A report released yesterday by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) confirms that farmers will face additional costs under the carbon tax.

National Farmers Federation president Jock Laurie said the report clearly shows farmers will be slugged with additional costs under the tax, due to higher input costs such as electricity and the potential pass through of costs from the processing sector.

“Months ago, during the carbon tax debate, the NFF released independent research from the Australian Farm Institute (AFI) which showed that Australian farmers were going to wear the cost of the carbon tax,” Mr Laurie said in a media release issued today.

“We now have a Government report that reflects the AFI’s findings, showing that farmers, particularly dairy farmers, are going to wear the costs.

“We are the first to acknowledge that agriculture’s direct emissions are not covered by the carbon tax and that concessions have been provided by the Government regarding agricultural fuel, carbon mitigation R&D and extension and rewards for biodiversity projects – however, this does not mean that agriculture will get off lightly under the carbon tax,” Mr Laurie said.

“In particular, we are very concerned about the impact of the carbon tax on other parts of the agricultural supply chain, particularly food processors, and what this will mean for our farmers.

“Food processors are facing millions of dollars in higher costs as a result of the carbon tax, particularly through increased electricity prices, and many have said that the only way they can recoup this cost is to pass it on to their suppliers – our farmers.

“The ABARES report shows that should processors pass on these costs, dairy farmers will lose some $4,200 in revenue, increasing to losses of $4,580 once heavy vehicle fuel is introduced under the tax from 2014.

“We have to question why the Government didn’t release this research from ABARES earlier, so that it could help inform the carbon tax debate.

“We are calling on the Government to make the exclusion of heavy vehicle fuel from the carbon tax permanent, and to give the processing sector the assistance it needs so as to not pass on the costs of the carbon tax to farmers,” Mr Laurie said.

Meanwhile federal opposition agricultue spokesman John Cobb said that despite Government claims that industry was "overstating" the impact of carbon tax costs, the ABARES report confirmed that farmer's fears were justified. 

Mr Cobb said it was concerning that the Government had waited until its carbon tax legislation had passed before allowing ABARES to put facts regarding impacts to agriculture into the public arena.  

He also higlighted comments (below) made by the Prime Minister in a radio interview in which she said farmers could pass any cost from a carbon tax back onto the consumer.  

“How can our Prime Minister be so ignorant of how agriculture works? How can her Agricultural Minister be so ignorant?

“Gillard’s inept government has come up with a tax which is oblivious to agricultural realities. Together with the Greens and Independents they will paralyse the country and see Australia increasingly reliant on imported food.” 

5AA Leon Byner interview:

Caller – JAMES,  DAIRY FARMER – The dairy industry yesterday released some figures saying that the impact per farm is going to be between five and seven thousand dollars per farm…we’ve got Coles and Woolworths keeping the price of food down to keep downward pressure on the cost of living…could reduce cash farm incomes by between 12 and 25% – another nail in the coffin of Australian agriculture. Do you want us to go to another country and produce a food or do you want us to stay here?

PRIME MINISTER JULIA GILLARD: Of course I want you to stay here doing all of the great work you do to provide the fresh produce we all enjoy. On the prices received by dairy farmers from our big supermarket chains, I have consistently said that supermarket chains need to appropriately reward dairy farmers and they should not be the people who are paying the price for discounting. The supermarket chains publicly responded to that and said that they will not make dairy farmers pay the price of discounting. You will pass any additional costs through. They will be passed through to the consumer and that’s what the household assistance is to help.