IT’S FAIR to say most Australian farmers aren’t elated at the prospect of a carbon tax.
In particular, energy intensive industries such as dairy have real concerns abut impacts on competitiveness.
However, its passed the Lower House and its likely to pass the Upper House when it comes up.
Like the GST, once it is enshrined in legislation, it will be a logistical nightmare to repeal – so the hard facts are that a carbon tax is likely to be here and its likely to be here to stay.
So the onus is now on the Australian agricultural industry to do what it does best – adapt to change.
Rather than sending out a prayer to Saint Jude, patron saint of lost causes, and staging a glorious, but ultimately futile attempt to stop the legislation getting through, I hope farm leaders can accept the news and work to get the best deal possible for agriculture.
Let’s compare recent examples. The dairy industry saw the writing on the wall with deregulation and accepted a $1.74 billion adjustment package.
The wheat industry fought tooth and nail against the removal of the single desk and came away with nothing.
Sometimes its best to pick your battles, and its clear that a carbon tax is something no amount of lobbying is going to remove.
So where to in the new farming landscape?
First of all, there will be opportunities available, as there are during any period of change.
In the grains industry, for example, farm groups should be working as hard as possible to win government funding for upgrading rail.
It would look bad from a government supposedly looking to cut emissions to continue to allow more and more grain to be carted by road, rather than investing in the far more environmentally friendly and efficient rail system
Surely the time is ripe to work for some much needed funding for rail improvements that will allow more grain to go by rail, which will ultimately result in more money in growers’ pockets through cheaper freight rates.
There will also be government initiatives that could benefit growers, such as a 15pc off-set for all purchases of no-till seeding equipment, which has been deemed to be a low emission option, compared to conventional cropping systems.
And onto the carbon farming initiative.
Professor Richard Eckard, speaking at climate change workshop at Daylesford recently, said there would be a significant amount of money flowing into the agricultural sector, so there’s no doubt there’s opportunities there.
The challenge is to ensure this massive cash investment flows through to grass roots farmers.
Prof Eckard has already predicted that it will be unlikely that independent farmers will participate directly in the carbon market, and that it is more likely to be the sphere of third party carbon offset aggregators.
It will be a long and tedious process researching the ins and outs of a carbon market – but farmers need to learn the ropes if they are to share in the benefits of the CFI.
The last thing the industry needs is to feel the pinch from rising costs on one hand while seeing potential earnings end up in the pockets of savvy carbon marketers.
In terms of the way the initiative is set up, I’m always leery of industries that don’t function without government support. A case in point is the ethanol industry in America which sinks or swims on the stroke of a pen, even the Aussie irrigation is subject to the whims of regulators.
Carbon sinks, either Kyoto approved or not, will require a long-term commitment from farmers and they must be certain of what they are getting into, especially given the science on what constitutes a carbon sink or not changes so frequently.
Storing soil carbon requires a 100 year obligation, so I’d caution against devoting entire paddocks to plantations or the like.
Instead, opportunities present themselves in things like waterway management, native vegetation regeneration in marginal parts of the farm or the establishment of shelter belts doubling as carbon sinks.
It’s a major and scary change to the agricultural sector – but at least there are opportunities there. The task now is to identify them and make sure we get the best out of it for rural Australia as a whole.
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