Australia could see the equivalent of three Tasmanias of productive farmland shift permanently into carbon sequestration as the nation hurtles down the road towards net zero, with senators expressing alarm that some of the nation’s more fertile, high-rainfall regions are in the frame for land use change.
Modelling produced by the Australian Bureau of Agricultural and Resource Economics and Sciences, examined at Senate estimates last week, after being released late last year, shows that up to 18 million hectares of agricultural land could move into carbon projects to deliver 119 million tonnes of abatement by 2050.
ABARES executive director Jared Greenville said that area would be additional to land already in carbon projects and represented about 4pc of Australia’s agricultural land base.
The modelling, intended to be a practical road map for stakeholders, divides Australia into three broad agricultural zones in high rainfall and wheat-sheep zones where sequestration rates are higher and pastoral, reflecting lower land costs.
Nationals Senator Matt Canavan pointed out that productive districts, rather than marginal country, would be asked to shoulder a disproportionate share of the transition.
LNP Senator Susan McDonald, who is also shadow minister for resources and Northern Australia said she was “horrified” by the data.
“This is happening in high-rainfall, more productive food-producing areas, and the modelling underestimates the consequences,” she said.
Local government areas identified as facing the largest proportional change include Streaky Bay, which is projected to see more than 10 per cent of its agricultural land diverted into sequestration, and Elliston in South Australia; Tenterfield and Warren in NSW; Chapman Valley, Northampton and Three Springs in Western Australia; and Cassowary Coast in Queensland, are projected to fall within the 5pc to 10pc band.
The areas were revealed in estimates but had been deliberately omitted from the ABARES paper in order to take a “landscape view” of the situation.
Under the Spatial, Agriculture, Forestry and Environment (SAFE) model, farms are represented as “cells” of roughly average commercial size.
About 59pc of cells entering sequestration are projected to retain some agricultural production after an initial exclusion period, such as managed grazing under environmental plantings or regeneration.
However, Dr Greenville confirmed that about 40pc of participating cells would fully convert from agricultural production to carbon activities.
He stressed that the transition would occur alongside continued growth in national agricultural output and that food production would not be materially threatened at an aggregate level.
However, other Albanese government policies are also changing how land is used across the bush, from Environment Protection and Biodiversity Conservation Act reforms clamping down on on-farm land clearing, to the roll-out of large-scale renewable projects and transmission lines, to its push to position Australia as a critical minerals “superpower” opening a new wave of exploration across agricultural land.
This situation has sharpened the focus of farm lobby groups and the Coalition around how the nation’s most productive landscapes are being protected.
The ABARES modelling projects agricultural export revenue would be about 2pc, or $2.8 billion a year, lower by 2050 than it would otherwise have been without land diverted to carbon.
At the same time, carbon sequestration income is estimated to reach up to $9 billion annually by 2050, depending on carbon prices.
Senator Canavan calculated that, spread across the roughly 90,000 to 100,000 commercial-scale farms measured by the Australian Bureau of Statistics, the loss equated to about $30,000 per farm on average.
Dr Greenville described the $2.8 billion as “foregone agricultural activity” and said landholders would only switch when carbon presented a greater business opportunity than farming.
“The farms that are earning carbon revenue are obviously going to be making that choice because the carbon revenue exceeds that forgone revenue,” he said.
“Some of those farms that would lose would actually be in a better financial position, and that’s one of the pros.”
But Senator Canavan argued that private carbon income did not necessarily replace lost activity in regional economies, questioning whether there was assistance earmarked for communities facing concentrated land-use change.
Tasmanian LIberal Senator Richard Colbeck said the prospect of millions of hectares shifting away from traditional farming raised immediate questions about regional resilience and employment in places where agriculture remained the backbone of local economies.
“There are areas that will always be more productive than others,” he said.
“When you change the land use and the community base that drives production in those regions, it drives a whole cycle of discontent. We’ve seen it in those communities previously – those cultural changes can be very counter productive.”
Dr Greenville told estimates that so-called “second-round” impacts on things like employment, service viability and regional supply-chains had not been included in the modelling.
National Farmers’ Federation interim chief executive Su McCluskey welcomed the report as a tool that would assist governments understand the consequences of policy decisions.
“This is not a blueprint telling farmers what to do with their land,” she said.
“The key word here is choice. For some producers, carbon could be a complementary income stream. For many others, it won’t stack up and that’s entirely appropriate.”
The Department of Agriculture, Fisheries and Forestry believes regular reviews would mitigate unintended consequences of any new reforms, while DAFF deputy secretary Matt Lowe said the modelled analysis should be viewed at a holistic level.
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