The New Zealand government this week announced plans to price emissions at farm level rather than bring farming into the emissions trading scheme.

NZ farmers and farm organisations have hit back at the proposals. They suggest the plans don’t include some solutions to reduce emissions at farm level, such as planting trees to improve carbon sequestration.

The government suggests farm-level pricing will give farmers more control over improvements on farm, with any funds generated recycled back into research and incentive payments to farmers. The government also suggests the plans would prevent NZ agribusinesses from offsetting farm emissions and not making any actual changes.

So while the NZ farm sector breathed a sigh of relief when the government decided to separate methane target reductions from animals from other greenhouse gases, this most recent proposal is not going down well.

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Federated Farmers president Andrew Hoggard said models using this concept show a possible reduction in net revenue of between 18% and 24% for beef and sheep farms, and falls of 6% to 7% on dairy farms.

“You can’t take out 20% of the output from a sector and not expect major impacts. Not only will processing jobs be lost, there will be all sorts of flow-on effects in rural servicing sectors,” he said.

Beef and Lamb New Zealand chair Andrew Morrison said the new proposals remove “some of our solutions or tools out of the toolbox”.

Kelly Forster, programme director of a joint farmer and government project, said it is positive that the government went with a farm-level levy because the lower the emissions, the lower the levy. However, she said several issues need discussion, including recognition of sequestration. “Actual pricing is also important.”

The government proposal is open for consultation until 18 November. The climate change and agriculture ministers will publish a report on the pricing system by the end of this year. The final proposal will go to the cabinet for approval by early 2023.