The first item of business for the Coalition Government’s first Parliamentary sitting this morning was the introduction of legislation to repeal the former Labor Government’s controversial carbon tax.

The move was applauded this morning by the National Farmers Federation and other farming groups.

President Duncan Fraser said the NFF did not support the carbon tax as a means of reducing greenhouse emissions, as it added unnecessary costs into Australian farm businesses.

As large carbon emitters, about a dozen of Australia’s largest beef processors were burdened with a direct tax of $26/tonne of carbon equivalent generated, costing some large individual plants up to $2 million each year.

One estimate published earlier on Beef Central suggested the carbon tax could cost Australia’s ‘big three’ beef processors (JBS Australia, Teys Cargill joint venture and Nippon Meat Packers Australia) a combined $19 million each year (click here to view earlier article).

Crucially, the direct carbon tax also represented a penalty against economies of scale in processing, with smaller (and by definition, less efficient) plants falling below the 25,000 tonne carbon threshold not liable to the tax impost. Nor is such a tax paid by any of Australia's international beef competitors.

“Australia’s farmers have led the way in emissions reductions without the carbon tax,” Mr Fraser said.

“We have been very vocal opponents of the carbon tax, and remain so – due to the cost burden borne by our sector,” he said.

“Agriculture may be excluded from directly paying the tax, but that doesn’t mean that its impact isn’t felt by our farmers – in fact, agriculture remains a heavily affected sector due to the flow-on costs allocated to electricity and transport, and by the pass-through costs from agricultural processors.”

Farmers operated in an extremely competitive marketplace already, and they did so off their own bat, with Australian farmers receiving one of the lowest amounts of Government subsidies of any OECD country, Mr Fraser said.

“Add in the impact of this tax, and our farmers are not only competing against heavily subsidised farmers from around the world, but also farmers in overseas countries without a carbon tax,” he said. 

“Critically, agriculture recognises the need for action on the reduction of carbon emissions, and our sector has been leading the way. We have already adopted many practices to help improve our carbon footprint: soil sequestration through minimum till farming; revegetation of land and waterways; the return of land to the environment for conservation; and methane management of livestock and effluent ponds, among others.”

“In fact, the former federal Department of Climate Change has said that Australian primary industries have led the nation in reducing greenhouse gas emissions – a massive 40 percent reduction between 1990 and 2006.”

“We know that farmers and agriculture can play an important role in reducing emissions, but we firmly believe that in order for our sector to reach its potential, greater investment in research and development is needed to develop and convert carbon science and methodologies into on-farm action,” Mr Fraser said. 

That was why NFF supported programs like the Carbon Farming Initiative, and was disappointed when the former Government cut funding from the Biodiversity Fund and Carbon Farming Futures.

Both were important programs that helped farmers store carbon and continue their work as frontline environmentalists.

“Today, we support the Government’s move to repeal the carbon tax legislation, and call on the Government to strategically invest in the agricultural sector to help it reduce its carbon emissions,” Mr Fraser said.