Dairy farmers will be slugged hard by the carbon tax in the short term, with many expected to pay more than $4000 a year in lost revenue and higher electricity costs for the next few years, a government report has found.
The report released yesterday by the Australian Bureau of Agricultural and Resource Economics and Sciences found that among all agricultural sectors, dairy would be hardest hit because of its high electricity use.
While farmers will not pay a carbon price per se, they are likely to be hit by higher electricity prices and freight costs, and lower prices for their produce as big food processors - who make up the bulk of meat and dairy farmers’ sales - pass on their own carbon price costs.
The National Farmers Federation chief, Matt Linnegar, said that the carbon tax slug was one among many issues facing farmers. ”When we’re talking about up to 5 per cent [in losses] for some people … and when you add the high Aussie dollar and a number of other factors, it might be one more thing that tips people over,” he said.
The value of dairy farm production would drop by up to 4.3 per cent, or $4200, in 2012-13 and by up to 4.7 per cent, or $4580, in 2014-15, the report found.
Beef farmers would lose up to 1.8 per cent, or $1100, in economic value in 2012-2013, the report found. This would rise to as much as 2.5 per cent, or $1540, in 2014-15 once heavy road transport is brought into the carbon price scheme, pushing up the cost of freight.
The Treasury’s previously published modelling suggested that farmers may be better off in the long run under the carbon price. A spokesman for the Climate Change Minister, Greg Combet, said the government had excluded agriculture from the carbon price ”in recognition of its role in the economy and environment”.
