The Federal Government today set a target of a 5-15pc cut in emissions by 2020, with the levels to depend on global agreements.

But NFF president David Crombie says the CPRS will still cause significant pain to businesses.

"It could potentially cripple Australia's food production, hinder our self-sufficient food supply and drastically slash our global competitiveness, adding excess baggage to our $30 billion a year export sector," Mr Crombie said.

"Once the scheme is in place, farmers' energy-dependent costs will rise exponentially.

"The processing sector will face higher costs that will undoubtedly be passed back to farmers and on to consumers.

"That's bad enough but, as things stand, our trading partners will not incur the extra costs imposed on us under the CPRS, which means it will be much harder for us to compete internationally.'

To avoid this scenario Mr Crombie said a "comprehensive and all-inclusive" global agreement was essential.

The soonest such a global agreement could be reached is next year and the higher the global target the greater the implications for Australia's rural sector.

"According to federal Treasury modeling, the Government's 5-15pc emissions reduction target by 2020 is likely to spark an expansion of between 5.7 million and 26.3 million hectares of plantation forestry in Australia," Mr Crombie said.

"That means less land to produce food.

"Given a CPRS is not appropriate for agriculture and, indeed, may never be, the Government must look outside the square at how it can facilitate ongoing, and even greater, food production in a carbon constrained economy."