Carbon Tax leaves olive growers on slippery ground

The Australian Olive Association (AOA) has expressed real concerns about the impact of the Cabon Tax on the profitability and viability of Australian Olive Growers, aptly questioning if its outcomes might be ‘slippery’ for the industry.

While the Federal Government has stated that on-site farming activities will be exempt from the carbon tax, non-exempted inputs have the potential to significantly impact on the cost of producing prized olive oil in Australia.

The AOA represents Australian olive growers who, this season, produced around 17 Million litres of olive oil. AOA Chief Executive Officer Lisa Rowntree said she was viewing the details of the Carbon Tax with caution and concern.

“At the moment the olive industry is feeling the effects of a high Australian dollar and low olive oil prices. The high dollar is making it difficult to sell olive oil locally and overseas.

"Also the unscrupulous behaviour of some European traders is distorting the price for not only Australian growers but also genuine olive growers from around the world,” says Ms Rowntree.

“At the same time Australian producers are also being squeezed nationally by the big supermarket chains.

“This year we have been encouraging growers to reduce their environmental footprint and enhance competitiveness by improved practices and reducing input costs so that their businesses are better able to survive the next few years. 

"We have just approved a national R&D levy by a massive 82% ‘yes’ vote nationally. So our commitment to improved practices is really genuine. 

"But I am getting a real message that the application of the new tax will affect essential supplies growers use to produce olive oil, which could have the potential to undermine viability.” She said

The majority of commercial olive orchards in Australia are irrigated and the pumps are either powered by electricity or diesel generators. Producers believe that an extra 10% added to already high electricity prices and the changes in diesel costs will add significant pain to the bottom line of some growers.  

“Australia, due to its distance from overseas markets is already at a geographic disadvantage. The added imposts, together with uncertainties and unanswered questions, has the capacity to further erode our competitiveness and the ability of our local producers to continue as viable employers in regional Australia,” added Ms Rowntree.

The Federal Government is promoting a Carbon Farming Initiative, which encourages farmers to sequester carbon into their soil in exchange for credits which can be sold to polluting industries, but it is still uncertain how this initiative will work or if in fact producers will be able to comply with the complex and unworkable regulations. 

It is also unclear whether the CFI will only apply to new orchards rather than existing ones.

While it has been said that producers will not pay the additional tax in respect of their farm activities such as fertilisers, generators or tractor emissions, there is an air of uncertainty about fuel tax credits and the implications of the changes for the essential trucking activities that underpin Australian agriculture. 

Ms Rowntree said, “We are concerned that “he long term situation in relation to fuel costs is just not sufficiently clear for our producers. The Australian Olive Industry has a strong commitment to improved environmental practices and will support pragmatic measures to protect the environment.”

Ms Rowntree aptly described Carbon Tax detail as “potentially very ‘slippery’ because at this stage it just holds too many uncertainties for an already stressed Australian olive industry.”

Image courtesy of https://www.onfood.com.au

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