Individual farmers may yet face obligations for greenhouse gas emissions on their farms.
The Government and industry are still debating where the point of obligation for emissions should lie, with the Government favouring placing liability with primary industry processors but farmers and the industry preferring individual farmers.
Federated Farmers policy analyst Jacob Haronga said for ease of administering greenhouse gas emissions, the Government would rather deal with 40 processors than 30,000 farmers, but the proposed Bill would allow farmers to opt in to the emissions trading scheme (ETS).
Details on how it would work were still to be finalised.
A partner in the Wellington law firm Buddle Findlay, Alastair Hercus, was urging farmers to become involved in the process, saying the Government has a deadline of June 30, 2010, when the industry had to decide where the point of obligation would be.
Mr Hercus said by the middle of next year, the sector should have an idea what it wanted so systems could be designed, policy developed and the farming sector educated.
Placing obligation on processors such as dairy and meat companies meant emissions would be averaged over all suppliers.
Mr Hercus said farmers would be charged for each animal or kilogram of milk solids, with little or no recognition of individual attempts to reduce greenhouse gas emissions, the class of stock they carried or farm management.
He said farmers needed to be involved in the policy decisions, because the ETS was not going to go away.
"Even if you might think there is going to be a change in Government, there will still be a policy, no doubt about it."
Mr Haronga said a working party convened by the Ministry of Agriculture and Forestry was preparing recommendations for the Government and he felt the point of obligation could be placed with farmers.
"We should be able to get the point of obligation to the farm level. It might take a bit of a fight to get Government there, but I think we can get them there."
The Government's reservations were over how it would work, but the committee felt the Overseer nutrient management programme could have a role.
Mr Haronga said it was already in use on 90% of dairy farms and used the same algorithms as Government systems, but needed some changes to become an emissions calculator.
To make the processor the point of obligation meant the ETS would be based on outputs only, he said.
It took no account of the variety of output production throughout the country or the complexity for processors who would have to manage and be required to buy New Zealand Units to cover the industry's greenhouse gas emissions.
The ETS was a different issue to the Kyoto Protocol, which was about Governments committing to reduce greenhouse gas emissions.
Federation climate change spokesman Frank Brenmuhl said in the organisation's update magazine business and industry could immediately invest in technology to reduce greenhouse gas emissions such as more efficient transport systems and energy use.
That option was not yet available to agriculture, yet New Zealand was leading the world on climate change when its most important export, food and fibre, was its greatest generator of greenhouse gas.
"The reality is that farming is in an unfortunate position. Food and fibre producers are being targeted, yet there is little they can do at this point beyond reducing output.
"Reducing farm emissions is more difficult than was hoped and the ETS could simply result in a tax on the food and fibre sectors."
He said the level of carbon emissions per unit of production from New Zealand farmers was the world's lowest.
Mr Brenmuhl likened designing the ETS to designing a new monetary system.