A timely climate change report provides practical steps farmers can take to engage with challenges of physical changes we feel already and regulatory responses to them. Phil Edwards reports.

A report published at the end of last year alerting farmers to the coming demands on them to manage climate change risks is encouragingly unemotive, and not by any means a call to panic. But it is a call to plan. There are two pre-eminent issues for farmers to deal with.

First are the physical changes being felt already in the natural environment and will continue to emerge in the form of drought, flooding, heat stress, and the greater incidence of pests and disease. These will increasingly put pressure on unadjusted agricultural operations.

Second, are the legislative and regulatory forces being set to stem the physical changes via the Climate Change Response (Zero Carbon) Act which has targets to reduce emissions of biogenic methane by 10% below 2017 levels by 2030 and between 24% and 47% below 2017 levels by 2050.

Taken together, there is then no way out of confronting the exposure and vulnerability farmers face on both the effects of climate change and the action plan. So the Westpac-sponsored and Lincoln University’s Agribusiness and Economics Research Unit (AERU)-prepared NZ Agribusiness Climate Change Report is timely as it provides practical steps that farmers can take to engage with those challenges in a logical, considered way.

To be clear, the report doesn’t shy away from the implications if heads aren’t turned towards the challenge. Declining profitability and reduced wellbeing for farmers and growers are highlighted if changes to practices are not made. Furthermore, it also acknowledges that for some operations using a particular production system, there will be limits to the effectiveness of making adjustments short of full land use change. However, it is by no means doom-mongering. It is as much about identifying responses and opportunities.

Case studies, for example, model the impact of drought on dairy and sheep and beef production systems in North and South Island locations, providing templates of implications for pasture reduction, stock numbers and financial performance.

Subsequently, the report presents management techniques that could be taken to address different climate risks.

Lead author of the report, Lincoln University professor Anita Wreford says the work reflects the very early stage we are at in engaging with climate change, and an acknowledgement there is still a lot that isn’t known.

“The thinking on responding to climate change is relatively new to New Zealand and it has only been in the last 5–10 years when we have started thinking about it properly. The report is partly about providing farmers and growers with an understanding about how they might adapt to changes in the climate in their area. At the same time, it is important not to rely on current climate projections because there is still a lot of uncertainty about them.”

Recognising localised risks is obviously a solid first step. Westpac’s head of Agribusiness Tim Henshaw says identifying climate hazards and assessing exposure to those hazards will help determine how sensitive a particular farm might be to changes.

“Part of the difficulty is that there is no off-the-shelf solution that farmers can draw on. Every farm system is different and unique and the same hazard for two farmers, even in one location can be quite different.” This puts extra onus on farmers to build their own knowledge of their risks. Not surprisingly, one of the key findings in the report is that farmers may well need to obtain new skills in order to manage change, and be supported to do so.

Wreford says farm advisers will be increasingly important in transferring knowledge, particularly when farmers find themselves needing to adapt to new systems as part of a response. For that, advisers themselves will need to upskill, recognising what optimal adaptations look like in different parts of the country.

Henshaw says bank advisers, as part of the network of rural professionals farmers rely on, will have a role.

“As we step into this space to support people, we will need to educate our own team as best we can on the full picture of cumulative climate change risks.”

The increasing load being placed on the wider network of farm business advisers has not gone unnoticed by the government, keen as they are to ensure farmers are as well-equipped as possible. Earlier this year it announced a $25 million investment to expand and strengthen the primary industry advisory sector to build capacity and capability of services with particular regard for integrated farm planning.

Boosting the know-how of farm advisers will certainly help, but it won’t be enough to simply allow farmers to devolve responsibility for climate risk assessment and adaptation to others.A fundamental change in attitude that incorporates more flexible and agile thinking will be needed among all agriculture participants.

“It might be that a farmer may not need to do much in the short term. But gradual adjustments as impacts become more significant could then require faster action,” Wreford says.

Westpac’s Henshaw says “Some farmers will potentially need to be a bit more agile in developing resilience. But we can’t jump forward to see what is necessary. This first stage is to provoke farmers and growers into thinking about the challenge.”

It’s not surprising that banks are among the most proactive among the primary sector stakeholders in encouraging the development of resilience. Not only are they reliant on farming operations remaining viable and profitable in order to service debt, but as of next year they themselves will be facing their own climate change-related legislative force via the Financial Sector Amendment Act which will mandate reporting of climate-related disclosures.

Beyond the kind of advice provided in this Westpac sponsored report, most banks have begun to introduce incentive-based sustainable finance products to initiate change. Meanwhile Rabobank recently launched a new sustainability podcast to support farm business decision making. Rabobank’s head of sustainable business development Blake Holgate says its purpose is to equip New Zealand farmers with the knowledge to develop and maintain resilient farming systems.

“The intention is to support farmers to make informed decisions about the future of their operations.”

To a point, this sounds a bit like common sense and for many perhaps, business-as-usual. Absorb information, take lessons from experts, and have a few options in your back pocket for when the time comes to act. The reality is, however, it won’t just be up to farmers to pull the strings to make their farm sustainable. The report notes farmers may set goals as part of their adaptation plans but they might be constrained or influenced by circumstances beyond their own properties.

Even in the resilience-building stage, there will be elements of preparedness that will require the development of supportive infrastructure beyond the farmgate, to support onfarm risk management.

The report usefully identifies a range of scenarios that will require collective forethought. In a drought, for example, a farmer may have plans to import feed or reduce their stocking rate. But for a multi-year event investment in water collection and storage and irrigation may be necessary, which could rely on a collective will. Similarly, the prospect of flooding may require multi-farm flood protection measures to be built.

There may also be wider industry influences, including regulation. If someone had a plan to diversify into an alternative crop, they may well need local processing or appropriate transport. Infrastructure may be lacking, which could ultimately prevent that being a viable option. In another case, a farmer with plans to introduce a crop that required specific water uses may face regulatory barriers in accessing it.

Then there is the influence from other groups. This includes industry advocates who may have a big role to play in supporting investment in new crops (or not). Wreford says that at times, this might constrain farmers from considering adaptations if their industry is not necessarily promoting it. As stated earlier though, the report is careful not to project fear. To balance out the warnings it casts opportunities that will come from recognising ‘transition’ risks and preparing to counter them. In terms of onfarm opportunities, it points to reduced production costs through using resources more efficiently, increased productivity from adopting techniques such as precision agriculture, and potentially increased profitability through diversifying farm systems.

The report also notes that climate change will inevitably deliver physical opportunities – it will no doubt become possible for some farms to start growing tropical crops, for example.

Some of the bigger wins are, however, likely to eventuate through addressing risks that will emerge beyond the farmgate such as trade access (ensuring restrictions aren’t placed on products that have high greenhouse gas (GHG) emission profiles, for example). Wreford says for farmers, there is an understandable under-emphasis on these opportunities because they probably don’t see themselves having much influence on improving their products’ competitive advantage in markets. Minimising these climate change risks relies more on collective than individual adaptation. The benefits are also harder to measure and see material evidence of – at least initially.

It still needs to be very much part of the plan. While the temptation will also be to look at what is beneath your own feet, Wreford says we shouldn’t take our eye off the big picture.