The response of broadacre mixed crop-livestock farmers to agricultural greenhouse gas abatement incentives

Abstract

Many countries have introduced incentives to encourage farmers' adoption of practices that can reduce greenhouse gas (GHG) emissions. In this study, we deliver a whole-farm bio-economic analysis to assess the changes in land-use patterns, farm practices and on-farm GHG emissions under varying levels of agricultural abatement incentives in the form of a carbon tax for a broadacre farming system in Western Australia's Great Southern Region. Our results consistently indicate that an increase in agricultural carbon tax rate reduces both farm profits and on-farm GHG emissions. Since livestock are the dominant emissions source, the optimised enterprises mix would shift further towards cropping to produce less emissions. Under a carbon tax, farmers also tend to include less canola-based rotations and more field-pea-based rotations in their optimal enterprise mix. The estimates show that broadacre farmers in Western Australia may abate their on-farm emissions to help meet the national goal (13% reduction), with marginal abatement costs not higher than $20/ton CO2 equivalent in 2015 Australian dollars. In general, the analysis implies that abating broadacre agricultural GHG emissions through changing land-use patterns and farm management practices is relatively a low-cost choice.