Resource managers, altruists or just farmers?

LIKE OTHER FARMERS in Australia's cropping belt, David Kreig was dismayed by the way the weather seemed to be continuing to get hotter and drier. In 1995, he bought a property north of Hay, in south-western New South Wales, a region whose climatic history suggested he could expect at least one heavy wet season by 2000. "Once, we could always rely on getting three floods each decade," he says. "Ten years later, we haven't had one."

Many farmers facing Kreig's problem have been forced either to adapt to Australia's new climatic uncertainties or to walk off their land. His response is one that would have been unthinkable even a decade ago. In 2004, Kreig struck a deal with CO2 Australia, a Melbourne-based company, to plant rows of mallee trees between the wheat, barley and pea crops he grows on Ionavale, another property in the same region, near Griffith. The company is using the trees, or more strictly the carbon they absorb from the atmosphere, to sell as carbon credits to Origin Energy, an electricity supplier. Kreig receives a fee from CO2 Australia for using his land over the 30-year life of the trees' carbon-absorbing cycle, plus a small share from the sale of the carbon credits.

He sees it as more than just a commercial deal designed to buffer him against hard times. "I've always had a gut feeling that trees attract rain," he says. "There is a feeling around with climate change now that everything is getting drier. I thought that planting trees could try to address whatever is happening with climate change. It could be a small step towards benefiting our children."

Altruistic thinking of this sort about global warming has never featured strongly in the Australian bush. That is starting to change as farmers realise that climate change is emerging as yet one more challenge to their survival, along with the more familiar ones of debt-income ratios and the tyranny of world prices for their wool, meat and grain. Many are facing up to the uncomfortable fact that agriculture itself has been responsible for a considerable part of Australia's not inconsiderable contribution to global warming.

Agriculture is the third-largest contributor to greenhouse-gas emissions in Australia after coal-fired power stations and motor vehicles, according to the Australian Bureau of Agricultural and Resource Economics (ABARE). A legacy of land clearing stretching back generations comes into this calculation but so do the inefficient use of nitrogen soil fertilisers and other farming practices.


THE AUSTRALIAN GREENHOUSE Office, the federal body overseeing Australia's response to climate change, gives a blunt account of Australia's record. Citing the National Greenhouse Gas Inventory, it reports that agriculture is responsible for about twenty per cent of Australia's greenhouse-gas emissions, higher than agriculture's worldwide average of seventeen per cent, and higher than in any other OECD country except New Zealand. Strangely, the office declined to elaborate on these figures which are available on its website, citing a ministerial directive not to speak publicly on climate change.

Elsewhere, David Ugalde of the Australian Greenhouse Office paints a sobering picture in an article he co-wrote last year in Environmental Sciences. Greenhouse-gas emissions from farming occur across about sixty per cent of Australia's landmass, mainly through the escape of carbon dioxide, nitrous oxide and methane. The worst offender is nitrous oxide, a byproduct of the nitrogen used as a prime ingredient of crop and pasture fertilisers. It has a global-warming potential more than 300 times higher than the more familiar greenhouse gas, carbon dioxide. Farms are responsible for seventy per cent of Australia's nitrous-oxide emissions. In some intensive crop and pasture systems, only one-fifth to a half of nitrogen applied to help plant growth can be accounted for, says Ugalde. "The rest goes missing ... as downward percolation through the soil, as surface run-off ... or as a range of gaseous products, including nitrous oxide." Only in rain-fed systems does the take-up rate by plants of nitrogen fertilisers rise to eighty-five per cent.

Then there is methane, with a global warming potential twenty-one times higher than carbon dioxide. Cattle and sheep are responsible for twelve per cent of Australia's total greenhouse-gas emissions through the methane they pass into the air after ingesting their feed. Ugalde describes this as a "very significant emission indeed".

Ugalde and his co-authors contend farming in Australia has passed through three stages over the past 200 years to reach this crucial environmental point. First came the pioneers, who believed the land was robust and resilient, and that they had little capacity to change it. "The expectations of pioneers were small. Mere survival was their motivation." Then came farmers, a breed of more intensive land users who believed they should change the land to improve it, and had the capacity to do so with tractors, bulldozers and other machines. By clearing native forests from hills, mountains, plains and valleys, farmers were able to expand Australia's cultivated land and make money from it.

The era Australian farming has reached now, say the authors, is that of the "resource manager", landowners who want a competitive return while improving their land's asset value. "Resource managers have enormous capacity to impact both positively and negatively on the environment ... [They] are motivated by the need to protect their resource from environmental damage, or possibly by the need to protect the resource from regulators."


SO WHAT WILL Australian farming's next phase look like and how will policy-makers encourage farmers to adopt new ways to reduce greenhouse-gas emissions from farms? The next wave of farmers will be asked – and expected – to be what the authors call "altruists". "Agriculturalists will be expected to reduce greenhouse-gas emissions from farms for the benefit of all."

The deal between CO2 Australia and farmers such as Kreig could be an early sign of this new approach at work. CO2 Australia is a subsidiary of CO2 Group, an environmental services company. Formerly Revesco Group, a minerals exploration company, it changed its name and its focus in 2004 after looking at what Andrew Grant, CO2 Australia's managing director, calls the "emerging carbon economy". Despite the Howard Government's refusal to ratify the Kyoto Protocol on climate change, state and federal governments have set voluntary and mandatory targets for industries, such as power companies, to reduce greenhouse-gas emissions. The companies can either comply, pay fines or buy "carbon credits" equivalent to the volume by which they exceed their emission targets.

CO2 Australia has entered the business of selling carbon credits by creating "carbon sinks", plantings of mallee eucalyptus trees that capture carbon dioxide from the atmosphere and isolate it in their roots, stems and leaves. The wheat-sheep farming belt through western NSW and northern Victoria is ideal for growing mallee sinks. The region was covered in mallees before pioneers and farmers cleared the land, and the trees themselves are robust: they can survive bushfires and long droughts.

Kreig comes from a South Australian farming family and moved to the Hay-Griffith region of NSW twenty-eight years ago. He followed up the 2004 trial mallee plantings at Ionavale with another at West Burrabogie, a mainly grazing property near Hay. CO2 Australia paid him a fee for the portion of his property it used (typically up to ten per cent of a farm's production area, with a minimum mallee planting of fifty hectares), calculated at a rate comparable to the property's market land value. In return, CO2 Group owns the trees and sells carbon credits from them. Under the NSW Greenhouse Gas Abatement Scheme, each tonne of carbon dioxide captured by a mallee plantation represents one carbon credit certificate, which CO2 then sells to an emitter of greenhouse gases. "No physical product changes hands," says Kreig. "People in Sydney or elsewhere doing the polluting can buy credits from what we produce out here to fix their problem, without anything being touched."

There is another pay-off for Kreig. He estimates about eighty per cent of the 1,800 hectares at Ionavale had been cleared since the 1930s. Here, for the first time, was a company prepared to bear the cost of revegetating part of his place. The rows of mallees, planted in twelve metre-wide belts, provide shelter from hot winds during the cropping season and shade for his sheep at the Hay property. Even though the trees' role as carbon sinks will fade after about thirty years, the deal stipulates they must stay there for a hundred years. "We don't seem to have a ground salinity problem now," says Kreig. "But you don't know what's going on underneath. So I saw this as a way of looking after the environment. We've come full circle. It's a turnaround from what we had when we first came here."

Kreig's was among the first of CO2 Australia's trial plantings on seventeen properties. Andrew Grant of CO2 Australia says the company planted about 1.6 million trees on 1,000 hectares in 2005, and is planning to plant another 1,500 hectares in 2006. Its biggest contract so far involves selling carbon credits to Country Energy, a leading Australian power company, requiring planting about 30,000 hectares of mallee trees up to 2012. Grant says the response to the idea among farmers has been "terrific". It has come mainly from three groups: bigger corporate-type farmers, younger ones who are land rich but capital poor, and a new generation of tertiary-qualified farmers who are prepared to try a more progressive approach to land management than their forebears. "The leading twenty per cent of successful farming business people tend to feature."

Progressive it may be, but its capacity for producing a new generation of "altruists" in the Australian bush seems limited. In the end, farmers identify themselves by the produce they can successfully sell from the land. When times are good, as they are for many now, the temptation to hand over their land for the creation of carbon sinks will not be high. Despite the horror images of the 2002-03 drought in eastern Australia, farming has come through a real turning point since the drought of the early 1990s, says Brian Fisher, executive director of ABARE.

The earlier drought, hitting at a time of high interest rates and low commodity prices, was enough to ruin many farmers. Those who survived have become a more "savvy" lot, says Fisher; grain growers, in particular, have reaped the benefits of crop farming productivity rising at a rate of 3.2 per cent a year over the past fifteen years. "Switched-on farmers are talking about smart technology, having satellite-controlled, driverless tractors doing their cropping to avoid soil compacting in ten years' time. It's a different world."

Fran Rowe, a rural counsellor from Tottenham in western NSW, has seen her work change dramatically since the early 1990s. Then, she was negotiating with banks to help debt-ridden farmers leave the land with whatever meagre terms she could get them. Now, on the back of rising rural land values, farmers can walk away with up to $500,000 after selling their properties and paying off their debts. Rowe is a member of the Agriculture and Food Policy Reference Group, a body launched in Canberra in early 2006 to look at agricultural policy over the next twenty years. "It's become a leaner machine," she says. "There's much greater understanding among farmers of farming as a business." For this reason, she is sceptical of rural altruism towards climate change taking too much hold. Those farmers whom she has helped examine proposals for giving up part of their cultivated land to plant mallee carbon sinks tend to see it more as a way of raising cash to reduce their debts and to stave off selling their land altogether.

Fisher identifies a new set of problems from those that devastated the bush in the early 1990s. They flow from pressures on farmers to grow bigger and more efficient and to produce more cash flow – in other words, the problems of success. As farmers face pressures to work the land more intensively, this can only mean more pressures to address their greenhouse-gas contribution as well. Yet many farmers are increasingly resentful at their urban image as climate-change offenders, especially after the NSW government recently enacted legislation to stop broadacre land clearing. Farmers in western NSW, for instance, who want to clear native woody-weed invasions to open up more pasture lands, have been stopped from doing so. They say the woody weeds are responsible for causing an even worse environmental problem, soil erosion. And they argue that going from one extreme to another, wholesale clearing of the pioneer era to locking up land in a "time warp", is a counter-productive agenda designed to please urban greenies. A climate of rising city-country rancour does not bode well for an altruistic approach to climate change.

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