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Australian rice growers the next carbon casualty

7 July 2011

The carbon tax will severely affect the ability of Australian rice growers to produce their staple food crop, new research released by the Ricegrowers’ Association of Australia and National Farmers’ Federation (NFF) has shown.

The research, conducted by independent researcher Australian Farm Institute (AFI), shows that a carbon tax with agricultural fuel included will add costs of over $22,000 into the businesses of Australia’s 1,500 rice growers, making them less productive.

“Rice is one of the most important crops in the world, helping to feed half of the world’s population in some of the poorest developing nations,” NFF CEO Matt Linnegar said.

“Australian rice growers play a major part in helping to address the issue of global food security. At a time when this critical issue means all Australian farmers need to become more productive in order to grow more food with less resources, this tax could severely affect Australian rice production,” Mr Linnegar said.

The research shows that under a carbon tax price of $35 per tonne, five years after the introduction of a carbon tax, a typical Australian rice grower would stand to lose seven percent of their net farm income.

President of the Ricegrowers’ Association of Australia, Les Gordon, said the tax will hurt an Australian rice industry already facing further substantial cuts to irrigation entitlements.

“Despite the likelihood of full water allocations this season, the rice industry faces significant challenges in a future with less water available to grow rice, and a difficult task to remain internationally competitive with the high Australian dollar affecting our export-reliant industry,” Mr Gordon said.

“The last thing we need is another increase in the cost of growing, milling and transporting our rice, but this is exactly what we are faced with under the introduction of a carbon tax.

“And fuel or no fuel, the industry still faces a huge cost increase from the electricity required to mill rice. These costs will ultimately be borne by the mill’s suppliers and owners – rice growers.

“Our industry contributes $800 million a year to the Australian economy and is the lifeblood of many communities in the Riverina. We are vital to this region, but this tax makes our situation extremely difficult. We share the NFF’s opposition to the carbon tax,” Mr Gordon said.

The fifth research paper in the series developed by the AFI, 'The impact of a carbon price on Australian farm businesses: rice production' is available below.

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