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Old 07-27-2011, 10:58 PM   #1
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Default Carbon Farming Initiative Could Cost Farmers

Carbon Farming Initiative Could Cost Farmers

Wednesday, 27 July 2011

Background

The Carbon Farming Initiative, an expected sweetener in the Carbon Tax deal proposed by the Federal Government, has failed to excite farmers. At a conference held in Fremantle in mid-July, organised by the eastern Australian grain growers’ organisation, GrainGrowers, many farmers expressed anger at the initiative, saying it lacked clarity, would achieve nothing and may actually cost farmers money. The advice given was that farmers should avoid taking part in the voluntary scheme.

Comment

The conference was attended by Western Australian farmers, national policymakers, food buyers and government agencies. Central themes were concerns with feeding the world, grain production and food security. Australia’s leading agricultural experts and international buyers of Australian food products addressed the conference.

Australia’s leading agricultural experts addressed the conference, as well as international buyers of Australian food products.

Speaking on food security were: Dr Michael Robertson, research leader with CSIRO Food Security; Tom Breen, regional WA business manager for Monsanto Australia; and Peter Collins, manager of Agricultural Commodities and Food at the Australian Bureau of Agricultural and Resource Economics and Sciences.

Peter Collins identified four challenges to food security that Australia faces in the future: land availability, climate change, productivity and global trade. Whereas 50 years ago, Australia’s wheat yield per hectare was superior to the rest of the world, today it is half that of other countries. In essence, domestic wheat yields have not kept pace with global yields.

Mr Collins stressed the need for Australian farmers to produce for the higher price market, rather than having ambitious aims to feed the masses. He called for technological transfers from Australia to poorer countries.

The executive director of the Australian Farm Institute, Mick Keogh, spoke on the Carbon Farming Initiative from the Federal Government and the new Carbon Tax. He advised farmers to use extreme caution about becoming part of the Carbon Farming Initiative as, in the long-term, it could cost more than any short-term gains. He said modelling by the Institute had shown that taking part in the Carbon Farming Initiative will only benefit farmers in high rainfall zones. In other areas, the carbon price will have a negative impact on farm profitability. One significant risk is that, in the future, the government may change key parts of the Initiative or even scrap it altogether.

The Carbon Farming Initiative was designed by the Federal Government with the intention of helping farmers benefit from sequestering carbon in the soil or by planting trees. Under the Initiative, farmers will be paid for each tonne of carbon that they sequester.

However, the complexity of the Initiative and the many anomalies, provide a high level of uncertainty. One farmer commented that it seems nothing has been learnt from the mess created by the Managed Investment Scheme, which encouraged farmers to get involved in tree planting and agriculture, regardless of the profitability outlook for the products that were grown.

Last year, Future Directions International warned that caution was needed with the Carbon Farming Initiative (FDI, Strategic Weekly Analysis, 30 November 2010, Carbon Credits Require Caution).

As mentioned at the time, while increasing the level of carbon in the soil is a laudable aim, that will increase the yields on farms and the water holding capacity of the soil, one of the difficulties is finding reliable measures that take into account fluctuations across paddocks and weather variables.

Through the Carbon Farming Initiative, the Federal Government could have won a useful ally in the farming industry.

However, the main beneficiaries from the Carbon Farming Initiative will be the auditors. A non-existent career now, auditors will become a new phenomenon created by this initiative.

Interested stakeholders have until 12 August 2011 to submit comments to the Government on the Carbon Farming Initiative consultation paper.

Further reading:

GrainGrowers:
http://www.graingrowers.com.au/

Carbon Farming Initiative: http://www.climatechange.gov.au/en/g...elopments.aspx



Gary Kleyn

Research Manager

FDI Global Food and Water Crises Research Programme


gkleyn@futuredirections.org.au
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