The Nationals federal leader David Littleproud says Australia’s banks will be able to cut off capital for Australian farmers if they haven’t reduced their emissions – including their methane emissions.
Mr Littleproud accused the Albanese Government of signing Australia up to open-ended agreements out of COP27 (this month’s United Nations Climate Change Conference in Egypt).
And he said because methane only has a shelf life of about 12 years, there was no scientific way in agriculture to get rid of it.
“In fact, people are talking about seaweed additives in your food for livestock to get rid of it,” Mr Littleproud said.
“Those trials are proven, but they’re too expensive and can’t be done.
“So we are signing up something we don’t have a solution to … be very mindful that within that pledge, there is a clause that actually allows our banks to use their moral compass.
“God help us, they will be able to cut off capital for farmers if they haven’t looked to reduce their emissions and even methane emissions.”
Speaking to Sky News, Mr Littleproud said even though the government was saying the agreement is non-binding, it has a clause saying financial institutions can restrict capital to farmers if they don’t demonstrate they can reduce methane emissions and total carbon emissions.
He said this meant, at a grassroots level, farmers can’t go and expand their crop.
“In fact, they can’t go and expand their properties, or even run their properties. And so this is a roundabout way of getting to what (New Zealand Prime Minister) Jacinda Ardern had the courage to do – to put a tax on it,” Mr Littleproud said.
“So what we’re saying is you need to have a whole reduction of emissions, otherwise you will pay.
“The commentary here from the Canberra press gallery was into me when I said: ‘Barbecues were going be stopped because of this. Australians won’t be able to afford it’.
“Well, let me tell you, they already can’t. A T-bone is around $30kg. Your eye fillet, it’s over $75kg.
“There’s a lot of families that haven’t had a barbecue for well over two years. And if you take away supply, you lift price, and this is what they don’t understand. If you don’t have a solution to achieve this, then what happens is you either have to tax it or you reduce your herd size.”
Mr Littleproud said banks are already asking farmers what their environmental credentials are.
He said if we go down these rabbit holes, invariably it is finances which can be withheld if they’re not living up to the standards the banks want to morally set.
The NFF wanted both sides of politics to reiterate their commitment to working with farmers to navigate climate risk and capture the diverse new income opportunities on offer.
“According to the ABC’s Vote Compass, 57 per cent of people surveyed think agriculture is doing its fair share or more on climate action, higher than business in general (43 per cent), other countries (33 per cent) or the general public (52 per cent),” NFF president Fiona Simson said.
“This public recognition must be backed up with continuing support from Australia’s Parliament. The NFF has supported an all-economy net zero emissions by 2050 target since 2020.
“But that support includes two clear caveats: There is an articulated economic pathway forward. Farmers don’t suffer at the hands of draconian green tape.
“Right now, we’re on one side of the river waiting for help to build the bridge to get across.”
The North West Farmer asked the biggest banks in Australia if they were going to link climate change to farm finance.
Below are the responses received (space restraints means some have been edited).
WESTPAC: A bank spokesperson said Westpac was committed to growing its investment across the Australian agriculture sector, with its agriculture book up nine per cent in the year to September 2022.
“Australia’s farming sector is leading action on the climate change challenge, and like Australia’s major banks, has committed to Net Zero by 2050,” the spokesperson said.
“Westpac is committed to supporting our existing and new farming clients as we work together to reduce emissions across the economy.”
Read more in Westpac’s Climate Change Position Statement and Action Plan.
NAB: Executive, regional and agribusiness, Julie Rynski, said NAB knew climate change and sustainability is top of mind for many of customers right through the various supply chains.
“At NAB, our focus is on supporting businesses to decarbonise, build resilience and capitalise on opportunities, Ms Rynski said.
“Our farming customers also have a unique position in being able to leverage their farmland assets to increase carbon sequestration for carbon insetting, and potentially engaging in carbon offset or biodiversity offset markets to create new income streams.”
“Sustainability has always been an important consideration as part our credit assessment process for our agri-customers.”
“We’re proud to be Australia’s largest lender to agricultural business, lending over $1 in every $3 to farmers.”
For a case study, read an article on the NAB website, Queensland Farmers on the Forefront of Sustainable Agriculture.
ANZ: This bank referred us to its environmental, social and governance publication and agreed it was “engaging with 100 of our largest emitting business customers, to encourage them to strengthen their low carbon transition plans and enhance their efforts to protect biodiversity, by end 2024”.
“Last year, transition plans for those 100 … were grouped into levels of maturity – advanced, well developed, underdeveloped/starting out, and no public plans,” the bank said.
“Where a customer remains in the ‘no public plan’ category, or in situations where there is a continued misalignment in approach, we will consider the most appropriate actions on a customer-by-customer basis.”
“Over the course of our engagement with our customers, there have been instances where we declined finance or reduced limits to customers with less developed plans or a misalignment in approach.”
Read more in ANZ’s 2022 Environment, Social and Governance Supplement.
COMMONWEALTH: With almost $28 billion in forestry and agriculture exposure, the Commonwealth Bank of Australia said in assessing a banking relationship with customers it considers a variety of factors.
In some cases it may form a view it does not wish to, or no longer wishes to, continue a banking relationship with a customer based on the risk factors.
“Our group environmental and social framework helps inform our decisions on the provision of banking services and funding to businesses,” the bank said.
