Annual costs for Australian grain growers would rise by around $36,000 per year under the Federal Government’s proposed carbon tax, according to the National Farmers Federation.

The NFF has commissioned the Australian Farm Institute to analyse the impacts of a carbon price on Australian farm business under various scenarios.

The first paper, released today, focuses on the Australian grain industry.

It reveals that under a carbon price set at $36 per tonne, five years after the introduction of the tax an average West Australian grain farm would incur annual costs of $36,882.

The cost hike would wipe 13.1 percent from the average grain farmer's annual net farm income, the research suggests.

NFF president Jock Laurie said the research shows that a carbon tax would severely impact the profitability and sustainability of Australian farms and farming families.

“We have long known that the Australian agricultural sector is going to be hit by the indirect impacts of the proposed carbon tax and this research shows the extent of this: the findings are dire for our farmers,” Mr Laurie said.

“Australian agriculture has a high level of trade exposure, and any additional costs imposed on farm businesses make it extremely difficult for our farmers to compete in the global marketplace.

“At a time when Australia needs to increase its food production in order to meet world demand, and Australian farmers are already operating as efficiently as possible in order to stay competitive, these figures show that the tax has the ability to cripple the entire agricultural industry."