It speculates that farm cash income for the average beef operation would fall by over 60 percent under a full participation scenario in a CPRS with a carbon price of $25/tonne, or as much as 125pc at a carbon price of $50/t.

The report, On-Farm Impacts of an Australian ETS, prepared by the Centre for International Economics (CIE) quantifies the economic impact of a proposed Australian emissions trading scheme on average farm businesses, with the scenarios used assuming limited adjustments by farmers. Among its conclusions, the reports states that a "credible long-term price of carbon" was essential for farmers to make decisions about the economics of various mitigation options.

It also stresses that much more research is required to explore options available to farmers to reduce on-farm emissions, and that "until such options are fully developed for the farm sector, inclusion of agriculture in the CPRS will only lead to mitigation through reduced activity".

Key findings include:

• Farm costs will rise even if agriculture is not included in the CPRS.
• Profits for all farms would fall, ranging from a drop of $6524 per annum for sugar farms under a full participation scenario at a carbon permit price of $25/t, to $72,111 for beef at $50/t.
• Based on a carbon permit price of $50/t, an average combined beef/sheep operation's cash income would drop by 90pc; an average sheep farm by 78pc; an average dairy farm by 69pc; and an average mixed livestock/cropping farm by 56pc.