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Lean, green farming beats oil price rise
23 Aug 2004
Soaring oil prices may be bad news for Australia's farmers, but things could have been a lot worse had they not changed crop-farming techniques for environmental reasons. The trend towards reduced ploughing has cut tractor hours and thus fuel usage. Crop farmers use only about 60 per cent of the fuel they did 20 years ago, mainly due to increased use of no- or low-tillage farming.
Fuel now costs grains producers around $40 a hectare out of gross income of about $400 a hectare. It still remains a major input in agriculture, however, costing farmers an estimated $1.5 billion a year.
Rabobank says the typical farm spends about $20,000 annually on fuel, representing 8-10 per cent of total farm costs. Fuel now costs the average enterprise about $3,000 more a year, due to diesel prices going up 15-20 per cent over the past year. Crunch time will come when harvesting begins, if fuel prices are still close to $50 a barrel.
In June, the Federal Government announced it would extend fuel excise rebates to all commercial users, including many farmers. But the extension doesn't begin until 2008 and won't come into full effect until 2012. The National Farmers' Federation said the Government should consider bringing the start date forward and look at other measures, such as tax incentives and an extension of the energy grants credit scheme.
Australian Financial Review, 23/8/04.
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