A new Shakespeare tragedy

BY DON NICOLSON

OPINION: For those of a Shakespearean bent, New Zealand's farmers to some people seem to resemble latter-day versions of Shylock from the Merchant of Venice.

The most recent claim is that farmers are ripping off more than $1billion from the taxpayer in emissions subsidies as part of the revised emissions trading scheme, or ETS.

Farmers are not enigmatic creatures like Top Gear's the Stig. We do live in houses and our businesses do consume fuel, electricity and building supplies. Like everybody else, we will be hit by emissions levies starting on July 1, 2010. But if there's a notion of subsidy around the ETS, then who exactly is subsidising whom?

Real New Zealand, being the farmers, manufacturers and tourism operators, earn 100 per cent of the hard currency that pays for teachers, doctors, medicines and services. 100 per cent of New Zealanders depend on the efforts, graft and determination of real New Zealand. That's 100 per cent pure fact.

With the ETS you have to seriously question any market that needs legislation to force participation. That's what the ETS is – an artificially created market totally dependent on international treaties and domestic legislation to work. Yet in keeping up green appearances, you can forget earlier claims that our shambles of an ETS will align with Australia's.

Federated Farmers predicted two weeks ago that the escape hatch for Aussie farmers would be opened and, sure enough, confirmation came during the weekend it had been. Its farmers are out of their ETS faster than a rat up a drainpipe. That leaves New Zealand as the only country on Earth putting emissions from the primary production of food into an ETS-type regime. Worse, the Aussies are giving their farmers the ability to claim carbon credits; in one jump their scheme has gone from being cost-negative to cost-positive.

Meanwhile, the select committee report on amending the current ETS resembles a Shakespearean tragedy. At the very least, Kiwi farmers want to be treated the same on emissions as our cousins in Australia. The fact is, we're not.

The counter-argument is well worn. Not including animal emissions, they say, is like Australia not including coal in its emerging ETS. But miners do not pay emissions for what they dig out of the ground; only on the means to get it out of the ground and for what is used domestically. Australia's taxpayers face no liability on what they export, only what is burned or used locally.

The liability for coal is transferred on to the importing country, so why is food not treated the same?

If that importing country is developing, then generally there's no liability. If that country chooses to socialise the full cost impact, as agriculture is treated in the Australia, then so will the goods being imported.

In 1985, New Zealand adopted an ETS, but it was an efficiency trading scheme whereby farmers traded poor practice for good by kicking the subsidy habit. People in exalted positions love to tell others what's good for them, and the rhetoric around the ETS is similar to that of 24 years ago. We were and are being told we will be trailblazers, beacons for the rest of the world and an example. Farmers take a dim view of the ETS because it's an efficiency transfer scheme.

New Zealand produces massively more food over the emissions generated. Yes, there was 12 per cent growth in agriculture emissions between 1990 and 2007 but that was half that of the general economy's 24 per cent. It was substantially less than the 70 per cent for energy and the 120 per cent for transport. With 94 per cent of our food exported, the prospect of producing less to see inefficient producers produce more makes one angry.

New Zealand's taxpayers are yet to wake up to the fact the ETS is a three-lettered word for tax. Kyoto and the ETS response resemble a latter-day Tulip crisis, in which value is being ascribed to something of no tangible value.

Forget the property bubble and worry about the Kyoto bubble. New Zealand is, frankly, investing too much time and energy on something other countries are not.

Remember, agriculture is rapidly reducing emissions per unit of food produced in spite of policy, not because of it.

Our legislative response is nothing less than a dog's breakfast and is why being a farmer in New Zealand feels like being Shylock. I am a farmer. Hath not a farmer eyes? If you prick us, do we not bleed? If you tickle us, do we not laugh? If you poison us, do we not die?

It's time to Act on the current emissions trading scheme and National needs to get it Dunne by starting anew. That means total repeal of the ETS, and starting with a blank piece of paper.

Our negotiating team in Copenhagen needs to deliver something dramatic. If not, and the status quo prevails, then farmers may look to take a leaf out of the French book of activism. It's not something to be relished but that's the depth of feeling. Farmers, like Shylock, are people too: the costs you face, we face. What we earn, you earn. Let's hope the Government will now have a rush of that rarest commodity, common sense.

» Don Nicolson is a Waimatua sheep farmer and president of Federated Farmers.

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