FARMERS are and always will be risk managers. Whether or not you accept the science on climate change, the reality is that farmers need to manage the risks associated with the carbon debate. We can continue to be seen as part of the problem or we can be part of the solution.
Currently, there are bills before the Australian Parliament to enact a new pollution offsets scheme - the Carbon Farming Initiative (CFI).
Until now, farmers have been given little incentive to invest in climate change solutions.
This is the best chance farmers have to get engaged in the new carbon market without being penalised for their own emissions.
Crucially, it would be farmers in charge of cutting their emissions. Not drought. Not commodity prices. Not governments. Farmers would be taking control of their own destiny.
There is still work to be done to ensure the scheme is a success, but no reason to delay it.
Some fear productive land will be plastered with trees, but a cool-headed appraisal suggests investments in carbon forestry by big polluters are likely to start small.
The most realistic estimates see the land sector offsetting up to 3 per cent of Australia’s total emissions in ten years’ time. This is modest nationally speaking, but represents around 10 per cent of our sector’s own emissions or up to 15 million tonnes in 2020.
The vast bulk of this is likely to be a mixture of new management practices rather than new forestry. The potential array of offsetting options is large. The risk to prime agricultural land is low.
Those 15 million tonnes represent new investment that will help landholders manage risk, innovate and earn recognition for doing their bit; all the while building a new knowledge-based export industry and our global competitive advantage.
Under the proposed CFI, certain activities will be deemed unacceptable: you won’t be able to earn carbon credits from a Managed Investment Scheme, for instance, and carbon plantings will not be permitted to jeopardise water resources.
And linked to the CFI, a carbon price could see Australia’s top 1,000 polluting firms buying climate change solutions from rural and regional communities.
Australian agriculture boasts a strong tradition of ingenuity with a proven capacity to adapt to changing economic circumstances - a fact all-to-often ignored by the more near-sighted farm lobbying groups.
Yes, a price on pollution will see short term growth in income slow a smidgeon, but as recent Australian Farm Institute economic modelling shows, long term growth in farm cash incomes will remain strong. The cost of running an average New Zealand dairy and sheep farm has risen by little more than half a per cent of annual working expenses since that country introduced an emissions trading scheme.
Rising oil and fertiliser prices will be much more painful. We need investment to shift into alternatives and new efficiencies, which is precisely what a price tag on carbon will do.
What is more, farmers, like most small or medium-sized business people, are being sidelined by the big polluters; the same big polluters who are best placed to cope with a shift to a clean economy and yet whinge the loudest for the biggest slice of the revenue cake.
As a matter of priority, revenue from a pollution price should be used to help industry adjust. Investment in research, development and extension is urgently needed to redouble productivity growth and cut at the same time.
On the other hand, a failure to price pollution would simply expose agriculture to lingering risk. Around the world, a new industrial revolution is getting underway, one emphasising doing more with less. Unless we are part of it we will be left behind.
What are our options? Digging our heels in certainly isn’t one of them. Yet old-fashioned farm lobbyists have so far failed to offer credible alternative strategies for agriculture in a low-pollution economy.
The only other idea on the table seems to be to spend taxpayers’ money on ‘direct action’ to reduce emissions, but do we really want to leave it up to a bunch of bureaucrats in Canberra to dole out cash?
For my part, I prefer a conservative, market-based solution: farmers should be able to tap into the carbon market and given the opportunity to cut emissions without cutting productivity. We need to avoid getting caught up in cynicism and political game-playing.
The Carbon Farming Initiative starts the ball rolling. It’s not the end, but it is the first really good shot farmers have had in a long time. It gives us a seat at the solutions table and removes us from the menu where others will simple digest and discard us.
Mark Wootton is a Western Victorian farmer. He is also Chair of the Climate Institute and The Glenelg Hopkins Catchment Management Authority.
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