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Carbon tax to cripple nation’s farming sector, says study

30 May 2011

New research revealed today by the National Farmers’ Federation (NFF) confirms that Australian farmers will be hit by massive rises in input costs under the Federal Government’s proposed carbon tax.

The figures show that farmers may face more than $36,000 a year in additional farm business costs under the proposed tax, severely impacting the profitability and sustainability of Australian farms and farming families.

NFF President Jock Laurie today called for the carbon tax to be rejected on the basis that it will make Australian farmers less competitive in both domestic and international markets.

“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.

The research, conducted by independent researchers at the Australian Farm Institute on behalf of NFF members and individual agricultural commodity groups, analyses the impact of a carbon price on Australian farm businesses under various scenarios. The first paper, released today, focuses on the Australian grains sector.

Under the scenario of a carbon price of $36 per tonne, the research has found that five years after the introduction of a carbon tax, an average WA grain farm would be hit by additional annual costs of $36,882. This is an increase in costs of four percent compared to a business-as-usual scenario, and would result in a 13.1 percent reduction of net farm income.

“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,” Mr Laurie said.

“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,” Mr Laurie said.

The remaining research papers, investigating the impact of the proposed carbon tax on the sheep, cattle, rice, sugar, cotton, pork and diary sectors will be released as they become available.

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