Wong fails to acknowledge farmers’ carbon costs

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Minister for Climate Change, Penny Wong, says the Government has been “up front” that introducing a carbon price “does have impacts”, but she has failed to acknowledge the massive costs farmers are expected to incur even before agriculture is included in the scheme.

Senator Wong says there needs to be impacts from the Carbon Pollution Reduction Scheme (CPRS) “in order to prepare Australia for the challenge of climate change”.

The Federal Government’s emissions trading White Paper released in December stated agriculture would not be included at the inception of the scheme, but the Government would look to do so in 2015.

“A decision on that will be made a number of years from now in 2013 and the reason for that is we want to have the time to work through with farmers, with the agricultural sector the many technical issues about how we could include farmers and this sector in the CPRS,” Sen. Wong said.

“We’re prepared to do the work, we understand a fair amount of consultation will need to occur for government to make a decision on a sound basis.”

She maintained that the Government was conscious of the impact on agriculture.

“That’s why we’ve made the decision as a government to not include agriculture in the early years and to have this consultation process and you’ll recall a number of the measures, such as the fuel tax adjustment and assistance to households can also be applicable to a range of farmers in Australia.”

Economic modelling on the scheme’s impact on agriculture from the Centre of International Economics, and released by the Australian Farm Institute, said the proposed CPRS could potentially reduce the value of Australian agricultural production by $2.4 billion a year by 2020, and $10.9 billion a year by 2030.

Despite this, executive manager of DAFF’s climate change division, David Mortimer, told a Senate hearing on Monday that with agriculture not part of the scheme, it was not going to be directly required to account for its emissions.

“But it is going to be impacted in the scheme. I cannot believe I am hearing this, frankly,” exclaimed Greens Senator, Christine Milne in response.

“I am fully aware the agriculture is not coming into the scheme until later in terms of emissions, but there will be an impact on agriculture, rural Australia—agricultural production—as a result of putting a price on carbon. ”

Liberal Senator Bill Heffernan said dairy giant, Fonterra was a good example of the challenge that Australia faces if farmers are fully included.

He said irrigated dairy farmers would be insolvent if the carbon price reached $40 a tonne, as some industry experts suggest.

“Fonterra are being given a range of exemptions in New Zealand, where they are a cooperative based company,” Sen. Heffernan said.

“They are not a cooperative based company in Australia.

“If the exemptions that they have been given through their manufacturing in New Zealand are not offset in Australia, where does that leave Australian dairy farmers?”