Agriculture to be excluded from CPRS

Posted by Daniel Palmer on 16th November 2009

Farmers are to be exempt from the planned emissions trading scheme, with Labor agreeing to the Coalition request for an exclusion of agriculture from the scheme.

Horticulture organisation Growcom welcomed the Federal Government’s announcement, with Chief Advocate Rachel Mackenzie saying the decision was a significant concession and a win for the agricultural sector.

“This is a real win for the horticulture sector as we really didn’t need an extra cost imposition that would have very little benefit in terms of emissions and would be hugely costly to administer,” said Ms Mackenzie.

However, she said the exact details of the agreement remained vague.

“There are still some issues that need to be investigated in the days ahead before we can work out the implications for horticulture,” Ms Mackenzie advised.

Ms Mackenzie said that agriculture’s exclusion from the CPRS did not mean that the sector would not be affected by the scheme and growers would see an increased input cost of electricity, fuel and fertiliser which they would find difficult to pass on down the supply chain.

“To compensate food producers, an agricultural offset scheme should be introduced as has been the case in countries overseas,” she suggested. “The government has indicated that it will examine options for an offset scheme that will allow farmers to participate in the carbon market, but there are no details on how this scheme might operate.”

Negotiations continue

Prime Minister Kevin Rudd said that the concession did not mean the legislation had the support of the Opposition but noted progress was being made on a compromise agreement.

“The reason why we’ve done what we’ve done on agriculture is to underline what we’re on about here – which is good-faith negotiations,”  he said.

Nationals leader Warren Truss believes the concessions need to go further, with his party still indicating a lack of support for the government’s legislation.

“Labor’s CPRS will add greatly to the costs of dairy processing, sugar refining, abattoirs and food processing, making Australian food less competitive on export markets,” he claimed.