carbon tax

Carbon tax misfires

/ dairymilkmaid / 4 Comments

I imagined there would be riots when the average Australian family faced a 10% cut in income as a result of the carbon tax. But for some reason, nobody seems to be making a big deal about it.

I suspect it’s pretty quiet because although mine is a very average family (two kids and a dog), we’re not on the political radar.

The carbon tax is expected to slug us around $5000 per year – a whopping 10% of the average dairy farm family’s income. As reported in The Land and the Australian Financial Review:

The three majors that will pay the new tax from July 1 are already investing in low-carbon technologies but Murray Goulburn Co-operative estimates rising electricity prices will cut the annual income of the average farmer by $5000 a year, The Australian Financial Review reports.

“Profit in the average dairy business in recent years has averaged $50,000,” one MGC general manager, Robert Poole, said. “So that represents a 10 per cent cut. For the average dairy farmer, the tax is going to cut hard into their profits.”

How can this be? Well, because even though I plant 1000 trees or more on the farm every year and have built some of the most carbon-rich soils in the country (up to 22% organic matter content), I cannot participate in the poorly framed Carbon Farming Initiative.

The milk processor we supply, Murray Goulburn, will face increased costs of $10 million per annum and will pass those costs onto farmers – guaranteed. It is guaranteed to do so because MG is 100% farmer-owned so the buck quite literally stops with us. Our fertiliser, fuel and electricity prices will also rise.

Ironically, if MG was spewing out far more greenhouse gases, we might not face this crippling tax because “emission intensive” businesses that export just 10% of their products are considered “trade exposed” and given special concessions. MG exports around half of our milk but because it’s not that “emission intensive” (aka dirty), it misses out on concessions.

Please, can somebody explain the logic behind this?

Farming and the carbon tax

/ dairymilkmaid / 3 Comments
Cow wearing a monitor to detect methane gas production

Cow wearing a monitor to detect methane gas production - pic by DPI Victoria

Donald Rumsfeld could have been talking about the impact of the carbon tax on farming and agriculture when he infamously said:

“Reports that say that something hasn’t happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns — the ones we don’t know we don’t know.”

The politics of carbon are still in full swing and it’s too early to say for sure how we will be affected but there are some things we do know:

1. Agriculture is the second biggest source of Australia’s greenhouse gas emissions – just ahead of transport

2. Much of current best-practice farming minimises emissions

In a recent study (see link at point 2 above), Department of Primary Industry researchers say:

“We calculate, therefore, that in 1980 an Australian dairy cow emitted approximately 33 gm of methane for each litre of milk produced. But, in 2010, because of better feeding practices, genetic improvements, higher per cow milk production, and efficiency improvements adopted by the Australian dairy industry, this number has fallen to approximately 24 gm of methane per litre of milk produced.”

Great news! We are doing well, you say? The only problem is that until science provides us with some more tools, we cannot achieve a lot more. As the researchers go on to say:

“As a greenhouse gas, methane is about 25 times more powerful than carbon dioxide and methane emissions from cows constitute about 65 per cent of the total dairy farm greenhouse gas emissions.”

Meanwhile, as Neil Lane of the Carbon Ready Dairy Demonstration Project notes:

“Highly digestible feed and cereal supplements, along with products like Rumensin, are the best way to minimise emissions at the moment. Many dairy farmers are already doing this.”

This may be why agriculture has been excluded from the carbon tax, although our inputs, like fertiliser and fuel will not be exempt. On the other hand, the much-touted Carbon Farming Inititiative seems equally as impotent to this dairy farmer.

Reforestation and revegetation isn’t really an option because each planting needs to be at least 2ha and 10 metres wide. Soil sequestration sounds wonderful but the fact is that the rich fertile soils of dairy farms are generally already high in carbon content. The other options of reduced fertiliser emissions and effluent management are already being practised on our farm and, as I understand it, would therefore be ineligible under the CFI.

Will be interesting to see how it all pans out and I would love to hear from anyone who sees lots of emerging opportunities for dairy farmers to actively participate in the carbon economy.