The president of the Canadian Federation of Agriculture (CFA) says the Liberal government's carbon pricing plan will pose both challenges and opportunities for Canadian agricultural producers.

Ron Bonnett says international competitiveness is a major concern, as prices for many agricultural commodities are set globally.

"I guess the reason it concerns the farm community is because of the competitive nature of our business," he commented. "If we have extra cost driven into our production costs then it's going to make it difficult for us competing in world markets."

Bonnett adds the Canadian agriculture industry has already made impressive gains in improving environmental outcomes and is poised to continue to grow sustainably as it supports Canada's economy and rural communities.

The Government of Canada will set a minimum federal price on carbon of $10 a tonne in 2018; which will rise by $10 a tonne until reaching $50 in 2022. The provinces will have a say on how revenues are generated, whether by using a cap and trade approach or by implementing a carbon tax.