New tax to hit farms

FARMERS may walk away from the industry because of higher costs due to the carbon tax, growers have warned.

The controversial tax was ratified by the Senate on Tuesday afternoon and means carbon will cost $23 per tonne from July next year.

Farmers, while exempt from the tax, are concerned about the increases in their production costs because of higher prices of products such as fertiliser, electricity and transport.

David De Paoli, the general manager of chilli farm and processing company Austchilli, said he was so apprehensive about the carbon tax the farm was paying to have a complete costing done to assess the impact.

He said the results of the costing would be sent to the Federal Government.

Mr De Paoli said growers would find it difficult to pass the cost on to consumers because the big supermarkets were unlikely to pay higher prices for their fruit and vegetables.

"We are not going to be able to put carbon tax on the invoice," he said. "There has to be a mechanism so we can pass the cost on."

Cane farmer Allan Dingle said sugar growers would be in a similar position.

"Some people are going to be hit harder than others because we can't pass this price on," he said.

"We are going to have to absorb (the cost). If it gets too expensive, people are just going to walk away."

Mr Dingle said if there were fewer farmers out working the land, food would become more expensive.

Prime Minister Julia Gillard said at the Carbon Expo Australasia in Melbourne yesterday that the tax would only have a third of the cost impact of the GST.

"Yet the scale of the transformation it unleashes will be immense," she said.

"Within the space of just 38 years ... our nation will cut nine out of every 10 tonnes of the carbon pollution we would otherwise have released into the atmosphere."

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