The National Farmers’ Federation (NFF) and Sheep & Meat Producers Australia have released a report stating that sheep and meat producers in Australia will endure a 16 percent loss in business revenue under the Government’s proposed carbon tax. You can access the full article and report here.
I encourage groups like NFF and for all members of the farming industry to carry out these types of studies however, I believe that this particular study is a little off the mark and I think too early to condem the carbon tax outright. The report does not factor in the revenue that could be derived from the introduction of the Carbon Farming Initiative (CFI) or the future potential of investment flowing to rural communities for low carbon products such as bio energy, biofuels and carbon offsets.
Currently, farmers will not be liable for any direct emissions (i.e. when you start your tractor up and burn diesel or the methane that is released from a sheep or cow when it burps). This may change in the future if the government include us in the proposed carbon pricing scheme and farmers should begin to understand what emissions are generated through their farming practices. Once we have this understanding, we can better begin to manage any adverse impacts that may come with the introduction of a carbon price.
Costs such as diesel, transport and inputs such as fertilisers are where farmers might be hit the hardest as manufactures and processors look to pass on costs. However, it is these same costs and inputs that have a high carbon intensity and with the introduction of a carbon price, farmers have the ability to actually profit from adopting innovative practices and becoming less carbon intensive.
An example of this is the work being done to reduce methane emissions from sheep. The Sheep CRC (CRC for Sheep Industry Innovation) is one such body and as this work progresses, offsets will be able to be generated under the CFI for sheep farmers who can demonstrate that they are reducing methane emissions through changing diet and gut flora manipulation. Click here for details
In terms of farm profitabilty ABARE released a report last year that stated that offsets schemes have the potential to achieve emissions abatement in Australian agriculture and while the effects are projected to differ between sectors, the introduction of a domestic offsets scheme is projected to increase total agricultural production and decrease production costs (adjusted for offsets credits) and have a positive effect on the performance of Australian agriculture to 2030. See full report
Until we see the details of the scheme I really think that we need to keep an open mind about a carbon price and its effect on Australian agriculture The world is moving toward a low carbon economy and we need to move with it. A price on carbon may have an impact on some areas of the rural sector initially but the positives will provide farmers with new opportunities and the ability to achieve real sustainability moving forward.