Farmers brace for carbon tax hit

Farm lobby groups remain wary as the Gillard Government prepares to release details of its carbon tax this Sunday ahead of the five-week winter recess.

The agreement between Labor, the Australian Greens and independent MPs will deliver a fixed price on carbon starting from July 1, 2012 followed by an emissions trading scheme from 2015.

Snippets of the carbon tax policy have been released over the past few weeks despite repeated calls for full disclosure.

Fuel for households and small business has been excluded and more than half the revenue will go to compensating nine out of 10 households for higher prices.

The remainder of the revenue will be used to shift high-polluting industries to cleaner technology, and assist industries such as steel-making.

Climate Change Minister Greg Combet said there would be one meeting of the multi-party climate change committee this week before Federal cabinet approves the scheme .

“(But) we’ve certainly got enough confidence to go ahead with the announcement of all the details on Sunday, ” he told ABC Radio.

Mr Combet is confident the final package will become law with the support of the Greens in the Senate, and key crossbenchers in the lower house.

The agriculture sector is under no illusion it will face soaring energy related costs for electricity, fertiliser and particularly fuel, despite being told in February it would be excluded.

The Carbon Farming Initiative will give producers some respite, but the Victorian Farmers Federation (VFF) says producers will be hit by the tax when they transport product to market.

VFF president Andrew Broad said including diesel in a carbon tax would significantly push up the price of food given the role of transport as one of the key components of the supply chain.

National Farmers’ Federation (NFF) president Jock Laurie said many of the things farmers relied on in rural and regional areas had a fuel component.

Cattle producers have their hackles raised, saying if fuel used in agriculture production is included, they could be slugged an extra $7000 in costs every year.

Beef producers in northern Australia, already reeling from a Government ban on live cattle exports to Indonesia, will also be hard hit.

But the Government is refusing to say how the carbon tax will affect heavy transport.

The Australian Trucking Association wants an all or nothing approach — all trucks to be exempt along with cars or a fuel tax for everyone while the Transport Workers Union is threatening civil disobedience.

The Greens have also called for a productivity commission inquiry into fuel excise.

Last month, climate economist professor Ross Garnaut called for the carbon price to start at $26 a tonne but it could range between $20 to $35/t.

Recent studies conducted by the NFF found that under a $35/t carbon tax, WA sheep farmers will pay an average of $9100 in extra costs.

The Australian Farm Institute says if carbon is priced at $23/t, it will cost WA grain farmers an extra $24,171 for inputs.