ETS: Taxing cows for doing what comes naturally The Australian

Destined for front page, pulled at last minute and a cutdown version run on inside page...

John Stapleton

It all boils down to one simple question: will cows be taxed for burping and farting?

The complex debate about the introduction of an emissions trading scheme to tackle climate change is causing panic amongst farmers across the country.

Every single major farming organisation, including the National Farmers Federation, the Australian Farm Insitute, NSW Farmers and Agforce in Queensland, has expressed serious alarm over the threats an ETS poses across the $100 billion farm sector.

Australia is likely to become the only country in the world after New Zealand to impose an ETS on agriculture. Government modelling in NZ shows farm profitability plummeting to zero.

Cows, which have four stomachs, emit methane in the process of breaking down grasses.

Under calculation methods imposed on Australia by the Kyoto Protocol but strongly disputed by farmers, an average cow is deemed to emit the equivalent of two tonnes of carbon dioxide per year. With 30 million cattle in Australia, that makes cows a major emitter.

Even if agriculture is not included, sharp rises in energy costs will severely impact farm viability.

Agricluture has been determined by the Department of Climate Change to emit 15.6 per cent of all greenhouse emissions - 90.1 million tonnes per year. Of that 59.3 million tonnes are estimated to arise from the digestive processes of sheep and cattle.

For the government an emissions trading scheme for agriculture is a very hard sell, made harder by the fact that many farmers are global warming sceptics, regarding the religious fervour with which city based environmentalists have approached the problem with great cynicism.

Farmers themselves are completely at sea. Chris Griffin, a dairy farmer from Moe in Victoria, said most of his colleagues had no understanding of what an ETS could entail. ``It is very confusing,'' said  ``It could have quite a large impact on some in the industry. The New Zealand experience is very concerning. There is not a lot of science out about what impact we are having.''

Nick Renyard, a dairy farmer from Timboon in western Victoria, said an ETS would have a profound affect but farmers but the government had ignored its responsibility to explain how it would work. ``There are a lot of unknowns out there,'' he said. ``Is the government going to tax cows for burping? We'd all love to know.''

Executive Director of the Australian Farm Institute Mick Keogh said agriculture was dealt with very harshly under the Kyoto rules, measuring only emissions and ignoring the fact animals were ``alchemists'' consuming grass which used carbon as its prime engine of growth. He said the government's scaremongering on climate change, with ministers claiming that agriculture would suffer a sharp decline, was very misleading. In fact forecasts by the Ausralian Bureau of Agriculture and Resource Economics show that under a string of unlikely worst case scenarios, and with no adaption from the industry, there could be a slowing in the rate of growth. Agricultural production would still double by 2050.

``It is absolutely just scare tactics,'' he said. ``The release of the Garnaut report, followed by the Green paper, is all carefully stage managed, beautifully set up so the public will be scared out of their wits and looking for a solution.''

He said the Kyoto system of measurement only took into account the emissions from animals, and not the sequestration of carbon by virtue of the fact they were efficient recyclers of carbon from the atmosphere through their consumption of pasture. The ETS would massively disadvantage Australia, with none of our competitors, including Brazil for beef, Argentina for grain, Asia for vegetables, introducing a carbon price on agricultural products.

The National Farmers Federation joined in the chorus of concern yesterday, calling on the Australian government to actively petition for new accounting rules under the Kyoto Protocol to ensure agriculture's sequestration of carbon was acknolwedged and its rigid and short-sighted accounting rules, which emphasise reforestation but ignores pasture growth, were overthrown. President David Crombie said a ``full and sober analysis of how Australia will be impacted is essential'' to ensure farming was not hamstrung. ``While farming's emissions are counted, the provisions to acknowledge our sequestration are completely inadequate,'' he said. That means Australia would foot a much higher bill for its net emissions than it should.

NFF's Chief Executive Ben Fargher said Australian agriculture could be ``significantly, disproportionately impacted'' and it would be destructive to impose an Australian ETS totally in line with the Kyoto agricultural rules.

``Our farm sector is responsible for 12 per cent of GDP, 1.6 million jobs, $30 billion in exports and 93 per cent of our daily domestic food supply, and it could be absolutely devastated if the ETS isnt geared to account for the positive part agriculture plays in the carbon cycle.''

He said with our emissions efficient farm systems, Australia risked destroying the sector's competitive capacity, as international buyers would source their sheep, beef and grain from less efficient countries, thereby ``making the climate emissions situation globally worse while hurting Australian farmers.''

``Farmers are very concerned about the impacts on Australias food production,'' he said. ``The international rules are skewed against us, which is unacceptable and completely counterproductive. Our Government must not make the mistake of mimicking Kyotos flaws  we must design our own ETS to reflect Australias priorities and interests.''

Agforce president Peter Kenny said economic modelling suggested input costs rising by up to 45 per cent for cropping enterprises and at least 15 per cent for livestock operations, even without agriculture being included. ``Increases of this scale would make many producers unviable and will certainly drive up the prices paid by consumers. No sector is more exposed than the nation's farmers.''

The New Zealand government is in the final stages of introducing an ETS. An analysis of the impact by the NZ Ministry of Agriculture estimates that a carbon price of $50 per tonne of CO2, a figure projected as plausible by economists, would decimate the industry. Profitability for greenhouse tomatoes would go backwards by 193 per cent, sheep and cattle by 160 per cent, deer farms by 199 per cent and dairy farms by 123 per cent. The only sectors not to suffer massive losses would be those without livestock, such as wine grapes.

Richard Clark, spokesman on climate change for the NSW Farmers Association, said farmers should be alarmed. ``An ETS will massively increase costs and have a substantial impact on the profitability of farming. There is the potential for this to be catastrophic.'' He said with no technology capable or stopping cows from burping, and in fact existing research money being diverted to a range of climate change causes, the only effective way to cut greenhouse emissions was to decrease production. ``The crucial points for us is that there is no hard objective data or measurement tools for emissions or sequestration; and until we get that then the quality of any ets decision is limited to the guesses of poiticians,'' he said. ``At the end of a ten year drought last thing I want to go into is an auction with country energy or bhp to buy permits for carbon emissions, because they will have deeper pockets than any farmer. Australia and NZ are the only countries in the world contemplating including agriculture in an ETS. Its a dog's breakfast, it's absurd.''

President of Australian Dairy Farmers Alan Burgess said even the basic research in New Zealand predicting farm profitability would drop to zero had simply not been done, creating cionfusion and angst and leading to inappropriate and destructive policy decisions. ``The haste of this process is not a good basis,'' he said. ``I am yet to find any other region of the world which is planning to include agriculture in an ETS. The science is not good, the ability to measure is poor, achieving change is difficult.

``If Australia takes the high ground on emissions trading the end reslt is that agriculture won't be competitive with the rest of the world. Our farming sector is about to be harpooned by a poorly researched and ideologically driven policy decision. The biggest issue there hasn't been a good conversation with the public, there hasn't been work done on industry impacts.

``The government don't know the full consequences, nobody knows. The work hasn't been done.''

President of the Federated Farmers of NZ Don Nicolson said Australia was going down the wrong path by including animal gases in an ETS. He said no matter how strongly they expressed their concerns to government over being the only country in the world to include livestock in an ETS, they were ignored. ``Major industries have tried and tried to tell the legislators and planners that this is seriously going to test NZ's economic well being,'' he said. ``We said it would hugely impact our international competitiveness. This is one of the most far raching economic reforms NZ has ever attempted, it will have a huge impact and we have just rushed into it. As it stands today we are all literally out of business.''