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Written by Truth About Trade & Technology
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Tuesday, 05 May 2009 16:48 |
The Australian
May 5, 2009
Asa Wahlquist, Rural writer | May 05, 2009
AGRICULTURE would be the industry hardest hit if it were to be included in the emissions trading scheme, according to a report by the Rural Industries Research and Development Corporation.
The report, prepared by the Centre for International Economics, estimates for the first time the cost of the ETS on individual farms. It found there would be cost increases for all sectors, with livestock the worst hit.
Farm cash income for the average beef farm would fall by more than 60 per cent at a carbon price of $25 a tonne, or 125 per cent at a carbon price of $50/tonne.
The income of the average sheep farm would fall by 45 per cent and 78 per cent respectively; the falls in dairy income would be 35 per cent and 69 per cent; and for wheat and other crops 15 per cent and 30 per cent.
Horticulture would suffer the least impact.
Even if agriculture were not included in the ETS, it would still face higher costs for inputs such as petrol, electricity, chemicals and other goods and services, the report says.
Agriculture produces 16 per cent of Australia's greenhouse gas emissions. A decision on whether the industry is included in the ETS will be made in 2013, and it could then be included in 2015.
CIE executive director, David Pearce, said agriculture would face big adjustments if included in the ETS.
He said farmers had several options for adjustment, including changing their product mix or even leaving agriculture, increasing productivity, tree planting, research into reducing methane emissions from cattle and sheep, and increasing soil carbon.
More research was needed on all the options.
Mr Pearce said the report assumed a carbon price was applied to Australian agriculture, "but not elsewhere in the world".
"There just isn't any evidence at the moment that other countries are planning to include agriculture in their abatement schemes," he said.
And it was difficult for Australian farmers to pass on cost increases, because most of our agricultural products were exported, Mr Pearce said.
National Farmers Federation acting president Charles Burke said the report showed an ETS could devastate agriculture.
The scheme "is inappropriate for driving mitigation from the agriculture sector and could decimate the future of Australian food and fibre production".
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