The Federal Government's climate change green paper could further expose the cane industry to a loss of land to forestry expansion, lobby group Canegrowers has warned.
Canegrowers acting chief executive, Ron Mullins, says that including forestry at the beginning of the emissions trading scheme in 2010, while agriculture is excluded, "may give it an unfair advantage".
"[It] could divert more good quality agriculture land to trees and further distort the market which is a major concern in the sugarcane industry," Mr Mullins said.
The discussion paper proposes agriculture's exclusion from a scheme until 2015, even though the scheme itself will start in 2010.
Despite the time lag, Canegrowers is warning farmers that their finances will still be hit due to the impact on other industries upon which they depend.
Mr Mullins says the agriculture's exclusion is welcomed as the practicalities of measuring, monitoring and verifying emissions still need to be overcome.
But he warns cane growers will feel the impact because they operate in an energy intensive industry.
"Sugarcane growing uses energy and energy-intensive inputs and growers will be forced to pay more with the introduction of a 'carbon pollution or emissions' tax on energy, especially electricity and diesel used for harvesting, fertiliser, transport and water," Mr Mullins said.
"The Government says the impact of the scheme on petrol costs will be neutral for the first three years.
"We'll be seeking detail on how that will apply to existing fuel tax credits applicable to primary production during those three years and thereafter.
"It is a concern that the Green Paper does not explicitly direct new funds towards research and development of low emissions technology, which is at odds with Professor Garnaut's recommendation that 20pc of revenue generated from emissions permits be directed towards such research."