Liberal backbencher Craig Kelly has signalled he may cross the floor if the federal government’s energy policy is too onerous.

The government is negotiating with the states and territories to sign the National Energy Guarantee (NEG).

But some Coalition MPs are worried it will do very little to reduce electricity prices and would harm industry.

Mr Kelly joined Alan Jones in the studio, saying the agriculture sector would be decimated by the policy.

“We’re looking at around about the culling of 690,000 dairy cows, the culling of about seven million beef cattle, the culling of around about 20 million sheep.

“I don’t know how you can get around these numbers.”

Mr Kelly says Australia’s abundance of coal is our “comparative advantage” and to “surrender that” would be madness.

“To give that away and just to allow these other countries to eat our lunch Alan is not something that we can just sit by and watch happen.”

Click PLAY below see Craig Kelly tear the NEG apart

Click PLAY below for the full interview