THE introduction of a carbon price now seems inevitable with the passage of the Clean Energy Future bills through the House of Representatives last week.
The bills only now need to be ratified by the Senate next month to come into effect in July next year.
The government intends for the Carbon Farming Initiative (CFI) to provide 'compensation' for the effects of the carbon price.
However, horticultural producers will receive virtually no benefits from the Carbon Farming Initiative in its current form.
Growcom will continue to draw the Government's attention to this fact.
The latest review of the proposed legislation by the Joint Select Committee on Australia's Clean Energy Future Legislation showed that the message is not yet getting through.
This Committee released its final report on the 18 Clean Energy Bills and the Steel Transformation Plan Bill 2011 this fortnight.
In the horticulture sector, the impact will be far from 'modest overall' as the Committee has described.
Growcom dismisses the Committee's suggestion that farmers only need more information about the impacts of the carbon price mechanism to be sold on it.
The Committee did recognise there will be an increase in electricity prices from the carbon price but does not seem to understand how this will affect the horticulture sector more so than most other agricultural sectors.
They also did not take into account other price rises in our sector for inputs such as agricultural chemicals, fertilisers, farm machinery and irrigation infrastructure.
The bottom line is the carbon price will dramatically undercut growers' already slim margins.
Moreover, it is the nature of our industry that growers cannot pass additional costs on to the consumer because there is only a narrow price range within which most consumers would consider the purchase of fruit and vegetables, the routes to market are limited and fresh produce is perishable and therefore the time limited to get it to market for any reasonable return.
All of these factors limit growers' negotiating power with the supply chain.
The committee also ignored relevant information from a number of government agencies and industry bodies about the level of greenhouse gas abatement that can be achieved through the Carbon Farming Initiative in agriculture.
Recent data and reports from the CSIRO, federal Department of Agriculture Fisheries and Forestry and the Department of Climate Change and Energy Efficiency indicate that the realistic level of abatement is quite limited.
Moreover the suggested benefits of the Carbon Farming Initiative and the Conservation Tillage Offset are not available to horticulture.
The idea of carbon sinks made by establishing large areas of carbon forestry is highly impractical on commercial fruit and vegetable farms.
While energy efficiency programs may bring some benefits in terms of incentives for improved fertiliser application or water use efficiency, they are unlikely to counteract the higher costs which will be experienced by growers overall.
Growcom will continue to raise these issues with Government in our attempts to seek appropriate levels of assistance.
- Alex Livingstone
Growcom chief executive officer
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