The legislation would lump a hefty tax bill on meat and dairy processors with costs flowing directly back to the farmgate.

South Australian dairyfarmer Lee McKenzie, Clelands Dairy, Tooperang, says the legislation in its present form would be "the nail in the coffin" for many primary producers.

"We want to play our part in reducing emissions but the ETS is another added worry and at this stage it is another cost we can't absorb," he said.

"A lot of dairyfarmers are struggling to make a profit as it is and this would just tip us over the edge."

He said the scheme would disadvantage Australia's agriculture sector in international markets because other countries were yet to impose carbon taxes on processors.

"We will be at a severe disadvantage on a world playing field and I think the government should wait to see what the rest of the world will do before it uses us (agriculutre) as a punching bag," he said.

The legislation would equate to a $6000 to $8000 cost for every dairyfarmer in Australia and pass on $60m worth of taxes to livestock producers.

South Australian Farmers' Federation president Peter White said the ETS would impose "dramatic" costs on farmers and failed to acknowledge the agriculture sectors' efforts to reduce emissions by sequestering carbon into the soil.

* Extract from a full report in Stock Journal, June 18 issue.