Home' National Farmers Federation : Annual Review 2009-2010 Contents 36 NATIONAL FARMERS' FEDERATION ANNUAL REVIEW 2009-10
meat processing and malt production
While these are substantial concessions, even
so, the NFF maintains that the CPRS in its
entirety would still lead to additional indirect
costs for Australia farmers that outweigh
the potential bene ts for most farmers,
particularly as many of the higher valued
o set opportunities were limited by the
oored international carbon accounting rules.
Australian farmers have little ability to past
these costs on to their customers.
The failure in Copenhagen climate change
negotiations demonstrates the di culty of
gaining international commitment on actions
to mitigate carbon emissions. This on serves to
escalate fears that Australian farmers would be
unreasonably exposed by implementing the
CPRS before a global commitment is achieved.
For these reasons, the NFF did not support
the CPRS legislation and welcomed the
Government's decision to postpone the
reintroduction of the CPRS Bill until 2013.
The failure of the CPRS to pass in the Senate, as
well as waning public appetite for the climate
change debate on the back of the collapse of
will in Copenhagen meetings, precipitated our
Government's willingness to put the issue on
But delay does not mean that the CPRS has
been scrapped. Broad public interest in taking
action to mitigate greenhouse gas emissions
remains and the NFF will maintain that farmers
have a positive role to play in the development
of future policies in this area.
The NFF will strive to ensure that amendments
relating to agriculture are maintained at the
The CPRS is, in essence, a cap and trade
mechanism that looks to place a cap on
national emissions from covered sectors and
requires them to account for their emissions
The National Farmers' Federation (NFF) and
its members were busy during the CPRS Bill
development to manage the risks for farmers,
particularly surrounding the impact of the
scheme on our ability to compete on the
international markets that we depend so
Positively, these discussions led to signi cant
concessions for Australian farmers within the
CPRS Bill in key areas, including government
1. Exclude agriculture inde nitely from the
CPRS -- i.e. farmers would not be required to
buy permits to account for direct emissions
from their production systems such as
for methane from livestock production or
nitrous oxide from fertiliser use.
2. Create an agricultural o set scheme within
the CPRS Bill that rewarded farmers for
abatement on-farm. This o set mechanism
would be a two tiered system with Kyoto
compliant and non-Kyoto compliant o set
3. Provide an additional research and
development investment of $50 million
into the development and on-farm testing
of emissions reduction options, including
biosequestration and livestock.
4. A ve-year $150 million stream of assistance
for the food processing sector dedicated
to funding emissions reduction measures
within the primary food processing industry,
with initial priority given to dairy processing,
time that any CPRS legislation is reintroduced
and that the interests of Australian farmers are
paramount in future carbon mitigation policy
by any of the major political parties.
Meanwhile, the NFF will continue to push
for changes to the international carbon
accounting rules to ensure that farmers can
be recognised and rewarded for abatement
The Australian economy rebounded from the
global economic crisis in the last year with
a return to solid growth. The extent of this
recovery was witnessed in the nal quarter
of 2009 as the Reserve Bank of Australia (RBA)
entered a contractionary phase, attempting
to restrict economic growth and in ation to
within its target range by raising interest rates.
The impacts of monetary policy decisions have
been two-fold for Australian farmers.
Firstly, they have increased farmers' debt
nancing liabilities as the banks pass on
changes to the o cial cash rate through their
commercial loans. Australian broadacre and
dairy farm debt has increased signi cantly
in recent years (by 62% between 2003-04
and 2008-09) as farmers continue to invest
in capital items, such as modern tractors,
machinery and other more e cient farming
technologies, despite lower incomes due to
These debt levels have increased at the same
time that receipts have reached a plateau as
poor seasons have restricted production.
Yet, while these investments in capital works
should hold those farmers in good stead into
the future, recent interest rate rises have hit
hard for those looking to recover from the
Secondly, we should not forget the upward
pressure that rising interest rates also have
had on the Australian dollar as it draws foreign
investors towards our higher yielding currency.
The dollar has consistently hovered around US
Australian agriculture's exposure to
international markets is renowned, exporting
around two-thirds of all domestic production.
Economics and Trade WITH CHARLIE McELHONE
DURING 2009-10 climate change dominated the political spotlight as the Federal
Government's Carbon Pollution Reduction Scheme (CPRS) was proposed as the
central policy pillar to drive carbon mitigation outcomes.
"Australian farmers should have every opportunity to capitalise
on their reputation as one of the world's best suppliers of clean,
green and quality food, and indeed, generate premiums for this
reputation wherever possible"
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