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Government report shows carbon tax will cost farmers

21 December 2011

A report released yesterday by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) confirms that farmers will face additional costs under the carbon tax, the National Farmers’ Federation has said.

NFF President Jock Laurie said the report clearly shows that farmers will be slugged with additional costs under the tax, due to higher input costs such as electricity and the potential pass through of costs from the processing sector.

“Months ago, during the carbon tax debate, the NFF released independent research from the Australian Farm Institute (AFI) which showed that Australian farmers were going to wear the cost of the carbon tax,” Mr Laurie said.

“We now have a Government report that reflects the AFI’s findings, showing that farmers, particularly dairy farmers, are going to wear the costs.

“We are the first to acknowledge that agriculture’s direct emissions are not covered by the carbon tax and that concessions have been provided by the Government regarding agricultural fuel, carbon mitigation R&D and extension and rewards for biodiversity projects – however, this does not mean that agriculture will get off lightly under the carbon tax,” Mr Laurie said.

“In particular, we are very concerned about the impact of the carbon tax on other parts of the agricultural supply chain, particularly food processors, and what this will mean for our farmers.

“Food processors are facing millions of dollars in higher costs as a result of the carbon tax, particularly through increased electricity prices, and many have said that the only way they can recoup this cost is to pass it on to their suppliers – our farmers.

“The ABARES report shows that should processors pass on these costs, dairy farmers will lose some $4,200 in revenue, increasing to losses of $4,580 once heavy vehicle fuel is introduced under the tax from 2014.

“We have to question why the Government didn’t release this research from ABARES earlier, so that it could help inform the carbon tax debate.

“We are calling on the Government to make the exclusion of heavy vehicle fuel from the carbon tax permanent, and to give the processing sector the assistance it needs so as to not pass on the costs of the carbon tax to farmers,” Mr Laurie said.

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