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A carbon price brings food industry to the brink

Senator Ron Boswell has warned that Prime Minister Julia Gillard’s commitment to a price on carbon could permanently destroy the competitiveness of Australia’s largest manufacturing sector – food.

The result could be a collapse in production and the loss of national food self-sufficiency.

The $102 billion Australian Food and Grocery industry today announced its first ever international trade deficit. The industry’s bottom-line has dropped from a $4.4 billion surplus in 2004-05 to a deficit of $1.8 billion in 2009-10.

The global financial crisis; a strong Australian dollar, driving already fierce competition from imports; big increases in input costs for labour; energy and water; and Australia’s long drought, were all cited as contributors to the historic turn-around.

The recent targeting of massive water cuts for farmers in the nation’s food-bowl, the Murray-Darling Basin, is deepening concern about the future of the industry, which now employs 288,570 – down from its peak of 315,000 in 2006-07.

In delivering a report on the state of the sector, Australian Food and Grocery Council chairman Geoff Starr has called for a national debate on the future of the industry to ensure policy settings to “secure its growth and profitability into the future.”

Senator Boswell backed the call, declaring it was difficult to overstate the scale or importance of threats to the industry.

“Many factors impacting on the sector are beyond our control, but we do not have to add to those massive pressures with a carbon price that will flow right through the supply chain, impacting on costs, and prices – every step of the way.

“The price competition from imports from a range of countries, including the United States, and Asia, where there are no serious moves to price carbon, is already ferocious.

“Putting a price on carbon, ahead of action by our competitors, could be the last straw for our competitiveness, at a cost of tens of thousands of jobs – and permanent loss of national food self-sufficiency.

“That would be a national disaster.”

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