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May 30, 2011

Federal Member for Gippsland Darren Chester has welcomed the National Farmers Federation’s decision to reject the Gillard Government’s proposed tax on carbon dioxide.

NFF President Jock Laurie today released new research which indicated that some farmers may face more than $36,000 per year in additional farm business costs under the proposed new tax.

“Labor’s carbon tax will undermine the profitability and sustainability of Australian farms and farming families, without doing anything in terms of the temperature of the planet,” Mr Chester said.

“Our farmers are already under pressure with the high Australian dollar and increased costs of production. Any new tax which makes them less competitive with our international trading partners will be devastating for the incomes of farming families.

“Although this latest research is focused on wheat farmers, the impact on other sectors, particularly dairying, will be very significant if Labor’s new tax is introduced.”

The research, conducted by independent researchers at the Australian Farm Institute on behalf of NFF members and individual agricultural commodity groups, analyses the impact of a carbon price on Australian farm businesses under various scenarios. The first paper, released today, focuses on the Australian grains sector.

Under the scenario of a carbon price of $36 per tonne, the research found that five years after the introduction of a carbon tax, an average WA grain farm would be hit by additional annual costs of $36,882. This is an increase in costs of four percent compared to a business-as-usual scenario and would result in a 13.1 percent reduction of net farm income.

“Australian agriculture has a high level of trade exposure, and any additional costs imposed on farm businesses make it extremely difficult for our farmers to compete in the global marketplace,” Mr Laurie said.

“At a time when Australia needs to increase its food production in order to meet world demand, and Australian farmers are already operating as efficiently as possible in order to stay competitive, these figures show that the tax has the ability to cripple the entire agricultural industry,” Mr Laurie said.

The remaining research papers, investigating the impact of the proposed carbon tax on the sheep, cattle, rice, sugar, cotton, pork and diary sectors will be released as they become available.

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