Carbon tax to cut farm incomes: Armstrong

The federal carbon tax will be a "direct assault" on regional Australia and will cost farmers three or four per cent of their income, the NSW Farmers Association says.

At the association's annual conference in Sydney on Tuesday, president Charles Armstrong lashed out at the tax.

The impost would be a "huge burden" to the state's agricultural industry and was "one of the biggest challenges affecting farmers and Australia as a nation", Mr Armstrong said.

"As we have repeatedly said to government and in the media, agriculture will suffer increased input costs due to the carbon tax which farmers will not be able to pass on," he told the conference.

"Further, our business partners in the supply chain, from processors to transport operators will also suffer.

"The carbon tax, therefore, is a direct assault on the social and economic fabric of regional Australia, and the government cannot continue to ignore this."

The tax would cost the average NSW grain farmer 3.3 per cent of their income, and the average sheep farmer four per cent, Mr Armstrong said.

"This impact would have been worse, except that the scheme has a two-year exemption for heavy transport fuel," he said.

"Had this exemption not been in place, the losses of income would have been 14 (for a grain farmer) and 15 per cent (for a sheep farmer), respectively.

"This shows the size of the sword hanging over our heads with the inclusion of heavy transport fuel within the scheme by 2014."

Speaking outside the conference, NSW Nationals leader Andrew Stoner, a vocal critic of the carbon tax, said the carbon tax would be "a shocker" for farmers.

"Farmers are going to cop it (through) higher prices, whether that's star pickets, fertiliser, diesel fuel for their tractors, the cost of the tractors themselves," he told reporters.

"What they can't do is recover those higher costs of production by putting the price of their products up.

"We've seen what's happened to the price of a litre of milk, the price of a loaf of bread. Farmers are price takers, they're going to cop it in their hip pocket big-time, up to $11,000 a year estimated for a rice farmer (and) around $3000 a year for a wheat farmer here in NSW."