New Zealand Farmers Could Soon Pay Flatulence Tax for Livestock Under World-First Plan

A herd of cows make their way down the race to the milking shed at a dairy farm in Morrinsville, New Zealand, on April 18, 2012. Sandra Mu/Getty Images

The New Zealand government has taken on the proposal by the farming sector for a separate pricing system on greenhouse emissions, which includes paying tax on the methane produced by livestock, most notably its cows and sheep.

In June, the He Waka Eke Noa, a partnership between agriculture leaders and the government, proposed that farmers calculate individually and pay for their methane and nitrous oxide emissions rather than based on national averages.

The proposal came amid mounting criticism of the sector, which is considered the largest emitter of greenhouse gasses at half of New Zealand’s gross emissions—yet is exempt from the country’s emissions trading scheme (ETS).

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The government agreed with the He Waka Eke Noa proposal that the ETS was not an appropriate vehicle for farmers to reduce greenhouse gas emissions.

However, some tweaks were made to the original proposal, including that the Climate Change Commission be responsible for setting the methane price.

“The proposal aims to give New Zealand farmers control over their farming system, providing the ability to reduce costs through revenue raised from the system being recycled back to farmers, which will fund further research, tools and technology, and incentives to reduce emissions,” Prime Minister Jacinda Ardern said.

She claimed the world-first scheme would allow New Zealand farmers to gain a premium for being “climate-friendly” products as well as boost export earnings.

“No other country in the world has yet developed a system for pricing and reducing agricultural emissions, so our farmers are set to benefit from being first movers,” Ardern said.

NZ Prime Minister Jacinda Ardern speaks during a press conference in Sydney, Australia, on July 8, 2022. Lisa Maree Williams/Getty Images

The pricing system is designed with the intent that revenue raised from the “flatulent” tax will go back into the agriculture sector in the form of sequestration investment, transition support, and sustainability research.

Reactions Towards the New Pricing Scheme

Beef and Lamb NZ (B+LNZ), a leading partner of He Waka Eke Noa, said in an email to farmers that the separate pricing scheme meant the industry would not be joining the ETS.

“The government has agreed to many of the He Waka Eke Noa proposals, but it has put forward some changes which we believe will impact sheep and beef farmers and are not acceptable,” it said in the email.

“B+LNZ and other partners are not happy with these changes and will push for better outcomes as part of the consultation.”

Andrew Hoggard, national president of the rural advocacy group Federated Farmers, said the greenhouse reduction plan would “rip out the guts out of small-town New Zealand.”

He also highlighted that, according to the government’s own calculations, New Zealand would need to reduce sheep and beef farming by 20 percent and dairy farming by five percent to achieve its national greenhouse gas targets.

“This is the equivalent of the entire wine industry and half of the seafood being wiped out,” he said.

“What happened to the ‘historic partnership?’ Federated Farmers is deeply unimpressed with the government’s take on the He Waka Eke Noa proposal and is concerned for our members’ futures.”

Opposition leader Christopher Luxon said that while the National party acknowledged the need to reduce agriculture emissions, reducing one-fifth of sheep and beef farming by 2030 was “really disturbing.”

“What we’ve said is we would support introducing agricultural pricing,” Luxon told Radio NZ.

“The question of how you do that is really important. You have to pace that with the technological advances that are coming and then synch it up with that.”

National’s agriculture spokesperson Barbara Kuriger said falls in sheep production in New Zealand could lead to higher global emissions through moving production overseas where there are fewer greenhouse emissions regulations.

Industry consultations will end on Nov. 18.