The numbers are being crunched, and cane growers are worried at hikes being proposed to some of their largest costs - water and now electricity - and what that means to their future viability.
Peak group CANEGROWERS says electricity prices and tariffs announced today for the coming year will knock many growers for a six and, on top of the torrent of proposed water price hikes, are likely to force many out of farming and off the land.
"This is a double whammy; coming on top of hefty irrigation water price hikes recommended by the Queensland Competition Authority (QCA) recently, which if implemented, will increase the cost of irrigation in some parts of the State by as much as 48%. Regulated retail electricity prices released by QCA today estimated increases in network charges for Ergon and Energex at 15.7% and 11.3% respectively," says Steve Greenwood, CEO of peak group CANEGROWERS.
Water and electricity are a huge cost for the majority of farmers. "Hikes in the cost of electricity will now also play their own part in increasing pumping costs for irrigators, and furthermore will escalate the cost of running Sunwater. These costs will be passed directly back to growers -affecting the 70% of cane growers who irrigate up and down the coast.
"Just weeks after learning of a torrent of proposed water prices hikes, this will be too much for some growers - CANEGROWERS has crunched initial estimates and believes this will be the last straw for some cane growers," says Greenwood.
"If agriculture is to be a pillar of the state's economy and meet the Queensland Government's objective of doubling food production by 2040, large costs to farming cannot be suddenly imposed on the sector."
CANEGROWERS says growers have no means to pass those costs on. "Sugar is 80% exported and the price we receive is set on the very competitive international market. Any additional costs at the farm gate are picked up by growers - this rips profit directly from sugarcane growers' bottom line - and undermines our international competitiveness," says Greenwood.
CANEGROWERS says while hikes of 10-15% are shocking, when you factor in the impact of the carbon tax as well, we are looking at an enormous impact on farmers.
The Queensland Farmers Federation told media today that the QCA says the carbon tax will increase the underlying cost of energy by 43%. While electricity bills won't increase by that amount, it shows the underlying pressure that the carbon tax will put on electricity bills.
"The impact of the carbon tax on the QCA determination is a worrying signal that the broader implications on agriculture are not being considered. Let's not shy away from the fact that, in its current form, the carbon tax will have a very substantial and destructive impact on farm profitability," says Greenwood.
|
