Farmers to cop carbon costs

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FARMERS will be forced to pay for measures to cut their greenhouse gases even if they’re not part of an emissions trading scheme.

The Rudd Government said farming - which will not be part of the scheme until at least 2015 and may never be included - would still have to make an “equivalent contribution” to those industries in the scheme.

This would mean mitigation measures costing at least $25 a tonne of carbon being imposed on farmers, it said.

The revelation came in the Government’s plan for an ETS released this week.

The National Farmers’ Federation warned the move could cripple food production unless the government offset the extra costs imposed on farmers.

NFF boss David Crombie said energy costs would rise “exponentially”, processors would pass on extra ETS costs and trading partners could get a cost advantage.

He said an ETS could also see an expansion of plantations by between five and 26 million ha. “That means less land to produce food,” he said.

“The government must acknowledge the massive cost increases the farm sector will bear and offset these with incentives to reduce carbon emissions.”

The Australian Farm Institute also said farmers faced a big cost hit, with cash margins slashed by 3-8 per cent by 2015. If they then came into the ETS, the costs would be “many times greater”, executive director Mick Keogh said.

The Government said its aim was to cut Australia’s emissions by between 5 and 15 per cent by 2020 over 2000 levels, with the higher target adopted only if there was global action.

The ETS will start in 2010, but agriculture would not be included until 2015, with a final decision made in 2013. This was due to problems in accounting for emissions on more than 100,000 farms and for the complexity of these emissions.

The paper said a “comprehensive work program” would address these issues.

It would include analysis of farming impacts, and how to best measure and account for farm emissions - at farm level or along the supply chain - including a trial held no later than 2011.

If farming was not brought into the ETS, the Government was “disposed to apply mitigation measures that result in costs similar to those under the (ETS)”, the paper said.

At a carbon price of $25 a tonne, “the government would seek to mandate the use of mitigation technologies or practices in the agriculture sector with the intention of achieving a cost of around $25 per tonne”.

The paper said emissions-intensive, trade-exposed sectors would get help to cushion the impact. Higher fuel costs would also be offset for three years.

By David McKenzie