A MEETING of agribusiness leaders in Brisbane today has heard a damning assessment of the Gillard Government's carbon tax on beef export performance.
John Berry, who represents Australia's largest meat processor, JBS, told delegates at the Australian Farm Institute Ag Roundtable conference in Brisbane that the bottom line of the company had come under extreme pressure since the tax's introduction on July 1 this year.
Mr Berry said the export business was at its toughest in living memory due to the historically high Australian dollar, a high cost of production base and rising input costs, some of which had soared as a direct result of the carbon tax burden.
Mr Berry said that as an "energy intensive, trade exposed' business, the meat processing sector should have been eligible for permits by the federal government and offered genuine incentives to develop carbon mitigation projects.
Carbon emitters currently pay $23 a tonne of carbon released in operations with carbon emissions of more than 25,000 tonnes a year.
For Australia's largest abattoir like JBS's Dinmore plant on the outskirts of Brisbane, where it emits nearly 80,000 tonnes of carbon a year, that's a slug of about $3.3 million a year from the combined costs of the carbon tax and higher electricity prices.
Mr Berry has been a long, outspoken critic of the carbon tax, arguing the it will create a two-tiered meat processing industry, with larger-scale abattoirs forced to pay the carbon tax without compensation and smaller operations are left alone.
Mr Berry said it was a cost burden the industry could do without, especially given the current international market volatility where 80 per cent of JBS's Australian product is distributed.
Mr Berry's attack on the carbon tax and his criticism of the Federal Government undermining export performance, comes as Trade Minister Craig Emerson and his department officials cop criticism from the beef industry for a lack of urgency in completing the Australian Korean Free Trade Agreement, which they say puts Australia's third biggest beef export market at extreme risk.
JBS has publicly shown its vulnerability to this year's difficult trading climate, when it terminated its boutique King Island facility in Tasmania in September citing skyrocketing utility and freight costs as the reason for the closure.
Other parts of the JBS business have also come under pressure, all in the southern region of its Australian operations. Another abattoir at Yarrawonga in northern Victoria is shut, as well as the Yambinya feedlot in southern NSW.
In April, JBS Australia shut its Prime City Feedlot at Tabbita near Griffith, NSW which had 63 employees, and downsized its nearby Riverina Beef at Yanco, which employed 95 people.
Processing 1675 head a week across nine shifts five days a week, the Dinmore plant is twice as big as the nation's second largest abattoir and currently emits 75,800 tonnes, although JBS management has a plan to slash the figure to 35,000 tonnes.
Mr Berry said that nationwide, Australian meat processors had already collectively spent $26 million in capital costs for carbon mitigation projects, but most would not a realise return on their investment for at least a decade.
Under a revised Federal government scheme that was brought in after the carbon tax was introduced, processing plants can receive dollar for dollar funding on carbon mitigation projects.
One plan JBS is working on is a $10 million green power scheme for its Dinmore plant. The project would capture bio-gas emitted from decomposing waste products, with the gas then used to power electricity generators at the site.