Fonterra says it has reservations about the government's approach to pricing on-farm emissions.
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Last week the government released a consultation document on how on-farm emissions could be paid for.

It was largely based on the idea of a split-gas farm-level levy put forward by industry partnership He Waka Eke Noa.

But there were some changes to sequestration options – much to the anger of industry groups.

In an email to shareholders, Fonterra chair Peter McBride said the government’s changes created an imbalance within the sector that needed to be addressed during consultation.

“Like DairyNZ, we have reservations about the government’s current approach to the levy price setting process, governance, and sequestration accounting, we will be seeking changes on these issues and working with DairyNZ to support farmers to engage in the process.

“It’s important that the final package works for the primary sector as a collective, so all voices need to be heard during the consultation process over the next six weeks.”

McBride said Fonterra supported the split gas farm-level levy as it enabled farmers to directly benefit from decisions they made on-farm.

Doing nothing was not an option, he said.

“Globally, our customers want to understand the emissions profile of the dairy products they buy, yes, we are already one of the most emissions-efficient producers of dairy in the world. But we need to work hard and be innovative just to maintain this valuable advantage.”

He encouraged farmers to take part in a series of meetings on the emissions pricing scheme being held by DairyNZ in the coming weeks.

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