Emissions trading erodes farming profits

The nation's biggest farmer – state-owned Landcorp – says farmers shouldn't be asked to pay for methane and nitrous oxide emissions from their properties before 2013.

"None of New Zealand's international pastoral farming competitors so far. . . face this problem, at least in the foreseeable future," former agriculture minister Jim Sutton, now the chairman of Landcorp, told MPs today.

Landcorp's chief executive, Chris Kelly, told Parliament's finance select committee that the Government's proposed emissions trading scheme could cost reduce the company's net profit by between 25 per cent and 50 per cent in 2013, and by 75 per cent by 2030.

The impact on the wider pastoral farming sector would be huge, he said. In answer to MPs' questions, he said accelerating agriculture's entry into the scheme to this year would have a "catastrophic effect".

Mr Kelly said the point of obligation – the part of the farming pipeline where emissions would have to be accounted for – should be individual farmers, rather than the proposed fertiliser suppliers and dairy and meat processors. This would encourage behaviour change on-farm.