Wellington, March 18 NZPA - New Zealand's first steps into an emissions trading scheme (ETS) on July 1 will start a "lonely, delusional and badly-timed odyssey" that will cost the country dearly, Federated Farmers says.

The federation president, Don Nicolson, told the Australian Farm Institute's agriculture and greenhouse emissions conference in Adelaide that ETS path was "greenicide": intentionally ruining an economy by slavishly following green policies led by zealots.

Advocates of the emissions trading -- which will effectively cap the amount of emissions manufacturers and other businesses can discharge and allow them to trade carbon credits to make up shortfalls in their cutbacks -- was an audacious branding exercise, he said today.

"Other nations will be powerless to resist New Zealand's underlying logic with our goods sailing -- but not, of course, flying -- out the door to buyers willing to pay more for carbon neutrality," said Mr Nicolson.

His farmer lobby has sharpened its criticism of the ETS in the wake of Australia's postponement of its scheme from July 2011 for at least three years.

Agriculture accounts for just 16 percent of Australia's emissions, but 48 percent of New Zealand's.

New Zealand critics, such as ACT MP John Boscawen, have said the scheme on this side of the Tasman will boost the cost of electricity by 5 percent and lift the price of petrol by 4c per litre.

But Prime Minister John Key has ruled out delaying the introduction of the ETS, saying despite concerns from businesses the introduction was likely to go ahead in July. He has warned farmers trade rivals will be quick to point out any perceived deficiencies in the sustainability of New Zealand produce.

"You've got no option -- if you don't deal with it, you will be punished," he told them this year: "The consumers of the world will not buy your products."

Transport fuels, electricity production and industrial processes industries were scheduled to come under the ETS on July 1.

Though farmers have been exempted from having to pay for on-farm emissions until 2015, Mr Nicolson said the first year of the ETS will indirectly cost livestock farmers at least $87 million, and that did not count the impact on horticulture, plantation forestry or fishing.

"We know the ETS will, from July 1, add $17 million to the cost of dairy farming, $16 million for sheep and beef farmers and $5 million to the cost of arable farming," he said.

"That's the 'trifling' impact of just these fuel and electricity increases".

The Fonterra cooperative expected its annual cost of processing to rise by $38m from July and the federation estimated the impact on the meat processors would be more than $10m.

It was not known how the ETS would impact on the $12.5 billion worth of goods and services farmers bought each year.

Mr Key had predicted the annual cost of the ETS per farm from 2015 would be $3000 for farm-based methane and nitrous oxide emissions, but this did not take account of the immediate impact this year on $866m worth of fuel and electricity consumed by farms, or increased costs in the other $11.6b of farm inputs.

Mr Nicolson said the "huge gamble" was whether overseas consumers will pay more for NZ exports, when New Zealand farmers were the only ones that looked like having to account for the emissions from their livestock.