An analysis of conservation agriculture as a response to climate change in Australian dryland farming systems

Abstract

This thesis analyses the role of Conservation Agriculture in reducing greenhouse gas emissions and sequestering carbon in the Australian dryland grains sector. Australian Government policy indicates that agriculture should play a role in climate change mitigation, although the details of related policy are still evolving. Current policy relies on a market-based instrument, known as the Carbon Farming Initiative, to incentivise farmers to change farming practices to ones that reduce emissions and sequester carbon into soils and vegetation. Many of the farming practices being considered as part of the Carbon Farming Initiative are aligned to the concept of Conservation Agriculture as described by the United Nations Food Agriculture Organisation. The Australian farming system is highly variable depending on its agro-ecological and socio-economic context. As a consequence, converting the opportunities for climate change mitigation in Australian agriculture into achievable, practical, and commercially viable farm practices is a complex challenge. Moreover, there are a number of economic and social constraints to changing farm practices in Australian agricultural enterprises. In this thesis I apply a systems-thinking and mix-methods approach to consider the issues that drive practice change. The methodology uses both quantitative and qualitative analysis methods. This thesis considers the role of a number of Conservation Agriculture practices in climate change mitigation. These practices include; reducing tillage, maintaining full stubble retention, including legume rotations, control traffic farming, application of precision agriculture to fertiliser, recycling of organic waste and cover cropping. Review and analysis of the challenges to the adoption of these practices in the Australian broad-acre grain farming reveals that the Australian farming system is generally ‘under financial stress’ and there are a number of constraints to the adoption of new practices, particularly in the short-term. An examination of economic and social constraints operating on farms indicates that, under the current circumstances, a market-based instrument offering payment for carbon offsets is not a viable option to speed up the process of adoption. The main barriers are ongoing policy uncertainty, the transaction costs associated with producing a verifiable carbon offset, the rules of ‘Additionality’ and ‘Permanence’, and the current low market prices paid for carbon offsets. These factors are further complicated by the vulnerability of the Australian broad-acre farming system to carbon loss resulting from climate extremes and variability; this presents a further commercial risk to aggregators and farmers considering carbon farming. Furthermore, given the size of the typical individual Australian broad-acre farm, offset production through Conservation Agriculture is currently not commercially feasible on an individual farm basis. It appears that currently, difficult commercial conditions in general for the farm sector means that farmers are more focussed on directly managing production issues rather than on managing environmental externalities. The current use of a carbon market instrument to encourage farmers to reduce agricultural emissions by changing practices is not viable for some sectors such as the dryland grain farmers covering 23 million hectares of production. The current market condition and the associated compliance requirement to generate a market unit is simply not economically attractive. The CFI policy when drafted did not account for such a significant market downturn in the price of carbon and the increasing compliance requirement to meet the IPCC guidelines. There is however a real opportunity for grain farmers to reduce their emissions profile by adopting certain Conservation Agriculture practices. Although the current carbon price on its own is not a sufficient incentive for increasing adoption rates of new farming practices. Practice change in agriculture is risky and farmers change slowly as they evaluate all the implications of change. Many simply do not have sufficient investment or knowledge capacity to make the change. Ideally, adoption of practices that have mitigation benefit would also need to have a production co-benefit to be considered as feasible investments by farmers. The effectiveness of climate policy in Australian agriculture could be enhanced if it were to support the fast-tracking of existing environmentally beneficial farming practices that also have positive production outcomes. As the current carbon market is unlikely to offer sufficient incentive for individual farms, I speculate that future research might consider a specific Conservation Agriculture extension process which could be funded through the production of nominal carbon offset units aggregated and measured at an industry or sector-wide level, allowing for a degree of discounting for risk, variability and uncertainty.