WHEATBELTfarmers are not confident of extracting great benefit from the Carbon FarmingInitiative (CFI).
This was theundertone from one of the Wheatbelt NRM’s Carbon Roadshow held in Hyden onSeptember 26.
The WheatbeltNRM also hosted the Carbon Roadshow in Merredin, Bencubbin and Dalwallinu.
While growerssaid it was the first time they had the opportunity to hear unbiasedinformation, many felt there was limited incentive in becoming involved in aCFI.
Keynote speaker,Australian Farm Institute executive director Mick Keogh, said the AustralianCarbon Policy had established a new currency and a new market, which farmershad the choice of becoming involved in.
He saidbasically farmers could earn Australian Carbon Credit Units (ACCUs) through theCFI which they could then sell on the market.
While there weresome opportunities to earn a return from selling their ACCUs, Mr Keogh saidthere were also a number of constraints which would impact the uptake of CFIsby the individual farmer.
He said with theexpertise and detail required to be involved in a CFI, the likely development inthe carbon policy was to come from the large carbon companies decreasing theiremissions.
“For theindividual farmer it could chew up more administration costs than it would beworth,” Mr Keogh said.
“Plus themarketing in the short-term is a very big constraint.
“I think scaleis going to be important.
“If a farmer has500 credits they wanted to sell, it would be like spare change on the floor toa large carbon company who would need five million credits.”
The price ofcarbon a tonne also needed to be considered, according to Mr Keogh.
Initially theFederal Government has set a fixed price on carbon at $23 a tonne, increasingby five per cent a year until 2015, after which the price will become marketbased and fluctuate accordingly.
But knowing whatthe price would do after 2015 was hard to determine.
He said as of2015, the Federal Government would be also limiting the number of AustralianCarbon Credit Units (ACCUs) made available, therefore adding pressure on themarket and presumably pushing the price of carbon up.
But Mr Keoghsaid it wasn’t that simple.
“The FederalGovernment intends to link the Australian market to the European market, whichwill change the stakes again,” he said.
“It will meanthe price of carbon will be dictated by the international market and given thesituation in Europe there is a still a lot of uncertainty.
“Since 2008 theprice has steadily decreased and is now sitting at around eight Euros a tonne($A10-$A11/t).
“Carbon behaveslike any other commodity which growers need to understand before entering intoany carbon farming project.”
Mr Keogh alsosaid it was important to consider the added sovereign risk occurring in thecarbon market.
“This is amarket created entirely by government and subject to rule changes as thegovernment sees fit or as governments change,” he said.
Under the CFI MrKeogh said there were two ways farmers could earn credits, either throughsequestration (removing carbon from the atmosphere) or mitigation (reducingcarbon going into the atmosphere).
He said in bothsystems growers wouldn’t get credits for doing something they were alreadydoing.
In regards to asequestration system, permanence was also a key requirement.
“Sequestrationprojects have to be maintained for 100 years,” he said.
“And theyrequire a caveat on the title to maintain that project.
“Should theproject be discontinued the farmer would then have an obligation to repay allthe credits earned over the life of the project.”
The costs andlegal implications involved in establishing either a sequestration project or amitigation project were also an issue, according to Mr Keogh.
He cited anexample of a single species tree project on 100 hectares (50ha sown per year),which would end up costing about $15,000 just to establish.
“Then you haveto consider the yearly costs, plus the cost of an audit every third year whichwould be about $3000,” he said.
Living Farm research manager Dr Andew Wherrett, Wheatbelt NRM project manager for sustainable agriculture Georgie Troup and Australian Farm Institute executive director Mick Keogh at the Carbon Roadshow in Hyden.
Holt Rock farmer Sarah Mudge.
Hyden farmers John Cashmore and Colin Nicholl.
Hyden farmer Paul Green.