National Farmers Federation president, David Crombie, believes it would be better for farmers if they were "part of the solution" if an emissions trading scheme is introduced, not sitting on the outside of the scheme as some grains groups suggested in recent weeks.
Mr Crombie said farmers "would be up for all the costs" even if they weren't part of a scheme, and being inside the trading system would enable some opportunity to counter cost-burdens like higher fuel, freight, fertilisers and electricity.
Three big players in the grains industry – Grain Growers Association, GrainCorp and Grains Council of Australia – recently called for the exclusion of agriculture from any scheme, adding that delaying a decision on its inclusion until 2013 simply deterred investment and created uncertainty.
Mr Crombie said there are opportunities for farmers if the Government gets the scheme right and sees the farm sector as part of the solution in mitigating climate change "but there are a number of issues which need to be addressed first".
He says a lot more work and research is needed in areas to make carbon accounting rules fairer for farmers.
"We need to understand the science better," Mr Crombie said.
"Under the existing Kyoto measurement rules the emissions are counted but the ability to store and sequester carbon is not counted.
"We really have to look at the whole range of tools that farmers possess for taking carbon out of the atmosphere and putting it back in the soil where it belongs.
"Under the existing rules farmers would have to decrease production, and that would be a perverse outcome at a time of food shortages."
Mr Crombie said if an emissions trading scheme were put in place tomorrow farmers would incur many costs because they rely on many inputs which would all be absorbing part of the costs of being part of an emissions trading scheme.
"So we're going to be hit with the costs, we should be researching the opportunities which are available to counter the other side…where farmers can actually earn credits."