As someone who spent 30 years in the Senate, I am generally suspicious of anyone who claims to be able to predict the future.
My view is that the future will come soon enough. But I may have to make an exception.
I am convinced Labor’s reckless approach to climate change policy is a potential calamity for Australia’s agricultural sector.
Now I know there will be some sceptics who will dismiss me as a former Nationals senator incapable of an objective view on Labor’s policy.
I accept that. But I have always been known as a straight shooter. And numbers don’t lie. And the numbers have got me worried.
Let me explain. Take Labor’s commitment to reduce Australia’s greenhouse gas emissions by 45 per cent by 2030.
That pledge will impact on agriculture in three ways.
Farmers use electricity, which generates 34 per cent of Australia’s CO2 emissions; farmers rely on transport, which generates 19 per cent of Australia’s CO2 emissions; Farmers grow livestock, crops and use fertiliser, which collectively account for 13.3 per cent of Australia’s CO2 emissions.
In other words, farmers are directly exposed to sectors that account for 66.5 per cent of Australian emissions.
And under Labor’s plan, emissions in these sectors must be virtually halved between now and 2030. So how hard will that be?
Think about it like this. Despite the billions of dollars spent on federal and state renewable energy subsidies, feed-in tariffs and fuel efficiency measures over the last decade, Australia’s emissions in these three sectors combined have not fallen by a single tonne since 2005. Not a single one.
Labor says, without a scrap of proof, we are going to halve emissions in three sectors in 12 years without any impact on the farm sector. Really? What analysis has been done to test the impact of such reductions on Australian agriculture?
Some will counter that farmers aren’t big users of electricity or transport. Not true. A study last year by the Australian Farm Institute (AFI) found electricity and fuel costs Australian agriculture $5.8 billion annually. That’s about 9 per cent of the gross value of farm production, and rising.
For the sugar and dairy sectors, the energy share of overall costs is 16 per cent and 13 per cent respectively. The scale of these costs has prompted the AFI to warn that Australian agriculture “is rapidly becoming uncompetitive against countries with cheaper and more reliable power.”
Now does anyone really expect energy and transport costs will get cheaper if we try to achieve savage reductions in emissions in these sectors in the next 11 years?
Let’s start with electricity, which cost the farm sector about $2.4 billion last year.
The renewables lobby argues that solar and wind are cheaper than all other energy sources, however, despite tens of billions in subsidies, they still only work about 25 per cent of the time. That means back up is necessary for the rest of the day.
A recent study in the Energy Policy journal noted in Germany, utilities have to install 8 MW of back up for every 10MW of wind installed.
You don’t have to be Einstein to work out if you have to double the amount of installed electricity capacity just to meet fixed demand, then your power bills are heading north.
And Labor has admitted that transport and the farm sector sector will face major emissions reductions. When asked last year whether Labor’s 45 per cent emissions cuts would apply to agriculture and transport, Mark Butler said “that’s right.”
But Mr Butler hasn’t said how he is going to slash transport emissions.
On current projections, Australia’s transport emissions will be 35 per cent higher than 2005 levels by 2030.
It is not immediately clear how a Labor Government – or any government - is going to reduce transport emissions by 45 per cent below 2005 levels by 2030, without driving the economy into the ground.
As the National Farmers’ Federation has warned, if transport is hit with emissions cuts there will be flow on effects to agriculture, not least because food makes up 25 per cent of Australia’s road freight task.
And it is not clear how Labor is going to reduce agriculture emissions without reducing the national livestock herd. Don’t rule out some very bad ideas. After all, it was Labor’s Garnaut inquiry 10 years ago that recommended replacing lamb with kangaroo meat to cut emissions. And Labor’s agriculture spokesperson, Joel Fitzgibbon has already warned that “a brake on further land clearing is crucial.”
The inevitable consequence of Labor’s target is higher energy and fuel costs, pressure on land clearing and a reduced national herd.
Even just a 30 per cent rise in electricity costs and a 5 per cent rise in fuel costs will cost the farm sector $859 million per annum.
According to the AFI, such increase will cost the beef sector $211 million annually, the chicken meat sector $164 million, the dairy sector $98.5 million, the grains sector $102.2 million and the sugar sector $56.4 million.
Despite my reluctance to make predictions, don’t say you weren’t warned.
- Ron Boswell is a former Nationals senator for Queensland and former Nationals Leader in the Senate.