Sunday, January 29, 2012

Dairy A. Denies Denial

Australia’s dairy farmers have been given a cold shower on Climate Change by Dairy Australia. “It doesn’t matter if you believe in Climate Change or not, because it is now a major political and social force that is and will continue to impact on all industries, including dairy,” it says on its website. Many in the farm community have been convinced by those who deny the science of Climate Change. “The physical reality of Climate Change remains is still debatable for some. This will continue to be the case because it is very hard to differentiate small changes to the average climate from the background of large and poorly understood climate variability. However, ‘belief’ in Climate Change is no longer relevant because the very idea of Climate Change, backed up by clearly more volatile weather events, has created its own, overwhelming social and economic momentum. ‘Climate Change’ is fundamentally changing everything from the behaviour of Governments to consumer choices. It has become one of the critical lenses through which every decision must pass – how individuals and industries react will fundamentally their future resilience and competitive advantage.”

Hysterical Predictions

This approach is in contrast to the hysterical response of industry bodies to the Price on Carbon. "Dairy farm families will be slugged $4200 by the Carbon Tax, says ABARES" This is how the media reported it, but ABARES said nothing like it in its report "Possible short-run effects of a carbon pricing scheme on Australian agriculture". This is the worst case scenario. It is based on processors passing on 100% of their cost increases to farmers, which they can't and won't do, according to Fonterra, one of the biggest. Before both processors and farmers take action to reduce their electricity usage, the impact could be as low as just over $1000, says the ABARES report. "In most cases, any cost increases from a carbon pricing scheme will be shared along the supply chain between farmers, processors, wholesalers and retailers, exporters and final consumers," it says. Fonterra confirmed this in October 2011 when general manager for sustainability Francois Joubert said the company will wear its own increased power costs as best it can, without passing those on to suppliers. "It's increasingly difficult for us to pass costs on to our markets, to our customers; it's also difficult to pass costs on to our suppliers. We are in a very competitive milk supply environment and so therefore it's our job to mitigate increased costs within the business and that's our intention."

No comments: