Additionality doesn't add up

The Government's solution to the absurd Financial Additionality Rule could see farmers forced to fill out forms every year to report on their farming practices, whether they are involved in the Carbon Farming Initiative or not. A "Common Practice" test is used to replace the Financial Additionality provision, which excluded a project if it resulted in higher production and hence higher profits - which it is assumed should be enough to get farmers to change their practices. (Soil carbon cannot be increased without increasing biomass and hence production. Yet the majority of farmers still don't practice soil-carbon-friendly farming.) Replacing Financial Additionality rule is the Common Practice rule which holds that a farming practice qualifies as "Additional" if it is not common practice in its industry, part of its industry or in the type of environment in which the farmer is working. If it is not common practice it goes on the "Positive List". Who decides what’s on the list? The Minister. How will he do this? The common practice test can only be applied if there exists accurate statistics of farm practices in every locality, parish and district across Australia. As this data does not exist, a major data gathering exercise or census will be required, involving a compulsory survey to be filled in by every landholder, even those not wishing to involve themselves in the CFI. The resulting database will need to be kept up to date, so farmers could find themselves filling in forms every year. It is variously estimated that there are between 100,000 and 180,000 agricultural enterprises in Australia. The response rate to such a survey would need to be close to 100% to give confidence in the decisions taken about common practice. At the same time, there needs to be precise definitions of farm practices that take into account the variants of those practices. There will need to be some way of deciding when a variant is far enough removed from the original practice to be considered a new practice. For instance there are no clear boundaries separating no-till from zero-till, minimum-till, direct drill, pasture cropping, no-kill/no-till and other alternative forms of cultivation. There will need to be a statistical cut off point that acts as the boundary beyond which a practice is ‘common practice’. That boundary point, wherever it is chosen to be, will be arbitrary and a source of injustice. The levels of complexity grow exponentially when the project must be measured against the others in the farmer’s industry or part of the industry and type of environment. Who decides what is a part of an industry and what isn’t? And type of environment? Once on the Positive List a practice is not guaranteed to stay there. Regular reviews of the ‘common practice’ situation will need be conducted to decide who stays and who goes. Who decides who stays on the list? The answer to that question every time is “The Minister”. In no other market is a Minister so actively engaged in regulating daily activity, not even the Treasurer. While the goodwill and good intentions of the current incumbent are unquestioned, a future minister may not be so disposed. The Carbon Farming & Trading Association recommends that the Common Practice Test be abandoned and “Additional” redefined as applying to all sequestration effected from the date that a baseline is established.

The new Carbon Farming Law will be explained at the Carbon Farming Conference & Expo, 28-29 September, 2011