The Federal Government's Carbon Farming Initiative will return very little money to the pockets of dairy farmers who face rising energy costs under the carbon tax.
Prime Minister Julia Gillard has announced in her “year of action” that Australia will have a carbon price from July 2012.
By now, I’m sure farmers have carbon fatigue. This is after four years of debate, two elections, countless reports and inquiries and political point-scoring from all sides.
Meanwhile, farmers are getting on with the job and are hoping that they don’t get caught in the economic crossfire of any carbon policies and programs. Their concerns are legitimate.
We have been told that farmers will be excluded from liability for their emissions under the scheme – in its early years at least – and if we can believe Climate Change Minister Greg Combet, then the Carbon Farming Initiative (CFI) is also a potential win for agriculture via credits for improved farming practices.
However, the industries that QFF represent are all users of high energy inputs such as fertiliser, fuel, and electricity, where the indirect impacts of a carbon tax could weigh heavily on these input costs.
It is worth pointing out that the agriculture and food production sector will, quite rightly, be calling for compensation for increased costs – just as many other sectors will. However, the difference for agriculture is that our farmers are already extremely efficient in their energy use, given that these inputs are too expensive to waste. That is to say, the existing price of these inputs is driving efficiency without any further government taxes.
Likewise, some farm practices cannot be changed. For instance, there is currently no other viable option for machinery operations than to burn fuel. But this puts the government in a quandary as to how it can reduce pollution, but not destroy important industries.
My understanding of a carbon tax and an emissions trading scheme is that the entire policy objective is to change behaviour when it comes to energy use.
What is perplexing, though, is why the politicians in Canberra do not have the spine to implement this reform without dishing out compensation far and wide to various sectors to ensure that these sectors are “no worse off”. If various sectors are compensated for extra costs, then there is no longer an economic incentive for them to reduce their energy use.
To me it is an obvious dilution of the intent of the policy and therefore runs a risk of simply achieving nothing more than creating layers of bureaucracy, a handful of jobs in Canberra – and otherwise putting a handbrake on our economy.
Subsequently, if our trade-exposed exports become less competitive globally, then surely there is even less possibility that the world would follow our lead with carbon legislation. Because, suddenly, other exporting nations will have a cost advantage over Australia and therefore even greater incentive to not adopt
It is entirely possible that sugar producers in Brazil or coal miners in Africa would be ecstatic that Australia – one of their major competitors – is about to make some of its major exports more expensive to produce.
Therefore, farmers will be looking to Ms Gillard for policies that can create real change which encourages low emission technologies and in particular low emission farming systems.
To force a change in production or consumption habits, when there is no alternative to the status quo, would be unfair and cause collateral damage.
Australia needs to have a serious debate about nuclear energy in the context of carbon pollution. Former Labor Prime Minister Bob Hawke is also reported as saying that the issue needs a “full-blooded debate” at the Labor Party conference later this year. If Julia Gillard was serious about creating effective and viable change that could reduce carbon emissions, while also providing large amounts of energy, then she would be leading the debate on nuclear energy.
To have it currently dismissed so quickly is a demonstration about the lack of courage and foresight in this debate at the political level.
Gary Sansom is the Queensland Farmers Federation president.