New Zealand’s dairy farmers are facing an uncertain future as their government seeks to embrace a low carbon movement. Speaking at the ASA conference on Friday Ian Proudfoot, global head of agribusiness for KPMG New Zealand, said the new coalition government would pursue a different policy on agriculture than previous ones.

At the end of October last year, New Zealand’s Labour party entered a confidence and supply agreement with the country’s Green party. Their leader James Shaw now holds the position of Climate Change Minister and has indicated his intent to introduce regulations on waterway pollution and emissions.

Ian explained that dairy farming would be one of the areas facing major reforms and said it was likely cow numbers would be reduced in the future. While the Green party has previously stated it had no plans to cap dairy cow numbers, it has been suggested it may seek to regulate nitrate use resulting in a reduction of cows.

“New Zealand will have less cows and produce less milk in the future,” Ian stated.

He said that parts of the government saw no need for dairy giant Fonterra and that it was unlikely another mega-dryer for milk powder would be built in the country. Instead, he said there was likely to be a shift towards value-added products rather than commodity based production.

Speaking about Ireland he said: “Believe me, as a country [Ireland] that’s growing your dairy production you’ve got some big challenges coming in front of you, we’re living them in New Zealand today.”

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