Opinion: In recent weeks Irish and Dutch farmers have cranked up their protests against their governments’ climate policies. Meanwhile, the OECD has released its annual assessment of each member country’s agricultural performance.

Taken together, these offer some insights into the challenges and opportunities for New Zealand’s farmers on climate, profitability and productivity.

The governments in Dublin and the Hague are bound by the European Union’s climate commitments agreed by all member governments. They are among the strongest made by nations under the Paris Agreement.

For example, the EU has committed to a 55 percent reduction in greenhouse gases by 2030 from 1990 levels; and to achieving net zero on all gases by 2050, including methane and nitrous oxide from agriculture.

Yet, Climate Action Tracker, an authoritative association of scientists, deems the EU’s goals and policies only “almost sufficient”. They would not meet the 1.5C global goal on climate; the outcome would be towards 2C.

In contrast, New Zealand’s commitment is less demanding than the EU’s, particularly on methane. Our goal on that gas is around a 10 percent cut by 2030 and a cut of 24 to 47 percent by 2050. Climate Action Tracker judges New Zealand’s targets “insufficient” and our plans and actions “highly insufficient.”

The Irish and Dutch governments face big challenges to meet the EU’s climate targets, particularly in their agricultural sectors which contribute sizable shares to their national economies.

Ireland has the second-highest GHG emissions per capita in the EU; and its agricultural sector is Ireland’s largest emitter, accounting for 37.5 percent of greenhouse gases (compared with New Zealand ag’s 49 percent share of our emissions). Ireland’s cow numbers have increased for 11 consecutive years, with its dairying boom accelerating after the EU ended milk quotas in 2015.

Irish greenhouse gas emissions by sector (2021)

The political parties forming Dublin’s coalition government negotiated long and hard before agreeing their recently announced 2030 sector emission targets. They range from cuts of 25 percent for agriculture and 35 percent for industry to 40 percent for residential building, 50 percent for transport and 75 percent for electricity.

Farmers had braced for a cut of 22 percent, the lower end of earlier estimates. But they were angry about the final figure. Tim Cullinan, president of the Irish Farmers’ Association said the cut was “a massive, massive ask” that could cost farmers 2 billion euros ($3 billion) a year; and the government had no budget or plans to help them adjust. Pat McCormack, president of the Irish Creamery Milk Suppliers’ Association, said the cuts would make “whole classes of farms unviable” and would push up prices.

In the Netherlands, it’s nitrogen emissions that are causing the latest uproar among farmers after the government announced its goals to halve those emissions by 2030. Some 40 percent come from farming so the government is willing to buy out farmers to reduce animal numbers by one-third.

The rules apply across all animals. By far the biggest problem is nitrates in soil and water, particularly from pig farming near urban areas. For some years, the government has been buying out such pig farms to reduce levels of ammonia and noise.

The action was prompted by the country’s supreme court ruling in 2019 that no more permits to emit nitrogen could be issued because the country had breached EU nature protection laws. Large housing and commercial projects have long waits, since their permit depends on emissions cuts elsewhere.

While some progressive farmers have shown they can meet such tough limits by investing in new technology and improved farming systems, a large majority of farmers are angry about the proposals and protests have disrupted traffic in many places around the country.

The latest OECD analysis is revealing on these farming issues. On climate emissions, our farmers are the 6th most GHG intensive among in the OECD based on emissions per US dollar of production value; and the 9th most intensive per hectare.

Emissions intensity of agriculture output and land

Source: OECD

In contrast, our dairy and meat producers say they are the lowest emitters in the world in terms of kg of milk solids or meat. But the OECD’s economically focused measures show how vulnerable our farmers could be to adverse consumer responses as their demands for climate actions rise.

Our nitrate story is more damning. A nitrogen balance above zero kg per hectare shows the farming system is generating more nitrogen than the land can absorb, thus becoming a pollutant of land, water and air. The New Zealand figure has risen from 36.7 kg/ha in 2000 to 66 kg in 2020. In sharp contrast, the EU has reduced its nitrogen balance from 68.4 kg to 48.9 kg. In other words, we’ve become worse offenders than the EU.

Our economic analysis is unflattering too. Over the past 20 years, agriculture’s share of our GDP has declined by a quarter, from 8.3 percent to 6.2 percent; its share of employment has fallen by a similar margin; and its share of exports has risen but so have our imports of food.

Agriculture’s share of energy use has risen from 3.5 percent to 4.3 percent; and its share of water abstractions has soared to 61.7 percent, pushing our “water stress indicator” from 0.7 to 2.2.

It’s the OECD economic and environmental analysis that should be the real wake up call for our farmers. It shows they have maxed out their current farming systems and business models on both accounts.

Many of those economic and environmental trends run contrary to the performance of farming in the EU and in the OECD.

Most concerning of all, our agricultural sector only achieved gains in productivity averaging only 0.8 percent a year 2010-19, down from 3.3 percent 1990-2009. By comparison the EU’s remained consistent at 1 percent a year, while the OECD’s average eased from 1.7 percent to 1.4 percent.

So, recent events in Ireland and the Netherlands remind us that there, like here, it remains immensely challenging to get farmers to face up to their environmental and climate responsibilities. Even when their governments are pledging money and other help to encourage them to do better.

Moreover, don’t be complacent about the broad support for the climate recommendations of the He Waka Eke Noa process between the farming sector and government. They propose very minor cuts in emissions; they hinge on hefty financial support and rewards; and yet they still anger a minority of farmers.

But it’s the OECD economic and environmental analysis that should be the real wake up call for our farmers. It shows they have maxed out their current farming systems and business models on both accounts.

If they want to prosper in resilient and enduring ways, they need new models. Their best bet is to play their crucial role in helping us solve our climate crisis. It is the greatest business opportunity they will ever have.

Rod Oram is a weekly columnist who covers climate, economics and politics.

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