Australian rural industries are facing a major hit to their international competitiveness under the Federal Government's emissions trading scheme, according to the Queensland Farmers’ Federation.
QFF chief executive officer John Cherry said that while emissions from farming operations would be initially excluded from the ETS, the price of inputs would rise adding sharply to costs.
"With 70pc of agricultural produce being exported, there is no opportunity to pass these costs on and farmers will have to absorb a major reduction in their margins as a result," he said.
"We are calling on the Federal and State Governments to urgently commission detailed research on the cost impact on farming enterprises of the impact of the ETS on inputs, and what that will mean for competitiveness and profitability."
Mr Cherry said that for cropping enterprises around 75pc of all emissions come from inputs such as fuel, fertiliser, chemicals, electricity and transport, which will all be included in the ETS from day one.
"Yet, other than a fuel rebate on fuel used on farm, we will have to cop all increases in costs without compensation, even though most rural produce is exported," he said.
"On a $40/tonne carbon price, farmers will face a cost increase of 4-6pc, enough to wipe out the very narrow profit margins for many industries."
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