However, if the program is regulated by the US Environment Protection Agency (EPA), as suggested by a 2007 Supreme Court ruling, US net farm income is likely to fall below current baseline projections.

These are major findings of a University Tennessee study unveiled at the National Association of Farm Broadcasting Convention in Kansas City, on Wednesday.

The research looked at how different models of cap-and-trade programs will impact agriculture.

These included the key role envisaged in the US for farming's carbon offsets included under the proposed US ETS but not yet included in the Rudd Government ETS model proposed for Australia.

Professor of agricultural economics at the University of Tennessee and co-author of the study, Burton English, says scenarios analysed include alternative agricultural offset treatments and evaluation of their potential impacts on the agriculture sector.

The study, Analysis of the Implications of Climate Change and Energy Legislation to the Agricultural Sector, emphasises the need for 'a properly constructed program'.