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Carbon concessions - but still a cost for Australian farmers

10 July 2011

The National Farmers’ Federation (NFF) has today acknowledged moves by the Government to reduce the cost burden for Australian farmers from the carbon tax and to assist agriculture develop genuine carbon mitigation options through new R&D.

“Over the past three years, the NFF has continually reinforced concerns about the impact this carbon tax will have on Australian farmers and the agricultural sector with the Government,” NFF CEO Matt Linnegar said.

“Confirmation that agriculture will not be covered by the carbon tax, that agricultural fuel will be removed from the scheme, that more than $400 million will be invested into agricultural carbon mitigation R&D and extension, and that support for primary food processors will be provided to transition to a low emissions future, demonstrates the Government has been listening.

“We are pleased to see movement in each of these areas, as well as measures to support non-Kyoto compliant CFI credits and to reward on-farm biodiversity projects,” Mr Linnegar said.

“However, despite today’s concessions, independent research by the Australian Farm Institute over recent months has highlighted that additional costs from electricity and other indirect energy related sources will remain embedded in the carbon tax for all Australian farmers.

“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.

“These costs will erode the competitiveness of the agricultural industry in the domestic and international markets on which we depend.

“As the recent Productivity Commission review highlighted, across the world, countries are developing climate policies that recognise the importance of agriculture and deliberately prevent any additional costs being added into their farmers’ businesses.

“For these reasons, the NFF and our members remain opposed to the carbon tax,” Mr Linnegar said.

“We also remain extremely concerned about the treatment of fuel. While we have today seen that agricultural fuel has been excluded from the carbon tax, we are concerned that heavy-vehicle fuel will only be excluded for a two year period, and that any future review of fuel excise could add additional costs into farm businesses.

“We will be critically analysing the information provided today, and working with all sides of politics to ensure our concerns are heard as the carbon tax goes before Parliament,” Mr Linnegar concluded.

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