06/12/2011 (Radio New Zealand) - Federated Farmers has questioned the logic of a report released by Greenpeace as part of a campaign to stop the dairy industry from using palm kernel expeller imported from Indonesia and Malaysia as stock feed.

Greenpeace argues that, by using the residue left over from palm oil processing as a supplementary stock feed, the dairy industry is contributing to the destruction of tropical rainforests to make way for oil palm plantations.

It calculates that more than a million tonnes of PKE imported into New Zealand during the past dairy season could have produced almost nine million tonnes of carbon emissions.

It says that is equivalent to 12% of New Zealand's total annual greenhouse gas emissions.

However, Federated Farmers says it's found a huge flaw in Greenpeace's logic because it treats PKE as a co-product of palm oil, rather than a by-product, that would be burned or left to rot if it wasn't used for cattle feed.

The federation says it's like saying orange peel is a co-product of orange juice and so must carry the same carbon footprint as the juice.