Thursday, 28 June 2012
As of this Sunday, 1 July, the Australian economy will have a carbon tax. Initially carbon will be priced at $23 a tonne, and it is predicted to go up from there. IBISWorld released a report on the carbon tax and Australian industries on 26 June 2012. This report found that, even though agriculture was initially exempt from the carbon tax, the agriculture industry will be damaged by the carbon tax in the 2012-13 year to the tune of 6.4 per cent, going up to $50 billion in years to come. The carbon tax will affect farmers, even though agriculture is exempt, through energy costs, fertiliser, chemicals and packaging. Indeed, I had a correspondence with a poultry farmer in my electorate, in the town of Gilgandra, who is facing increased costs packaging their eggs because of the costs imposed by the carbon tax.
There has been a lot made of the Carbon Farming Initiative, but I have to say it is proving to be a very, very inadequate program just in implementation. For instance, there is a 15 per cent rebate for zero-till equipment purchased after 1 July. Zero-till equipment basically comes in the form of ground-engaging tools that can place the seed into the undisturbed soil through thick stubble cover for minimal disturbance. That is the ground engaging. That is the tool bar part of it. It is generally accompanied by an air cart that carries the seed and fertiliser and, through a system of blowing air, blows the seed around this machine. But the Australian Taxation Office have decided that, to obtain the 15 per cent offset for your no-till equipment, you actually have to purchase the air card as well. So people can understand, this is like having a rebate of 15 per cent on a caravan but you can only get that if you purchase the car to pull it. What has happened is that many people do have adequate air carts and only need to purchase the tool bar itself, but therefore they are exempt from this. It is just a crazy thing for a farmer to have to spend an extra $50,000 to $80,000 on an air cart when they do not need to. So most of these people are exempt from this.
Much is said about carbon farming, as if this is some brave new world. I have to say that my brothers and I were doing work with the New South Wales Department of Primary Industries back in the late seventies, when Roundup was first invented, with zero-till farming. This is something that has been going on for nearly 40 years, largely due to the work of Sydney university and a chap by the name of Jeff Esdaile at Livingston farm in Moree. It has become pretty well the norm and is widespread across the wheat growing areas of Australia. The driver for zero-till farming is obviously to increase the organic material in the soil and to reduce the loss from erosion, whether from water or wind. Organic material basically is carbon. So the driver is an agronomic one, a production one and ultimately an economic one because since farmers have been undertaking zero-till farming, they have been producing many more kilograms of grain per litre of diesel than ever would have been thought of in the past. The idea that farmers would go into this to make money to trade carbon is a false one. The production and the savings will always outweigh what they make from the carbon, and certainly there will not be enough money made out of trading carbon to offset the increase in fuel costs.
The other one is the irrigation industry. With a lot more systems being piped, the energy costs are going up. For farmers now, it is not so much the cost of the water but the cost of the electricity that is restricting— (Time expired)