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Queensland Senator Ron Boswell [pictured] writes:
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CARBON SCHEME TO HIT AGRICULTURE COSTS FROM DAY 1
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Farmers will be hit from day one of the government’s Carbon Pollution Reduction Scheme with major increases to power, fuel and fertiliser costs. I raised the issue during the Matters of Public Importance debate in the Senate today.
Approximately a third of total broad acre farming input costs are energy dependant. This includes direct costs such as fuel and electricity, as well as other energy dependent farm costs such as freight, fertilizers and crop contracting. This figure increases to a substantial 45% of input costs for cropping operations.
If our international competitors do not have a similar scheme in place, we stand to lose markets and viability across agriculture.
The Australian Food and Grocery Council have stated that any emissions trading scheme which does not include international emitters represents a real threat to the packaged food and grocery industry.
The Australian dairy industry is highly trade exposed. The proposal to exempt imports from any exposure to the scheme provides overseas companies with a direct competitive advantage.
One abattoir has done the sums on the costs of livestock emissions themselves. At 100g per day over 2 years, each animal would be responsible for 1.679 t co2. There is very little opportunity for the farmer to offset these emissions and the cost will be passed forward through the supply chain to the abattoir.
At an intake of 180,000 hd per annum Rockdale Beef says it would need to purchase $6m worth of permits per annum ($33.60 per hd) and would need to pass the cost onto the customer.
Furthermore, at a stocking rate of 50,000hd, the feedlot would need an additional $840k per annum to offset its emissions due to on site ruminant activity.
As Rockdale make clear in their submission to the Green Paper, this is an untenable situation as Rockdale’s export competitiveness will be lost immediately and/or the farmers growing cattle for Rockdale will be forced out of business.
In addition, they estimate that the impact of the CPRS in 2010 would see the abattoir electricity, gas, fuel and water costs rise by $520,000 which will need to be passed onto export customers.
The NFF are very concerned that the rural sector’s financial capacity to engage in a majority permit auction will be restricted and place financial stress on the sector, from which many may not be able to recover.
Farmers returns in horticulture are already suffering from a flood of cheap imports used in homebrand products on supermarket shelves. Icons like Golden Circle and SPC Ardmona are under great strain trying to compete as it is. Golden Circle has advised growers they will take a third less pineapples than last year.
As the carbon scheme reduces the competitiveness and profits of Australian produce, farmers will simply stop farming. Then our food security will suffer.
It beggars belief that in this time of financial crisis, the Rudd government is going to throw our major industries to the high emitting wolves of international trade. They are sending our exports into world combat with no covering fire.
This is a time when we need all our competitive and financial horsepower to navigate the globe’s economic woes. I urge the Rudd government to delay the Carbon Pollution Reduction Scheme until the smoke clears on the international economic horizon.
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Have Your Say!
Agmates has been saying since July that the proposed ETS is the greatest threat to the viability of Australian Agriculture we have ever seen. We need the Senate to stand up and protect the very survival of our farmers. What do you think?
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