An analysis of the impact on agriculture of NI adopting a net zero greenhouse gas emissions target by 2045 suggests that the local cattle and sheep sector would need to be virtually eliminated if this objective is to be met.

Conducted by global business consultancy firm, KPMG, the work was undertaken to assess the potential impact of a Climate Change Bill brought forward by Green Party leader Clare Bailey.

Currently at the committee stage within the Stormont Assembly, the bill includes the 2045 target for net zero.

In effect, dairy cow numbers would reduce from their current 313,000 to just 44,000, with beef and other cattle falling from 1.3m to 180,000

However, as a private member’s bill, it lacks any form of regulatory impact assessment or economic appraisal.

In the absence of such information, KPMG was commissioned by various industry bodies to undertake an economic assessment.

Their work concluded that to hit the 2045 net zero target would require an 86% reduction in cattle and sheep numbers in NI by that date.

In effect, dairy cow numbers would reduce from their current 313,000 to just 44,000, with beef and other cattle falling from 1.3m to 180,000. The NI sheep flock would fall from 1.99m to just 276,000.

The net effect of that is a 54% decrease in farm employment, with around 13,000 jobs lost. The impact is most acute on beef and sheep farms in less favoured areas, where the report predicts that farm numbers would fall from 15,137 to just 348.

Lowland beef and sheep farms would drop from 5,230 to 1,112, while dairy farms in NI would reduce from 2,603 to just 363.

Over the period from 2021 to 2045 the total lost economic output to NI would be around £11.1bn

As livestock numbers reduce, it would have a negative impact on the 122 agricultural merchants registered in NI, over 70 feed companies reliant on the ruminant sector, private vets, hauliers and rural businesses. Various beef and dairy processors would also close.

“Many businesses will no longer be viable,” notes the KPMG report.

Over the period from 2021 to 2045 the total lost economic output to NI would be around £11.1bn.

Reaction

Commenting on the output from the KPMG report, UFU president Victor Chestnutt said he accepted changes will be required on farms to help reduce emissions, but that a net zero target by 2045 would devastate rural families and communities, and the wider NI economy.

As an industry we have been accused of scaremongering, the facts of this economic impact assessment speak for themselves

“A short-sighted vote-chasing position is not acceptable and we call on our MLAs to read this report from cover to cover, to come to their senses and realise the damage they will be contributing to should they back this ill-informed net zero target,” he said.

Also voicing his concerns, the chief executive of the NI Dairy Council, Dr Mike Johnson warned that the net zero target would reduce the dairy sector to a cottage industry with levels of milk production last seen in 1946.

“As an industry we have been accused of scaremongering, the facts of this economic impact assessment speak for themselves,” added LMC chief executive, Ian Stevenson.

Two pathways to get to net zero

When Stormont returns after summer recess, MLAs face the choice of two competing climate change bills.

The first is the private member’s bill brought forward by Clare Bailey. The second is a DAERA bill presented by Agriculture Minister Edwin Poots, which includes a 2050 target for NI to reduce emissions by 82% when compared to 1990 levels, as part of our contribution to an overall UK net zero target by that date.

The DAERA bill is based on a recommendation from the Climate Change Committee (CCC), the body which advises the UK government on climate change policy.

NI will remain a small net source of emissions

That advice is set out in the CCC’s sixth carbon budget published at the end of 2020, and in particular, a so-called “balanced pathway” for the UK to reach net zero by 2050. As part of their balanced pathway, the CCC recognise that NI is a large exporter of agri-food to Britain.

In addition, given that agricultural emissions (particularly methane from ruminants) are difficult to remove, NI will remain a small net source of emissions, which will have to be mitigated by carbon removal technologies, tree planting, etc, in other parts of the UK.

“This remains our clear recommendation,” noted a letter sent to Minister Poots by CCC chair Lord Deben in April.

In a statement released on Monday, UFU president Victor Chestnutt urged local politicians to “do the right thing and listen to the advice of the CCC before it’s too late”.

In NI, the CCC has recommended that 46% of agricultural land is taken out of production by 2050

But even if NI eventually adopts an 82% target as opposed to one that involves net zero, the impact on NI agriculture will be significant.

The CCC has suggested that our diets must change, with 20% less meat and dairy consumed in the UK by 2030, rising to a 35% by 2050.

This will free up land to plant trees and restore peatland. In NI, the CCC has recommended that 46% of agricultural land is taken out of production by 2050.

KPMG analysis

The analysis completed by KPMG does not consider what impact following the CCC advice would have on future livestock numbers. However, it would not be unreasonable to suggest that numbers of cattle and sheep will fall broadly in line with consumption trends.

Instead, the KPMG work looked exclusively at the potential impact of adopting a net zero target by 2045. To do that it used, and added to a “tailwinds scenario” as set out by the CCC.

When compared to its “balanced pathway”, the CCC tailwinds scenario assumes an even greater reduction in meat and dairy consumption by 2050 of 50%, additional tree planting, fewer people flying and rapid innovation in technology to remove carbon dioxide from the air.

The KPMG analysis effectively suggests that cattle and sheep farming would have to end

However, the CCC acknowledge that “tailwinds” is a “highly optimistic scenario”. It would mean that the UK reaches net zero by 2042.

But for NI, none of the pathways assessed by the CCC would get to net zero, and under “tailwinds” the reduction by 2050 would be 94%.

So if NI is to get to net zero by 2045 as set out in the private member’s bill, it will have to go further than the most stretching CCC scenarios.

The KPMG analysis effectively suggests that cattle and sheep farming would have to end.

86% livestock cut is worst case notes KPMG

While the KPMG analysis points to the need to cut cattle and sheep numbers by 86% if NI is to reach net zero by 2045, the report authors also acknowledge that this is a worst case scenario.

A number of options could materialise that mean cuts to livestock numbers might not need to be quite as drastic. Those include that other sectors of the economy decarbonise at a faster rate than envisaged, and that more reliance can be put on new technology to capture and store carbon from the atmosphere.

Also, the report alludes to the potential for soil to be able to take in and store more carbon than thought, which could then be set against emissions from agriculture.

Methane

The other main issue relates to biogenic methane from ruminants. In NI, it makes up about 65% of agricultural emissions, and if CCC advice is followed, by 2050 it will be the dominant greenhouse gas. Although not covered in the KPMG report, there is growing acceptance that methane emitted by cattle and sheep is part of a biological carbon cycle, and should be viewed differently to other greenhouse gases.

Small reductions in pigs and poultry

Given that cattle and sheep produce much more methane in their digestion process than pigs or poultry, the impact of a net zero target by 2045 is not consistent across the various sectors.

While the KPMG analysis concludes that cattle and sheep numbers will have to fall 86% by 2045 to meet the net zero target, for pigs and poultry the estimates are at 11%.

“Informed by consultation with NI pig and poultry sector experts, it is assumed that both these sectors will not endure as severe a reduction to numbers to align with the 2045 net zero target. This is deemed an appropriate assumption as there is strong evidence and research supporting a net zero trajectory for the pig and poultry sector,” states the KPMG report.

Industry bodies behind the KPMG report

The KPMG economic impact assessment was commissioned by the Ulster Farmers’ Union (UFU), the Livestock and Meat Commission (LMC), NI Meat Exporters’ Association (NIMEA), Dairy Council NI, NI Pork & Bacon Forum and the NI Grain Trade Association (NIGTA).

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