The entire food production chain is extremely important to New Zealand with around half of our export earnings coming from the primary food industries. Favourable climate and good soils has allowed efficient production and a reputation for world leading food production systems. However, energy and climate issues are a growing focus of political and consumer attention around the world, and the majority of our energy supply comes from price-volatile fossil fuels that are tightly linked to GHG emissions. Recognising and acknowledging the essential role of energy inputs into our food supply systems is therefore a key part of understanding and adapting to these changing market demands.
Future-proofing New Zealand’s Agricultural Food System: Energy-related risks and opportunities
Scoping paper prepared by Warren Fitzgerald, Solis Norton and Janet Stephenson.
The overall objective of the project is to scope out the opportunity for the New Zealand agricultural sector to engage with energy supply and energy use in radically new ways, taking advantage of new developments in energy technologies, energy management and new business models. As part of this we will develop relationships with key stakeholders and end-users, and develop research questions in collaboration with these groups. The end point is to feed into the development of a funding application for MBIE 2017 Research Programme.
The agricultural sector in New Zealand has become increasingly dependent on high energy inputs, both in production and manufacturing, and embedded into farm inputs. Electricity use in agriculture has been increasing rapidly in recent years, unlike in the residential, commercial and industrial sectors where demand has largely flattened. This is strongly related to installation of irrigation systems and modern dairy sheds, which in some cases has led to such large increases in demand that the lines infrastructure is insufficient to cope with drawdown. Farms are also increasingly dependent on mechanisation of farm processes, with dependence on electricity or diesel. Farm inputs such as fertilisers and animal feeds also have significant energy inputs. Transportation of farm products, especially daily milk deliveries, rely on trucking very long distances on a daily basis. Processing of farm products is also heavily energy dependent, and Fonterra is the third largest coal user in New Zealand after NZ Steel and the Marsden power station.
The agricultural regime as a whole is thus highly reliant on significant inputs of electricity and fossil fuels, which brings vulnerability from oil price volatility, limited lines capacity and the potential impact of a carbon charge, as well as unprepared for the implications of disruptive change in energy and transport systems.
Transitioning away from fossil fuels is another challenge. It is widely accepted that human-produced carbon emissions will need to reach net zero within the next 30-50 years if the world is to avoid dangerous climate change. For the most part the changes needed to achieve this will be in massive reductions in the use of fossil fuels – coal, oil and gas. Due to the embeddedness of these fuels in all aspects of the economy, systems of production and consumption will need to be ‘unpicked’ and reconfigured so as to replace fossil fuels with renewables, and the transition could thus take decades. In the rural sector, as in all others, starting early, analysing the options for change, and ensuring timely investments in low-carbon options will be far less disruptive and costly than leaving it to later when global economies may be depressed by the impacts of climate change (Stern 2010).
At the same time, there are significant opportunities for the rural sector to take advantage of these changes. Internationally, rural economies are moving to ‘farming energy’ alongside traditional rural products. Solar, wind and biofuels production are becoming normalised as part of multi-tiered farm production, using a variety of business arrangements including multi-farm cooperatives. Rather than simply being consumers of energy, farms can engage actively with energy systems, becoming ‘prosumers’, with the ability to produce and store energy, and to add further value to farm operations through demand response (e.g. temporarily reducing irrigation load for financial return, in order to help reduce peaks in demand in the electricity system as a whole).
There are other advantages in farms focusing on reducing carbon emissions from fossil fuels. International markets for farm products are becoming increasingly discerning about ‘green’ credentials, and with global action on climate change becoming increasingly urgent, it is likely that heavy consumption of fossil fuels in the transport and manufacturing of farm products will become a point of concern for consumers. Additionally, while reducing greenhouse gas emissions from animals and soils is technically challenging, reductions in emissions from use of fossil fuels is far more straightforward and could result in some quick wins for the sector while waiting for R&D to produce solutions for agriculture-related emissions. Quick wins may include increasing farm productivity through more efficient use of energy, on-farm energy production, and fuel switching.