Grass, my ass!
[First published in Organic NZ, November/December 2009.
This version amended and fully referenced April 2010]
Christine Dann examines the controversy around palm kernel imports and finds more evidence of unsustainable farming practices.
True or false? British butter comes from cows kept indoors half the year and fed unspeakable things, while New Zealand butter comes from cows which graze freely all year round on good, clean grass.
Fifteen years ago this might have been true. This was before free trade agreements which secured low or no tariff access for New Zealand dairy products to many countries provided a powerful incentive for New Zealand dairy companies to increase their production and sales.
New Zealand's carbon hoofprint
Increasing production using industrial methods comes at a big cost to the environment, however. Growing more grass to feed more cows, New Zealand style, has involved constructing energy and water-intensive irrigation systems in dry areas. It has meant applying more artificial fertiliser, which has polluted soil and waterways. Increased stocking rates also mean more soil and water pollution from cow urine and faeces, plus more release of the greenhouse gas nitrous oxide.1 More dairy cows also means more emissions of the powerful greenhouse gas methane. New Zealand now has around two million more dairy cows than it had in 1990, 2 and they contribute significantly to the 10% increase in emissions from enteric fermentation (digestive processes) there has been in that time. Methane from enteric fermenation is now New Zealand's single highest source of emissions (31%) 3
Feeding with palm kernel increases the hoofprint
It's not a pretty picture - and in the past five years it has got uglier as farmers adopt supplementary feeding with cheap imported feeds as a routine method of raising production.
At this point only a minority are doing it regularly, but the rest are being encouraged to do so by a steady diet of pro-feeding propaganda from feed companies and consultants 4 – and by the availability of cheap imported feedstuffs such as palm kernel expeller (PKE). PKE is one of the three products derived from oil palm production, the others being crude palm oil (used in food processing and preparation) and palm kernel oil (used in soaps, shampoos and cosmetics). Palm oil also goes into the dairy cow feed chain, in the form of rumen-inert high energy supplements. 5 PKE currently represents 12-15% of the value of palm products sold worldwide, and its trade price has increased by 128% in the last four years. 6
Despite the price rise, PKE is still a cheap feed. The dairy industry research company DairyNZ has calculated the costs of different forms of feed by how well they improve a cow's productive capacity. Pure PKE comes out as the fourth cheapest option, while PKE mixed with 25% tapioca is third cheapest. 7 (Nitrogen was the cheapest option – and during the recent drought DairyNZ advised farmers to break best practice rules and pour it on. 8 How much did that add to nitrous oxide emissions?) DairyNZ also provides a handy guide to supplementary feeding generally, which states that the 'cost of milk production...is the primary driver of profitability in dairy farming.' Therefore 'the rule of thumb is to pay no more than 5% of payout for a kilogram of dry matter supplement'...where the following rules are applied i.e. at $4:50, $5.00, $5.50 payouts, pay no more than 22 cents/kg DM, 25 cents/kg DM, 27 cents/kg DM, (respectively).' 9
Even during the drought of 2007-2008, which affected some dairying regions badly, there was plenty of home-grown supplementary feed available. Some of it (e.g. maize silage) even cost less per tonne than PKE. Further, DairyNZ advises against feeding energy supplements (such as palm derivatives) except when there is insufficient pasture, as it will be wasted. 10 Nevertheless, on farms aiming for high production over 5% of the cows' diet could be PKE. Even when it is less than this, one medium sized dairy farm can still get through a tonne of PKE in a week. 11
The real costs of imported feeds
If cheapness to the farmer is the main benefit of PKE, what are the costs which are being displaced on to society and the environment when New Zealand imports PKE? When Greenpeace activists boarded the PKE carrier East Ambition outside the port of Tauranga on 16 September 2009, the reaction of Federated Farmers president Don Nicholson was to call them pirates and charge them with committing 'economic treason'. 12 Yet there is a much better case for calling the PKE suppliers and purchasers economic traitors. A month earlier Green Party Co-Leader Russel Norman had already labelled PKE imports as 'economic sabotage'. 13 The 1.1 million tonnes of PKE imported into NZ in 2007-08 was worth $317 million. All of that money went to foreign production companies - none of it went to feed producers and processors in New Zealand. Andrew Gillanders, Federated Farmers Grains and Seeds chairman, had said in May 2008 that he was concerned at the large volumes of palm kernel coming into the country for stock feed, both on sustainability and national economic grounds. Palm kernel imports were competing against New Zealand's silage and grain industry, leading to some farmers pulling out of maize silage production. 14
The Grains Council complained about the impact that PKE imports were having on the economic viability of the local feed industry in August 2009, and Green MP Sue Kedgley tabled the letter which covered their concerns in Parliament that month. 15
Bugs or methyl bromide? Neither, thanks.
The Green Party also followed up on concerns about biosecurity, 16 which (non-dairy) farmers first started raising in 2007. 17 PKE consists of a fine meal which is transported in a loose form in ships and trucks, and is often put out loose into paddocks. PKE in its raw state is known to be contaminated with live insects, toxic fungi, and foreign plant materials, some of which have the potential to do major environmental (and economic) damage in New Zealand. As a result of farmers raising biosecurity concerns two years ago it is now mandatory for PKE shipments to be fumigated. The fumigant used in New Zealand for shipments which arrive with inadequate prior fumigation is the highly toxic methyl bromide (against which the Soil and Health Association has been campaigning for several years). 18
Despite fumigation supposedly taking care of the biosecurity problem, in August 2009 Federated Farmer's national board member John Hartnell claimed that ...'a contaminated container load of palm kernel had been discovered at Bluff, riddled with insects and maize kernel...' and that 106 different types of insect had been discovered living and breeding in PKE bulk stores around the country. These claims were denied by MAF biosecurity personnel.19
Forest death = climate death
So PKE imports are bad news for the local environment. Plantation palm production is even worse news for the countries from which New Zealand imports PKE (mostly Indonesia and Malaysia) where it is doing major damage to ecosystems and wildlife. It is also endangering the global environment, due to carbon emissions associated with clearing tropical forests to plant oil palms. Greenpeace estimates that the PKE imported into New Zealand in 2008 (which was one quarter of the world supply in that year) equated to a carbon footprint of 20 million tonnes CO2 equivalent. 20
What's driving the damage?
Unsurprisingly, then, Greenpeace is calling for a halt to PKE production and importing. The environmental costs are just too high. But we live under an economic system where what is good for society and the environment as a whole, both now and in the future, is routinely sacrificed for private financial gain in the present. In this regard it is disturbing to note that last year Fonterra subsidiary RD1 went into a joint venture with Wilmar, the world's largest PKE producer (and one with a very bad business and environmental track record). 21 Also that the big Australian grain and feed company, ABB, which is currently the biggest shipper of PKE to NZ, has spent millions on expanding and upgrading its storage facilities at New Plymouth and Tauranga, and is building a
$30 million feed mill in South Auckland with a special ruminant feed production line. 22
PKE is now also big business for the provincial ports which service the dairy hinterlands. The port of Taranaki has been waxing lyrical about the trade since it first took off in 2005, 23 while in May 2009 the port of Timaru said that it was looking to PKE imports to make up a shortfall in business caused by the recession. 24
Another reason for organics
It is going to be hard for those arguing for long-term sustainability ahead of short-term profitability to prevail against such powerful vested interests. Meanwhile, the PKE controversy provides yet another platform for organic producers to show why and how organic systems which capture carbon and conserve energy at every point in the production cycle are the only way of farming which has a future worth contemplating.
Footnotes
1. Parliamentary Commissioner for the Environment (2004), Growing for Good,
www.pce.parliament.nz/reports_by_subject/all_reports/land_use/growing_for_good
2. Ministry for Agriculture and Forestry [n.d.]
Livestock numbers since 1971
http://www.maf.govt.nz/statistics/pastoral/livestock-numbers/
3. Ministry for the Environment [n.d.]
New Zealand’s Greenhouse Gas Inventory 1990–2005
Archived at http://www.mfe.govt.nz/publications/climate/nir-jul07/index.html
Chapter 6: Agriculture
Archived at http://www.mfe.govt.nz/publications/climate/nir-jul07/page7.html
.Ministry for the Environment (2005)
Projected balance of units during the first commitment period of the Kyoto Protocol
Appendix A. Projections of Agricultural Greenhouse Gas Emissions to 2010
Ministry of Agriculture and Forestry
www.mfe.govt.nz/publications/climate/projected-balance-units-may05/html/page10.html
Ministry for Agriculture and Forestry [n.d.]
New Zealand's Greenhouse Gas Emissions and the Contribution from Agriculture - Dr Peter O'Hara
Reducing Nitrous Oxide Emissions from Agriculture - Dr John Freney
Past and Present Research on Methane Emissions - Dr Marc Ulyatt
http://www.maf.govt.nz/mafnet/rural-nz/sustainable-resource-use/climate/abatement-of-agricultural-greenhouse-gas-emissions/abatement-of-agricultural-greenhouse-gas-emissions-27.htm
4. From http://www.vitecnutrition.co.nz/, retrieved April 2010
''VITEC NUTRITION LIMITED - 'The Animal Nutrition Professionals'
Vitec Nutrition was formed in 1997 by individuals with long career histories with New Zealand's animal nutrition industry. In 2008 Vitec was acquired by Lallemand Inc, a French Canadian company represented in 50 countries around the world. Vitec draws expertise from the stock feed milling industry, mineral and vitamin supplement supply business and general nutrition advisory functions.
The personnel within Vitec offer over 100 years of combined skills in the technical servicing of New Zealand's pig, poultry, dairy and pet food industries. In addition to Lallemand, the company has strategic alliances with DSM Nutritional Products, Provimi, Pancosma, Bayer, Alstoe and Alpharma who have expertise in nutrition supplements and feed additives.
The company personnel profile boasts two nutritionists, Auckland based, specialising in monogastric and ruminant species, pet and equine nutrition.
WHAT DOES VITEC DO?
Vitec currently has a close association with the dairy industry, predominantly through its activities with the New Zealand stock feed manufacturing industry. Vitec supplies technical expertise with regard to the diet formulation of calf and dairy diets and assists feed manufacturers with the latest concepts in dairy nutrition i.e. the feeding of pre-calving transition diets, by-pass fat supplements, elevated trace mineral supplementation and lameness prevention.''
From the Intelact company's website - http://www.intelact.co.nz/page/intelact_404.php
''Independent research now confirms the Intelact conviction that by implementing an all grass system dairy farmers are limiting production to the level of grass grown and harvested. By using high quality, low cost supplements with the correct stocking rate and the appropriate advice, farmers will not only harvest more grass but also remove the cap on production. As a result profit can improve by more that $1,000 per hectare (Economic Farm Surplus), with potentially unlimited scope.''
5. Specifications for the palm kernel based supplement produced by US company Magnafat can be found at http://www.magnafat.com/magnafat_specs.htm
A major Asian producer of supplements from palm kernel is Wawasan Tebrau. Its business is described at http://www.tradeboss.com/default.cgi/action/viewcompanies/companyid/488331/ thus
''Wawasan Tebrau Group of Companies was founded in 1999 and is an established Malaysian company in producing rumen bypass fat, the calcium soap of long chain fatty acids for use by high milk yielding daily ruminants such as cows, goats & sheeps.
A diet of highly energy intense feed that is use for production of higher milk yield and recovery from birthing.
Benefits of Calcium Soap:
1) FASTER recoveries for your calvers
2) QUICK return to optimum fertility condition
3) OPTIMUM milk production
4) INCREASE in milk yield
5) DECREASE in metabolic complications such as ketosis, acidosis, milk fever
6) OPTIMAL nutrients absorption for your animals
Though young in age, we have established ourselves as a reliable producer supplying finest quality Calcium Soap globally. We offer OEM as well as produce our own brand.''
6. Greenpeace New Zealand (September 2009) 'Key Points – Palm Kernel Animal Feed',
http://www.greenpeace.org/new-zealand/press/reports/palm-kernel-briefing
7. Dairy NZ (April 2008) Farming out of the drought, Table 'Cost per CS gain', p. 30
http://www.dairynz.co.nz/page/pageid/2145848461
8. Dairy NZ (April 2008) Farming out of the drought, 'Nitrogen - get it on now', p. 22
http://www.dairynz.co.nz/page/pageid/2145848461
9. Dairy NZ (2009) '1.3 The 10 commandments of supplementary feeding' in
The Spring Survival Guide, http://www.dairynz.co.nz/page/pageid/2145845875
10. Dairy NZ (2009) '1.3 The 10 commandments of supplementary feeding' in
The Spring Survival Guide, http://www.dairynz.co.nz/page/pageid/2145845875
11. For actual PKE feeding ratios on a typical dairy farm see, for example, the farm walk notes for a Bay of Plenty dairy farm at http://www.dairynz.co.nz/page/pageid/2145836833. On 15 April 2008 the notes show that the 360 milking cows were each receiving 3 kg of PKE feed per week.
12. Quoted in '14 Greenpeace protesters removed after boarding ship ' at http://www.stuff.co.nz/national/2869838/Greenpeace-protest-damaging-stunt
13. Green Party media release, 'Palm kernel addiction threatens economic sabotage', 23 Aug 2009
http://www.greens.org.nz/node/21710
14. Gillanders was quoted in Angela Gregory's story 'Call to ban palm kernel imports', 5 May 2008
http://www.nzherald.co.nz/east-cape/news/article.cfm?l_id=142&objectid=10507873
15. Question 12, Dairying—Use of Palm Kernel for Stock Feed, 27 August 2009
http://www.parliament.nz/en-NZ/PB/Business/QOA/8/d/b/49HansQ_20090827_00000012-12-Dairying-Use-of-Palm-Kernel-for-Stock.htm.
See also Annette Scott, 'Grain growers hit ''perfect storm'' ', Farmers Weekly, 17 August 2009
http://www.nzfarmersweekly.co.nz/article/7867.html
16. Green Party Biosecurity spokesperson Kevin Hague M.P. began raising those concerns in 2009. See for example his November 2009 media release 'Govt foot falls from mouth on biosecurity risk' at http://www.greens.org.nz/press-releases/govt-foot-falls-mouth-biosecurity-risk
17. Richard Rennie's story 'Palm kernel discontent simmers' in The New Zealand Farmers Weekly, 23-04-2007 (http://www.nzfarmersweekly.co.nz/article/6834.html) covers the early concerns.
See also 'Is your cow feed hazardous?' by Rachel Breckon in Straight Furrow, 7/09/2009
(http://straightfurrow.farmonline.co.nz/news/nationalrural/agribusiness-and-general/general/is-your-cow-feed-hazardous/1616184.aspx?storypage=0) and 'Disease danger in palm kernel imports',
http://www.agridata.co.nz/blog/2009/08/24/disease-danger-in-palm-kernel-imports/#more-1945
18. See 'ERMAs Chemical Cowboy Approach To Methyl Bromide Branded Reckless', Nov 6, 2009
http://www.organicnz.org/soil-and-health-press/1183/ermas-chemical-cowboy-approach-to-methyl-bromide-branded-reckless/
19. 'Palm kernels cleared', The Press, 20/08/09, p. A11
20. Greenpeace New Zealand (September 2009) 'Key Points – Palm Kernel Animal Feed'
http://www.greenpeace.org/new-zealand/press/reports/palm-kernel-briefing
21. RD1 announced its joint venture with Wilmar in June 2008 (RD1 MEDIA RELEASE -
JUNE 26, 2008, RD1 ANNOUNCES AGREEMENT TO FORM JOINT VENTURE WITH WORLD'S LARGEST PALM KERNEL EXPELLER SUPPLIER)
In September 2009 Greenpeace announced that RD1's/Fonterra's claims that Wilmar was a responsible and sustainable producer of PKE were a sham. (Greenpeace New Zealand, 'World bank proves Fonterra's claims a sham' 10 September 2009, http://www.rd1.com/web/content?in_section=2&in_item=640&in_page=6654)
22. 'PKE imports soar' Rural News, 19/2/2008
http://www.ruralnews.co.nz/Default.asp?task=article&subtask=email&item=14864&pageno=1
ABB news release,' Maiden vessel bringing tapioca for hungry NZ livestock', 15 April 2008
http://www.abb.com.au/MediaReleases/tabid/191/mid/533/newsid533/16/Default.aspx
23. 'Grain trade grows in Taranaki,' Portal, December 2005
www.porttaranaki.co.nz/General/documents/PortalDec2005.pdf -
24. 'Palm kernels help buoy port's profit outlook', The Press, 20.5.09, p. B8
