10 July 2011: Carbon tax proposals an $81 million slug on sugarcane alone in next 5 years

Sugarcane growers are looking down the barrel of an $81 million slug for industry over the next five years – an impost that will not apply to any of Australia’s international competitors, says peak group CANEGROWERS today following the planned introduction of a carbon tax outlined by the Gillard government today.

“These are significant costs for an industry that has no ability to pass costs on - a more expensive farming environment in Australia will be a setback to the international competitiveness of Australian sugarcane. It will put us instantly and categorically behind the eight-ball with our major competitors - such as Brazil and Thailand - who are decades away from implementing similar policies,” says a concerned CANEGROWERS CEO, Steve Greenwood.

“The average sugarcane grower will face will face hikes of around $20,000 or 4.7% of running costs over a five year period,” he says.

CANEGROWERS preliminary modelling will be consolidated this week, as the industry scrambles to sift through the detail and what it means for the farming sector.

“There were a raft of programs announced, but we are awaiting advice from the government as to the implications of these. No matter which way you hold this up - we do not see how this will be a positive thing for the industry.”

CANEGROWERS says this makes sugarcane farming far from exempt, and that it will be a blow to competitiveness on the export market – onto which around 80% of Australian sugarcane is sold.

“Make no mistake a carbon tax will impact on the inputs essential to sugarcane production, resulting in large-scale hikes in electricity, water, harvesting, nutrients and ag-chemicals – all big cost items in the business of growing sugarcane,” he says.

“While agricultural fuel is slated to be exempt in the short term, we understand that this could be revised in just two short years. Fuel is a major cost to all farming operations across Queensland.”

Greenwood says at face value the government appears to be sacrificing Australian farming, when the world demand for food production is on the way up. “Studies show that the world will need to double its food production between now and 2050. Australia has a unique place in providing food to the most rapidly growing region – Asia,” said Greenwood today.

CANEGROWERS supports the National Farmers’ Federation opposition to a carbon tax, and will continue to work with the NFF in representing the interests of Australia’s cane growers.