Impeding food production with taxes on emissions is a bad idea when the world is tipping towards mass hunger

As the war in  the Ukraine drags  on, the  international   food  crisis  is  deepening. The  Economist put it  simply but grimly:

“The war is tipping a  fragile  world towards  mass  hunger. Fixing that is  everyone’s  business”.  

So  shouldn’t  the  New Zealand Government   be  exhorting  farmers to  go  all out to produce  as  much  as  they  can   for  this  country  to be  lifting  its  food  exports?  Is   this  the  time   for  the  government  to be erecting  new  hurdles to impede the  production  of  food?  Shouldn’t  it  delay  the  plan  to tax methane emissions for  at  least  12  months? 

Let’s look  at what  The  Economist further said:

“The  war is  battering a  global food  system weakened   by  Covid-19, climate  change,  and  an energy  shock.  Ukraine’s exports of grain and oilseeds have mostly stopped and Russia’s are threatened.

“Together, the two countries supply 12% of traded calories. Wheat prices, up 53% since the start of the year, jumped a further 6% on May 16th, after India said it would suspend exports because of an alarming heatwave.   

“The widely accepted idea of a cost-of-living crisis does not begin to capture the gravity of what may lie ahead. António Guterres, the UN Secretary General, warned on May 18th that the coming months threaten ‘the spectre of a global food shortage’. The  high cost  staple foods has already raised the number of people who cannot be sure of getting enough to eat by 440m, to 1.6bn.

“Nearly 250m are on the brink of famine. If, as is likely, the war drags on and supplies from Russia and Ukraine are limited, hundreds of millions more people could fall into poverty. Political unrest will spread, children will be stunted and people will starve.”

 ANZ Bank  economist Susan Kilsby, in her recent edition of the  bank’s Agri-focus, said global food prices continue to strengthen as shortages loom for basic foods such as grains.

“This means there will also be a shortage of carbohydrates to feed livestock. This won’t directly impact New Zealand food production systems, but it will impact our competitors who rely on grain to produce beef and milk. At the same time, the price of growing pasture has also gone up, as global fertiliser costs have soared.”

The shortages of those basic feed stocks would underpin global production costs and keep production in check, but it would also erode the ability of poorer countries to import the higher-value foods that New Zealand exports, Kilbsy said.

The recent lockdowns in China had disrupted supply chains and impacted demand for some of the food products we export to China.

They also were having a significant impact on the economies of many other Asian nations.

“China plans to increase fiscal spending to offset some of the impacts of the lockdowns, but the direct impact of the disruptions to supply chains will be felt even harder in many other Asian nations.

“The quantity of New Zealand’s meat, dairy and horticultural goods available for export globally has been impacted by either detrimental weather or labour shortages.”

Kilsby noted that He Waka Eke Noa has delivered its recommendations for pricing agricultural emissions and the Government is expected to formally adopt these recommendations in December.

“Methane emissions pricing is expected to have a larger impact on deer, sheep and beef farms than dairy farms.”  

Point  of  Order  notes  that the  government  has  been  silent  on  these  issues  (admittedly Agricultural Minister Damien  O’Connor  has  been on  missions  abroad).

But  surely   this  is time for  it to  take  the  lead  in   striving to  expand  the country’s food  production  and  exports to feed a world which The Economist says is headed for mass hunger.

5 thoughts on “Impeding food production with taxes on emissions is a bad idea when the world is tipping towards mass hunger

  1. I never trust bank economists. There is very unlikely chance of food shortages. There is a very high probability that there will be a financial crisis, mortgage rates in the States for housing are above %6 more than double the rate before Christmas. If there really is a food crisis the the USA and Brazil will halt their ethanol production, which in the USA is %30 of corn production. I farm and I can see a crisis over emission targets, they will collapse production and what then replaces lost export income?

    Liked by 1 person

  2. The world needs more carbon dioxide (mot less) so that the earth can grow more green crops. If James Shaw and the Greens had learned even a little science at school they would have heard of and perhaps understood photosynthesis. At a time where we are facing food shortages on a very large scale, it is the peak of ignorance and stupidity to be spending a first tranche of budget allocation to try and minimise carbon dioxide from the planet. But, what can you expect from a ideological government that lacks education, never mind commonsense

    Liked by 1 person

  3. Having stuffed our energy security on a whim, is Ardern now seriously proposing to wreck our food security and our main export earner as well? Her international brand is becoming very expensive to maintain.

    Like

  4. … from the 2015 Paris Agreement – Article 2 1b states we should be reducing emissions in a manner that does not threaten food production

    Article 2
    1. This Agreement, in enhancing the implementation of the Convention,
    including its objective, aims to strengthen the global response to the threat of
    climate change, in the context of sustainable development and efforts to eradicate
    poverty, including by :

    (b) Increasing the ability to adapt to the adverse impacts of climate
    change and foster climate resilience and low greenhouse gas emissions
    development, in a manner that does not threaten food production;

    Liked by 2 people

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