Simon Shepherd: The government says its agreement with farmers, that they should pay for agricultural emissions, is historic. But there's no agreement on how. One proposal says farmers should pay a 5 per cent emissions tax. Another suggests farmers themselves design the new pricing scheme. Agricultural emissions are the largest contributor to greenhouse gas emissions in New Zealand. Damien O’Connor, Minister for Agriculture and Biosecurity, among other things, joins me now from Nelson. Good morning, Minister, thanks for your time.

Damien O’Connor: Good morning, Simon.
Going to talk emissions in a moment, but first, this wide-ranging review of the biosecurity act. Does this mean that our border control is failing us?

No, it doesn’t, but the act is 26 years old. A lot has changed in that time. There have been occasional reviews and updates, but it’s time for a major overhaul. We’ll look at the act in two parts — we’ll look at the acute issues like compensation, like on-farm practice, to make sure that the act gives the right guidelines, the right requirements for people on the ground. Then we’ll look at the wider issues of policy — how we do pest management, national pest management plans. So it’s a two stage review of an act that is 26 years old.
All right, well, we’ve had a lot of incursions — stink bugs, fruit fly, myrtle rust, Mycoplasma bovis. In fact, a fruit fly discovered five days ago, but not notified to the public yesterday. Are you being transparent enough about the incursions that are happening on our border?

We’re being absolutely transparent. The reality is that we have more trade, we have more people coming in. The threat is growing all the time. Climate change offshore means that there are new pests from new locations. So, we’re keeping as up to date as we can. We’ve had to put more resource in. The fact is that the system hasn’t kept up over the last nine years of National. We’ve had increasing trade without increasing resource. So we’re playing catch-up at the moment, but this review is part of that wide-ranging oversight.
Is there a chance that our clean, green, island nation that’s good for business, good for tourism, good for reputation — is that at risk because our border security is not up to it?

No, we’re always at risk, and we do have things that come in from time to time. But our response, as we’ve seen in the fruit fly, has been rapid. We’ve been transparent, we’ve talked to our trading partners. So, generally speaking, I think we’ve got an open, transparent process. It’s always at risk; if something major comes into the country, yes, of course that could threaten our reputation. But we’re honest with our trading partners offshore. So they understand that we’re focused on this. And I guess the impacts on our own economy — that’s up to us to manage.
OK, just quickly — on the latest fruit fly find, it was found five days ago, and yet Biosecurity only notified the public yesterday. That’s five days later, is that acceptable?

Yes, it is. They’re busy on the ground trying to assess whether it’s one fly, whether there are any others. We have a lot of traps on the ground. The issue here is that, actually, normally in the winter they’d be in hibernation. Because of the warmer temperatures that we’re seeing, not only in New Zealand, but elsewhere, we’ve got different patterns of behaviour with fruit fly and many other pests and diseases. So, we have to double check that indeed it’s a fruit fly, where it’s from, and that there’s only one. So we’re trying to work out whether there’s a population here or not, and that’s something— that decision yet to be made on.
OK, because normally we see fruit fly in the headlines immediately when you find a discovery, so it’s unusual to see a delay when you actually find another one.

Look, there’s been a fruit fly incursion, we’ve had the Northcote for some time. We’ve been finding the odd fly, we’ve been notifying that as quickly as possible, and certainly our trading partners. So we’ve been trying to minimise the impact on local people. They have been very cooperative, I’d have to say, and in South Auckland as well. Look the programme is running well, as we find the fly, we’ll notify. But the objective, of course, is to find every one of them.
All right. Just quickly, are you going to increase fines at the border? At the moment it’s, like, $400 if you have an apple in your bag. Are you going to bump those up under this review to make sure that these kinds of things are being disincentivised across the border?

Look, that could be the case. But actually, we’ve got to make sure that we have proper videos, proper warnings and systems to notify people of the importance of not bringing fruit and veggies into the country, or anything that may be risk material. We’ve had a very average video played on some of the airlines. We’ve got to make sure a very good video on all the airlines is played, that we’re doing everything we can to notify people of their responsibilities before we whack them. Four hundered dollars is quite a fine, that’s not going to prevent people bringing it in if they make a genuine mistake. So we’ve got to be focussed on every area of the biosecurity system.
All right, so part of the review, as well, is that you’re going to have a look at the readiness and the response of Biosecurity and MPI. Has this been brought to light because the response to Mycoplasma bovis hasn’t been up to scratch?

M. bovis has certainly been a wakeup call. If you look at the fruit fly response, I think that’s been very, very positive — industry participants, cooperation with all stakeholders there has been very, very good. If I go back to M. bovis — clearly we’ve had mistakes and faults in the NAIT system. We haven’t had the people on the ground ready to respond to something like M. bovis. It’s a new disease, we were unaware, probably, of its potential danger, and we’re the only country in the world that’s attempting to eradicate this. Most other countries have just managed with it. That wouldn’t be an ideal scenario for the New Zealand farming system. That’s why we’ve been learning a lot as we go forward. Mistakes have been made, we have apologised. You know, and on both sides, farmers obviously don’t always provide all the information. We’re learning as we go, and I think the sense of cooperation is far greater now than it was when we started.
Sure. But what about— I mean, you’re also reviewing how compensation is paid. What does that mean? But it’s too late, isn’t it, for the people who have been affected by M. bovis and, sort of, the delayed response to it? Some people have already lost their businesses.

Um, yeah, well, some may have lost their businesses. I’m not aware of those that M. bovis has been the single factor there. Yes, it has brought a lot of pressure on people, and, you know, it’s very, very hard if you do get infected with M. bovis. Still, relative to the number of farms in New Zealand, it’s small, it’s under 200. We’re trying to work with those people. Our support systems, working with Beef and Lamb and Dairy NZ, who are our partners in this eradication programme. We’re all getting better at this, working with the Rural Support Trust to help people. It’s not perfect, but I think we made a lot of progress.
OK, can I move on to climate change now, and the proposals that we announced this week. Agriculture — you say they’re going to pay something, and this agreement is historic. But you haven’t actually agreed anything, but what’s historic about it.

Well, it’s the fact that farmers and industry leaders have finally accepted that a price on emissions is then incorporating us into the world movement to try and reduce emissions across the board. Climate change is a reality. We committed as a government in 1997 to bring agriculture into our Emissions Trading Scheme or into our climate change movement.
Well, it’s taken a long time then, hasn’t it? If you committed in 1997.

Indeed it has. And when we were last in government as Labour, we tried to bring in a carbon tax. That was rejected by farmers, they didn’t want that. So the Emissions Trading Scheme was another alternative that was bought in by us. It was then tinkered with by the last National government. It hasn’t been effective, and we’re trying to straighten out the ETS, as well as bring agriculture in.
OK. So they’re going to pay a 5 per cent tax on emissions until a proper system can be designed by 2025. Are you being too soft on our biggest emitter of greenhouse gasses?

No, look, we’ve made concessions for other industries like steel, like cement, because they are high-emitting industries. We can’t just impose the full cost on those industries. It would be un-viable. The same thing is with agriculture. Look, there’s a biological reality here that methane from cows can’t be stopped overnight. Farmers are looking at ways of mitigating, we’re working on technology, investing in science and coming up with some ideas as to how we can reduce the emissions and the waste while still maintaining the, you know, the productive capacity and the profitability of farming.
And at the same time, Greenpeace says that those kinds of 5 per cent is laughable, and in fact, the actual cost to a dairy farmer of 1c per kilo of milk solids averages out to about $1500-2000 a year. That’s hardly going to change behaviour, is it?

Look it’s a relatively low cost, but it will change behaviour, because if we can incentivise good behaviour– and farmers respond very quickly to that. They are very adaptive, in fact, more adaptive and more innovative than most other parts of our economy in many ways. So sending that signal to them, knowing that they are part of the ETS, you’ll see changing behaviour. We’ve just got to give them the tools and give them the advice to move in the right direction, and that’s what we’re working on now.
The other proposal is that it’s coming from the industry, and they’re saying they don’t want to pay anything until they come up with their own emissions pricing plan. Can you rely on the industry itself to come up with a plan to tax itself?

Well look, we've got to have the right mix of incentive and, I guess, driver. And the Interim Climate Change Committee came up with a recommendation that said we’ve got to work through some of the technical issues. In the meantime, perhaps we should have a payment at the processor level. That’s one of the two options that are out for discussion now. I favour going to a farm-based obligation, because the farmers get that signal, and they will make the changes. It doesn’t happen at a processor-level obligation, but what that would do is generate some funds that can go into more research and help farmers with the tools. So that’s the discussion that we’re going to have over the next four weeks, and I look forward to some robust discussion on those issues.
Just quickly, the National Party isn’t really in favour of this, these tools for farmers to get their emissions down. How are you going to get the National Party across the line and make sure that they don’t scrap it if they get into power next?

That is a risk, and of course what they did is they undermined the integrity of the ETS last time, which has meant that the farmers were now 10 years, effectively, behind where we should have been. And if we can get on to this earlier, then the obligations and the changes necessary are far less acute than they might be if we delay this further and further. And I think the procrastination, aided and abetted by National Party that’s had its head in the sand, it has meant it’s harder for farmers. We’ve been upfront, clear with farmers with the messages. We’ve got to get on and be an international participant in this. That enables us to trade into the high-value markets. If we don’t do this, there are more excuses for our trading partners to block access for us. And we want to keep those doors open so we can sell high-value products to high-value markets.
Okay. Agricultural Minister Damien O’Connor, thank you very much for your time this morning.

Thank you.
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