As a new wave of sales pitches for carbon credit schemes builds on the back of Canberra's commitment to cut Australian greenhouse gas emissions 43 per cent by 2030, farmers are urged to beware.
Signing up to a carbon offset scheme may well generate some attractive extra farm earnings in return for setting aside farmland as a carbon sink, but the benefits of absorbing somebody else's emissions could also be more short term than farmers realise.
It may be more valuable ignoring the marketing talk and political chatter for the time being, and saving your farm's sequestered carbon credentials to enhance its own business prospects.
The Australian Farm Institute is telling producers they will be expected to do something to help tackle the national greenhouse emission challenge, but the fast growing carbon credit market will not reward farmers indefinitely.
Nor will the open market be a silver bullet to fix agriculture's climate change problem, which by 2060, if left unchecked, will slash profitability by 40pc to 50pc for Australian grain, meat, wool and dairy enterprises.
Importantly, as food and fibre sector processors and shoppers pay closer attention to emissions created in the crop and livestock supply chains, rewarding farmers who demonstrate positive carbon and biodiversity strategies, the AFI has urged producers to actively weigh up all options.
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General manager, Katie McRobert, said participating in carbon offset trades today may restrict or bypass opportunities to make farmland more productive and have it recognised for carbon sequestration gains in the future.
"Once your carbon credits are sold to somebody else, it doesn't matter how good your farm looks or how carbon neutral your livestock enterprise is, you are not recognised for reducing those agricultural emissions," she said.
"Somebody else, literally, gets the credit for cancelling out their own emissions.
"That could put you at risk of being a liability to a grain or meat buyer, so your position in the market might be precarious."
Ms McRobert said selling carbon offsets to reap payments over a 25-year contract, or longer, was a good way to raise capital to help fund environmentally positive initiatives, including vegetation and pasture regeneration, or to compensate for lower stocking rates.
However, producers had to be alert to the consequences of that lengthy commitment, notably the opportunity costs and the responsibility for ongoing maintenance of the farm's carbon or biodiversity stocks for other parties.
Offset markets were also useful in helping incentivise farm management changes towards carbon sequestration or sustainability goals, but the payments would eventually end.
"Insetting - or keeping carbon credits within your business as well as helping your system's productivity - is something every farmer should be considering," she said.
"Farming is inherently a carbon extractive business.
"Don't assume you are currently putting carbon into your farm soils."
Extractive industry
For example, research into long term carbon loss in northern NSW and southern Queensland cropping soils showed most had less than a third of the soil organic carbon existing in neighbouring remnant vegetation areas.
Regardless of whether or not they liked the politics of it, Ms McRobert said farmers, and everyone else, would eventually be participants in a net zero emissions economy.
"Farming carbon" was also about improving productive systems for the long term and mitigating the detrimental effects of climate change on agriculture.
Accounting for the carbon you are reducing or sequestering will soon become part of business as usual, for everybody
- Katie McRobert, Australian Farm Institute
Promoting organic matter helped farm soils absorb carbon, improving their nutrient content, biochemical energy, water retentive capacity and structural stability, and it reduced erosion and heat extremes.
Although the rate at which farmers could lift productivity and replace any carbon removed by agriculture varied with soil type, rainfall and the commodities produced, "actively putting carbon back into your farming system is always a win-win".
"Don't even hesitate," she said.
"Accounting for the carbon you are reducing or sequestering will soon become part of business as usual, for everybody."
Primary carbon business opportunities open to farmers include government-backed Australian Carbon Credit Units; private market credits bought by local or overseas emitters; sustainability-linked finance; preferential loans or insurance products; carbon-neutral certification and increased farm productivity.
Presenting the facts
Responding to considerable confusion in the farm sector about carbon opportunities, the AFI has lately been presenting the facts at industry events and country halls, and urging farmers to at least "plan to do something".
"While not a long term solution, offsets are still an important step on the road to net zero, provided they genuinely balance out emissions," Ms McRobert said.
"As stewards of natural capital, good land managers could be well-placed in the new economy as preferred suppliers, and as targets for preferential finance."
Additionally, inset strategies to put carbon back into the farm system and keep credits so that work could be accounted against the farm's own business, were effectively "doing more good, rather than doing less bad".
The AFI would soon to release an online carbon opportunities decision support tool developed for AgriFutures to help farmers in this "complex and ever-evolving space".
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