FARMERS could face a new tax or extra regulation if they are left out of the Federal Government's emissions trading scheme.

And access to soil or vegetation offsets would only be available if world carbon rules are revamped and complex measurement problems resolved.

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It is understood that's the position on agriculture put by the Government in negotiations with the coalition on possible changes to its ETS, also known as the Carbon Pollution Reduction Scheme.

If so, it is likely to torpedo the chances of coalition support for the CPRS, which will be considered by federal parliament later this month.

As part of a raft of proposed amendments, the coalition wants farmers permanently excluded from the CPRS and instead given access to a range of soil and vegetation credits.

It also wants food processors to get more financial protection against the impact of higher emissions costs under the CPRS.

"Unless we get what we want on agriculture, they can stick their CPRS," one coalition source told The Weekly Times.

National Farmers' Federation chief executive Ben Fargher said farmers would also be "gravely concerned" if the only alternative to the CPRS was a new cost or regulation without any extra incentives for positive carbon action.

"We want farmers exempted from having their direct emissions covered by the CPRS," he said.

"But the alternative must be a range of options to promote good carbon management, not just a cost-related crunch."

The Government's current "disposition" is to have farmers covered by the CPRS, which is due to start in 2011, but not until at least 2015 and only if it is cost-effective.

A final decision will be taken in 2013 after a $46 million, four-year research program gives a better understanding of the sector's complex emissions and offsets.

In its white paper on the CPRS last year, the Government acknowledged it would be practically difficult to impose an emissions permit scheme on farming.

But it also flagged that if farmers were left out, there would need to be "alternative mitigation measures" to impose similar carbon costs on farmers to those faced within the CPRS.

It has also said that current world carbon rules effectively prevent Australia offering farmers soil and vegetation credits because we would also have to wear the cost of major carbon "negatives" such as bushfires.