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Industry reaction: Carbon price to hurt farmer hip pockets

Beef Central, 10/07/2011

NSW Farmers’ has expressed concern about the impact a carbon price of $23 per tonne will have on farmers, despite confirmation the agriculture sector and diesel will not be covered by the Federal Government’s carbon tax proposal.

NSW Farmers’ President Charles Armstrong said in a press release this afternoon that the Prime Minister’s assurances that Australian families won’t be worse off doesn’t seem to apply to families in the bush.

“Under a carbon price of $23 per tonne, the average grain grower can expect to lose $3,000 each year within the first five years,” he said.

“The average sheep farmer will see their income drop by $1,500 over the same period, and the average beef producer will be $1,400 out of pocket.

“The biggest impact will be felt by cotton farmers and rice growers who will lose $11,000 and $9,000 respectively during that same time,” he said.

Despite the decision to include diesel in the carbon tax fuel exemption, farmers are expected to be slugged with higher electricity, fertiliser, transport and processing costs.

“Businesses providing these inputs are able to pass their carbon tax increases on to the farmer, but the buck stops with the farmer who isn’t able to pass on their higher cost of production,” Mr Armstrong said.

“It is for that reason we remain strongly opposed to the carbon tax proposal,” he said.

NSW Farmers’ remains concerned about potential changes to the fuel excise scheme for farmers, and will be monitoring any recommendations to the Productivity Commission concerning the diesel rebate.

Queensland peak farm organisation AgForce has welcomed agriculture’s permanent exclusion from the carbon tax but remains critical of the impact the tax will have on the profitability and competitiveness of Queensland producers.

AgForce president Brent Finlay said AgForce supports the National Farmers’ Federation (NFF) position that acknowledges the measures taken by the Federal Government to reduce the cost burden for Australian farmers from the carbon tax and to assist agriculture in developing genuine carbon mitigation options through new R&D.

“AgForce is pleased to see agriculture included as part of the carbon solution, rather than part of the problem, and we particularly welcome the investment of more than $400 million into agricultural carbon mitigation R&D and extension,” Mr Finlay said.

“This, as well as support for primary food processors to move to a low emissions future and measures to support non-Kyoto compliant CFI credits and to reward on-farm biodiversity projects, are all positive carbon concessions for Queensland’s producers.”

Mr Finlay said despite these allowances, agriculture will still be forced to bear added costs that will impede the industry’s competitiveness in domestic and international markets.

“AgForce is concerned that heavy-vehicle fuel will only be excluded from the carbon tax for two years, and we question what this will mean for the transport of key commodities such as grain and beef in Queensland,” Mr Finlay said.

“We also remain cautious that that any future reviews of fuel excise tax by the Productivity Commission could add additional costs into farm businesses.

“Regardless of agriculture’s direct exclusion, producers will still bear additional costs from electricity and other indirect energy-related sources as a result of the farming tax, as independent research from the Australian Farm Institute has emphasised.

“This research shows that even with fuel excluded, the average Australian farmer will still incur an additional $1,500 a year in costs under a carbon price of $23 per tonne, eroding their net farm income by 2.4 percent.
“AgForce supports NFFs sustained opposition of the carbon tax, and will work with NFF to continue our analysis of today’s information so we can best represent Queensland’s broadacre producers.”

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