Initiative of little benefit to farmers: economist

The Carbon Farming Initiative will do little to benefit farmers, according to Department of Agriculture and Food chief economist Ross Kingwell.

Speaking at last Friday's Australian Association of Agricultural Consultants outlook day, Professor Kingwell explained the potential impacts of the carbon tax on growers.

He said the Federal Government's Clean Energy Future plan, announced in July, included two key policies relevant to farmers.

"Australia has to reduce its emissions by 5 per cent below 2000 levels by 2020," he said.

"In order to meet this 5 per cent reduction, it will mean a 27 per cent per capita carbon emission reduction.

"Under the Carbon Pricing Mechanism, large emitters will have to pay for their emissions. Agriculture won't need to pay for its emissions but under the Carbon Farming Initiative can create carbon credits to sell to large emitters."

The Federal Government set a $23 per tonne carbon price, to take effect from July next year.

Professor Kingwell said agriculture accounted for roughly 16 per cent of Australia's carbon emissions.

He said that figure was declining on its own because of the decreasing reliance on livestock.

"Agriculture is one of the few sectors that can say it is reducing its emissions on its own," he said.

"By 2020, agricultural emissions will account for 12-13 per cent of national carbon emissions."

Professor Kingwell said farmers should be wary of the Carbon Farming Initiative.

"The Carbon Farming Initiative is all about encouraging abatement projects in the land sector and from legacy waste emissions," he said.

These projects involve locking land away for carbon sequestration through vegetation or soils.

Professor Kingwell said growers should think carefully before committing to such activities.

"Although people talk about the role of sequestration in trees and soils, I don't see any medium-term economic advantages to farmers by applying these practices," he said.

"Productivity is an engine of profitability and that is what farmers may be giving up if they lock up land for trees. The best use for agricultural land at the moment is agriculture."

In response to Professor Kingwell's claims, Carbon Conscious business development director Dan Stevens said prime agricultural land was not the target of carbon abatement schemes.

"(Using) high-value agricultural land doesn't make sense from an economic point of view," he said.

Mr Stevens said 8000 hectares of WA marginal land had been set aside for carbon abatement projects.

"There is a lot of marginal country that shouldn't have been cleared, in the central and central-northern Wheatbelt," he said.

"We are putting native trees (oil mallees) back into that land and leaving agricultural land for production."

By 2012, 10,000ha of WA land will be taken up by Carbon Conscious' oil mallee plantations.