Wednesday, August 29, 2012

This is the Government’s Year to Make the CFI Work

In a year’s time Australians will be going to the polls to choose between the Government who brought us the Carbon Farming Initiative and the Opposition who promised to keep it but change it. What will the CFI look like by Polling Day? It will be considered a success if there are large numbers of farmers getting involved. There are only two things that can be done to achieve this: remove barriers and increase incentives. What are the barriers?  Many farmers have been convinced that there is nothing in the CFI for them after a long period in which people have been talking the CFI down under the guise of giving sage advice by highlighting the risks, many of them fictional, most of them overstated. But the marquee risk that gives credence to the others is undoubtedly the 100 Years Rule. No farmer would take the risk. No other industry or market asks people to make such a commitment. It’s naïve to expect any involvement while the 100 Years Rule reigns. The other barrier of significance is price. In the commodity markets farmers usually sell into they are price takers. But in the carbon market they can be price makers because only farmers can activate the world’s biggest photosynthesis installation for shifting large amounts of CO2 from the atmosphere to  vegetation and soil sinks. Think of the lack of involvement by farmers as a negotiating tactic. They’re trying to tell you something: the risk is too high and the price is too low.

The 100 Year Rule will feature at this year's Carbon Farming Conference.

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