A five-year trial of soil carbon trading systems based on tenders will start in the Lachlan Valley within a few weeks and the outcomes may be used to help form a national carbon trading scheme.

About 300 farmers in the Canowindra, Cudal and Manildra areas are eligible for the trial – with up to 30 needed for it to start – and they will be paid at competitive rates for the amount of work they do, says Department of Primary Industries research agronomist, Warwick Badgery.

“It’s up to them to work out how much it will be to change land use to store more carbon in their soils,” Mr Badgery said.

“For us, we want the lowest possible price but this is a tender-based system and funding will be granted on merit.

“I think it gives farmers who want to do the right thing an avenue to do that; it’s a project for farmers who want to change.”

Farmers will be paid for land use changes that sequester soil carbon.

Such changes would include reducing cultivation, sowing permanent pastures or planting trees.

There are three possible contracts farmers can sign up to.

The farmers will be paid to undertake standard management actions that lift soil carbon levels in what are described as action-based contracts, while outcome-based contracts will allow them to be paid on actual change in such levels.

Hybrid contracts will allow payments on the basis of standardised management actions and changes in carbon levels, based on initial and final soil tests in the fifth year.

Tenders will be run by the Lachlan Catchment Management Authority.

As the first such scheme in the country, the Lachlan pilot would provide a better understanding of the potential of soils to sequester carbon, NSW Primary Industries Minister, Katrina Hodgkinson, said.

Australian governments would be closely watching the NSW trial because it could influence a national scheme for sequestering carbon in soil, Ms Hodgkinson said.

But a new carbon program is confusing the situation for farmers in the region, says Carbon Farming and Trading Association chairman, Michael Kiely, because the Federal Government had yet to nominate a measurement regime: “Will the measurement regime in the Lachlan be acceptable in the Commonwealth program?

“It’s a question of two very good things cancelling each other out.”

Information sessions for interested farmers will be held in July in Canowindra, Manildra and Cudal.

Visit www.lachlan.cma.nsw.gov.au or contact, (1800) 885 747.