The National Farmers' Federation (NFF) has released its submission to the Australian Government's Energy White Paper, reinforcing the importance of affordable fuel and energy to the long-term competitiveness of Australia's agricultural sector.

"Fuel and energy are among the largest costs for Australian farmers, and the spike in fuel prices over the past decade has had a significant impact on our sector," NFF President Jock Laurie said.

"According to ABARES, the direct cost of fuel and lubricants is around eight to nine percent of all farm cash costs - and the vast majority of that cost is diesel. Including indirect costs sees energy and energy-dependent farm input costs as a proportion of total farm input costs increase to almost 50 per cent for some major agricultural sectors.

"In fact, in just one year, the fuel costs for Australian farmers jumped 12 percent - a significant impact on our competitiveness. This is why we remain ardent supporters of the Fuel Tax Credit scheme, and we are absolutely opposed to any suggestion that the scheme may be scaled back.

"Requiring farmers to pay excise on fuel would be a tax on farm production that will hurt the bottom lines of farmers and the broader economy - it's as simple as that. That is why the NFF is so concerned about any suggestion that the coming budget will adjust the Fuel Tax Credit scheme," Mr Laurie said.

The NFF submission also raises concerns about increased costs of energy emerging from the carbon tax and changes to state utility ownership regimes while warning against future land use issues emerging in the development of new fossil fuel based energy sources.

"With the carbon tax set to be introduced from July this year, farmers will face even greater costs; in some cases up to $10,000 per annum due to increased electricity and fuel costs," Mr Laurie said.

"Energy is shaping up to be one of the major challenges facing the farming sector, which is why our submission to the Government's Energy White Paper outlines potential policies to meet the future energy needs of Australian farmers," Mr Laurie concluded.

The full NFF submission to the Australian Government's Energy White Paper can be accessed via the website