Much has been made of the introduction of the ETS scheme to farming and the cost to the industry. While it is true that animals produce methane and carbon dioxide what is never mentioned is that farms grow grass. The grass is the same as growing trees, grass sequesters or absorbs carbon dioxide from the atmosphere.
There are about 157 million stock units on our farms each eating about 2kg of feed per day. The total amount of feed that is grass, grain and fodder crops grown is 114 million tonnes of dry matter a year. Each kilogram of dry matter contains about 50% carbon so the grass grown on farms each year sequesters 57 million tonnes of carbon. With a current carbon price of $30.00 per tonne farmers are earning over a billion dollars a year in carbon credits.
Animals eat the grass and return some of it to the atmosphere as methane, and carbon dioxide. This gas gets absorbs back into the grass as it grows. The grass also gets absorbed into the bodies of the animals that eat it as they grow. The carbon gets released when we eat the meat from the animals or drink the milk, eat cheese or eat other products produced by the dairy industry.
If we consumed all the dairy production in New Zealand then our dairy industry would be carbon neutral, farmers would not owe the Government anything, the Government would not owe farmers anything, but most of the food we produce on our farms is exported. When we export coal we do not pay for the carbon liability on the coal, the country that burns it incurs the penalty. When we export food the same rules apply, we export the carbon liability and those that consume the food overseas incur the liability. Our farmers are responsible for their net carbon emissions.
Farmers are due the credits for growing the grass, and we as New Zealanders incur the liability for the food consumed here. If you eat food you should pay the carbon liability. You release the carbon back into the atmosphere. The fact that you excrete carbon in a number of ways, that’s your problem, not the farmers.
Let’s be mean to farmers and make them pay the carbon liability for the food you consume and the carbon you excrete. This is unfair but let’s do the calculations on this basis.
The balance sheet for the dairy industry and milk production looks like this, the industry produces about 21 million tonnes of milk a year or about 1.5 million tonnes of carbon. Ninety five percent of the milk we produce is exported, 1.4 million tonnes of carbon is exported.
At $30.00 per tonne the New Zealand Government owes dairy farmers forty two million dollars a year. The reason for this, the net amount of carbon that is sequestered on our dairy farms by the grass grown, exceeds the amount of carbon released by the dairy industry here. At the worst the dairy industry is carbon neutral. When we take exports into consideration. Our dairy farmers generate carbon credits for the country.
New Zealand dairy farmers are reducing New Zealand’s nett carbon emissions by $42 million dollars a year. New Zealand’s agricultural and horticultural industries are reducing our carbon liability by about twice that figure. Both irrigation and dairy have other benefits.
Irrigation and dairy have the ability to reduce atmospheric carbon, that is to sequester carbon compared to traditional dry land sheep farming. An irrigated dairy farm has about 2500kg of dry matter a hectare in the grass, or 1250 kg of carbon tied up in pasture dry matter. A typical dryland sheep farm less than half this.
A typical irrigated dairy farm of say 400ha will sequester at least an extra 250 tonnes of carbon compared to a dryland sheep farm. These figures do not include the extra organic matter will build up in the soil on the dairy farm. Both irrigation and dairying can have significant beneficial effects on atmospheric carbon dioxide levels.
Our farming industry is reducing New Zealand’s greenhouse gas emissions not adding to them. The Government should be compensating farmers for the credits they are creating for not talking of taxing them.