The Federal Government's Carbon Pollution Reduction Scheme (CPRS) White Paper has left many unanswered questions for the agricultural sector in Western Australia.
Agriculture and Food and Forestry Minister Terry Redman said the scheme created several potential problems and would affect the international competitiveness of WA farmers and the food processing sector with a certain increase in costs.
"Preliminary analysis by UWA and the Department of Agriculture and Food researchers suggests that initially under the scheme a typical broad acre farm in WA is likely to experience a reduction of five to seven per cent in farm profit at a carbon price of $20," Mr Redman said.
"The Federal Government must remain focused on global negotiations because until a comprehensive international agreement is reached, our trading partners and competitors will not face these same increases in costs imposed under the proposed CPRS.
"The White Paper confirms that agriculture will be exempted from the CPRS until at least 2015 with a decision on this being made in 2013, but for sectors like dairy and horticulture, which rely heavily on electricity, the costs of doing business are guaranteed to rise.
"An activity like cropping requires fuel, electricity, freight and fertiliser - all inputs that are energy intensive and not exempted from the scheme. This will ensure the cost of production of WA-grown food and fibre will rise.
"The department is continuing to analyse the full impact of the scheme on agriculture in WA and its downstream activities.
"The White Paper may create opportunities for the forestry sector in WA, but this should be balanced against the need to ensure prime farming land is not locked up into carbon sinks for generations.
"I very much encourage farmers to take advantage of any incentives available to plant trees on their property, but I encourage them to undertake this in a strategic manner.
"Alleys of trees integrated into the farming landscape have been proven to create environmental and economic rewards for farming families."
Minister's office - 9213 6700
