The Federal Opposition and the National Farmers Federation have quoted a new independent report suggesting farmers will be forced to bear an additional $3.2 billion in production and processing costs under the Government’s carbon tax, being implemented from Sunday.

Shadow minister for agriculture and food security, John Cobb, said the figure estimated in the IBIS World report referred to the 2012-13 year, before increasing to $3.7 billion in 2014, due to the introduction of heavy vehicle fuel.

“The report confirms what we have known from the beginning, that Australian food processors unable to compete internationally or with imports that do not have a carbon tax, will simply pay farmers less,” Mr Cobb said.

“Farmers, as price takers in an intensely competitive global environment, will not be able to pass on their higher input costs on items like electricity, fertiliser, animal health products and pesticides. IBIS World says these carbon costs will result in a 6.4pc fall in farm-gate revenue.”

“This is in stark contrast to the Prime Minister’s assurances that farmers can simply pass on any extra costs to the consumer. We know that is not the case and never has been.”

 “The carbon tax is all economic pain for no environmental gain. It is a $9 billion-a-year tax on ordinary Australians; a 10-30pc increase in electricity bills and a 9pc rise in gas bills in the first year alone; and thousands of lost jobs.

“The costs of the tax will continue to rise hurting regional families, businesses and communities- not to cut carbon emissions – but to support the addictive and wasteful spending habits of this government.”

“The government is imposing a massive new tax that is blind to agricultural production. Together with the Greens and Independents they are paralysing this country and ensuring that we will increasingly rely on imported food.”

NFF remains opposed

With two days remaining until the carbon tax comes into effect, the National Farmers Federation has stepped-up its call for the Government to do more to stop the costs of the tax being passed on to the nation’s farmers.

“There is absolutely no doubt that the cost of the carbon tax will be felt by Australian farmers, and the NFF remains ardently opposed to the tax for this reason. In fact, we remain opposed to any tax that makes our farmers less competitive on domestic and international markets,” NFF president Jock Laurie said in a statement issued today.

“As the result of extensive lobbying by the NFF over many years, we have been able to secure the exclusion of agricultural emissions from the carbon tax.

“But this certainly does not mean that farmers will be exempt from the costs. High input costs such as electricity and fertiliser are already putting considerable pressure on the farm bottom line, and these costs are set to rise under the carbon tax. From July 1, farmers will face an increase in costs and a reduction in prices as the tax takes effect; costs and cuts that are totally outside of our control.

“Independent research by the Australian Farm Institute found that farmers will be slugged with additional costs under the tax due to higher electricity costs and the likely pass-through of costs from the processing sector.

These findings were verified by research from the Government’s own Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) which found that farmers, particularly those from the dairy sector, would face additional costs under the tax.

“Those who say that farmers will not be impacted by the carbon tax need only look at these pieces of research and the IBIS World study: all of which show very clearly that agricultural costs are going up,” Mr Laurie said.

“The bottom line is this: Australian farmers simply cannot afford to absorb these costs into their farm businesses.

“Just last week the Prime Minister noted that Australia is a very efficient agricultural producer. We are because we have to be in order to compete in the global marketplace. But the additional costs that farmers will wear from the carbon tax will make us less efficient and, and a result, less competitive,” he said. 

“We urge the Prime Minister to do more to stop this carbon tax impacting on our farm and processing businesses,” Mr Laurie said.