on the government’s Emissions Reduction Plan, which was launched in May.
► Agricultural Minister Damien O’Connor and the Ministry for Primary Industries. He fronted a pre-budget Cabinet paper in April that laid out a detailed programme for upping climate action and investment in the primary sector, including such a centre.
The 2022 government budget subsequently allocated $338.7m in funding for the next four years to strengthen research and development in new tools and technologies to reduce on-farm emissions. This includes the money the government is investing in the new joint venture.
While lots of government effort is going into establishing the new centre, it remains skeletal, a senior Primary Industries official explained to me in an interview this week. The joint venture will likely be set up as a commercial entity, with a board, chair and executive director likely appointed before Christmas. Meanwhile discussions on an enhanced national ag gas research centre are only at a very preliminary stage. After that, comes development of goals and strategies.
Quite how the two entities will work together within the new centre is likewise a subject still in the early stages of debate. For example, the Agricultural Greenhouse Gas Research Centre, the existing ag gas research centre, has a complicated governance structure with 10 representatives from the likes of Crown research institutes, two ministries, a farming sector funder and a “stakeholder advisory group”. The enhanced research centre will likely have a similarly complex one, as will the investment joint venture.
While the two halves of the new Ag Climate Centre will likely devise and own their separate strategies, above them, at the peak of the new Centre, will sit an “oversight board” to co-ordinate both. The Ministry for Primary Industries is planning to announce the structure and members of that too by Christmas. So, even more stakeholder and governance complexity.
But the great unknowns about the new Centre go far deeper than its structure and governance. Here are two of the crucial ones:
► What will the joint-venture invest in? Its remit is broadly described as focusing on existing and near-term emission reduction technologies; finding ways to speed up their development to make them suitable for New Zealand farms; and encouraging their wide take up by farmers.
The Sustainable Business Council says its ag members have identified a number of such technology opportunities but declined to name them. The obvious one often mentioned, though, is Bovaer, a feed additive developed by DSM, a Dutch multinational, which reduces ruminant animals’ methane production. It’s already approved for use in a few countries but still require a lot of adapting to make it practical to use in New Zealand pastoral farming.
But why would the six agribusinesses in the new Ag Climate Centre’s joint venture direct their investment into the likes of such adaptation research and trials? If they prove successful, then DSM could simply sell its product to all NZ farmers of ruminant animals with no benefit to the six investors beyond their own use of the additive.
Similarly, Fonterra is very keen on what it calls Kowbucha for reducing methane. It says: “We have one of the world’s largest dairy culture collections to call on. We’re using some of these cultures to create new fermentations we’re calling Kowbucha, which could potentially switch off the bad bugs that create the methane in cows.”
Fonterra is keeping very quiet on its Kowbucha progress. Possibly, the joint venture’s collective investment could speed up its development, with Fonterra benefitting from it if it becomes a commercial product. Yet, the joint venture seems likely an excessively complex and bureaucratic way to achieve that.
Aside from a few candidates likes these, there is no range of potential near term reducers of methane out here, one senior dairy industry sustainability expert told me this week.
► How will the Ag Climate Centre speed up improvements in farming systems? The likes of methane inhibitors will help solve specific problems with existing systems but they won’t deliver multiple co-benefits, or system change. Yet, innovative farming systems do both. The best example are regenerative farming methods which reduce emissions, while improving soil fertility, animal health and biodiversity.
Synlait Milk, one of the six partners in the Centre’s joint venture, is the NZ dairy company most ambitious on climate. Its core target is a 30 percent cut in emissions per kilogram of milk solids, by FY28 from a FY20 base year. A carbon intensity target is crucial. It allows Synlait farmers to increase their milk production if they reduce the emissions from them.
Synlait’s on-farm emissions intensity fell 5 percent over the past year, and by 10 percent compared to its FY18 base year when it set its targets. It’s achieved this by working with farmers to develop a range of some 50 actions they can choose from to increase the efficiency of their farms while reducing their emissions.
And its off-farm emissions are down 24 percent from its FY18 base level. Its goal for these is a 45 percent reduction in absolute terms by FY28 from a FY20 base year, despite a sizable increase in production. Synlait says it can make more progress with its current best practices, but it will need more technology and tools to go beyond that in years to come.
Regenerative farming practices look the most promising for big systems change. For example, Nestlé, the world’s largest food producer, has committed to investing US$1.2 billion in regen ag by 2025 and buying 14 million tonnes of ingredients produced from regen farmers by 2030.
As it happens, the government announced last month a $26m study into the benefits of such practices in pastoral farming. “The new Whenua Haumanu programme will study the whole pastoral farming system from field to fork,” Agriculture Minister O’Connor said when announcing it. “It will scientifically build a picture that includes soil biodiversity, pasture performance, animal production and welfare, and the quality of the food produced.”
Massey University’s School of Agriculture and Environment will lead the programme. Participants will include AgResearch, Lincoln University, and Dairy Trust Taranaki.
Regenerative practices are a cornerstone of the sustainability and value generation goals in the Fit for a Better World roadmap. Based on Te Taiao principles, it was devised by the food and fibre sector and the government and launched in July 2020.
If the new Centre for Climate Action on Agricultural Emissions elevates its mission to farm systems change it will make good on its name. But if it remains focused on near term, targeted interventions it would waste a lot of precious money and time perpetuating our existing, inadequate farming systems. Then we would cease to be farming leaders.
