HIGHER on-farm and off-farm prices for fuel and electricity would cost the average sheep producer $6000 within five years of introducing a carbon tax.
The additional costs have been projected by the Australian Farm Institute in a report which modelled the impact of three scenarios for an economy-wide carbon price.
The institute took an average Australian sheep farm running 1687 ewes and a flock of 2845 head.
The three scenarios included the introduction of a $20 a tonne carbon tax, a $35.78/tonne tax under a 5 per cent target to reduce emissions by 2020, and $50.83/tonne tax under a a reduction target of 15 per cent.
The modelling assessed the on-farm costs together with those incurred by processors.
Under the lightest of the scenarios, revenue would be cut 10.4 per cent within five years while under the 15 per cent target, the higher costs would amount to 22.6 per cent within five years.
The institute said it was difficult to assess the cost on wool producers because most of the processing was off-shore.