The Productivity Commission, which provides advice to New Zealand’s Government on improving productivity, has published a final report on the low-emission economy. It endorsed a split gas approach for long-term and short-term greenhouse gas emissions. However, B+LNZ said it disagreed with some of the economic modelling assumptions, and the pathways identified to get to carbon zero in relation to sheep and beef farmers.
It said that several of the Commission’s conclusions relating to the profitability of sheep and beef farms, land use, and carbon offsets simply did not match up to the realities in the sector.
“With inflation-adjusted average sheep and beef farm profitability having nearly doubled since 1990, and with 2018-19 looking like the fifth best year for profit for the average sheep and beef farm since deregulation, the Productivity Commission’s description of sheep and beef farming as ‘marginal’ simply doesn’t add up,” said B+LNZ’s chief insight officer Jeremy Baker.
Along with issues in the Productivity Commission’s understanding of the profitability of sheep and beef farms, B+LNZ said the Commission had also made an error in assuming sheep and beef livestock numbers would continue to contract.
B+LNZ said it expected livestock numbers to remain relatively static as farmers looked for more efficiency gains from the same number of animals.
Since 1990, sheep numbers have reduced by 50% and beef cattle numbers by 23%, with the sector reducing its carbon emissions by over 30% on 1990 levels, said B+LNZ.
There have been major productivity improvements, which have seen the volume of sheep meat production remain at similar levels and the value of exports double, argued the organisation.
It said the Commission had failed to account for the existing contribution made by sheep and beef farmers to climate change mitigation and the fact that the sector had set a target of being carbon-neutral by 2050.
“We absolutely accept that there is more scope on sheep and beef farms for additional planting of native and exotic forestry, but this needs to be driven by accurate economic information, so that farmers can be confident in the investment decisions they’re making on their land,” said Baker.
“With the sheep and beef sector directly and indirectly supporting the jobs of 80,000 New Zealanders, generating some $7.5 billion in exports for New Zealand, and representing 3.2% of New Zealand’s GDP, it’s vital that these decisions are informed by accurate information.”