The introduction of a carbon price and the use of agrichar in the sugarcane industry

Cameron Thomas

AFBM Journal, 2010, vol. 07, issue 01, 12

Abstract: The Australian Government‘s proposal to put a price on carbon is likely to have a significant impact on the price of farm inputs (diesel, fertiliser, water and electricity). Furthermore, offsets (reduction or removal of greenhouse gas emissions that counterbalances emissions elsewhere in the economy) are a potential area of expansion of interest to the agricultural sector. Agrichar is one of the new technologies and farming practices being investigated to counteract carbon-price-imposed costs. Its two claimed benefits, which relate both to the profitability of sugarcane growers as well as to climate change, are the reduction in fertiliser application and the carbon which agrichar can store in the soil for hundreds to thousands of years. This study drew on the Farm Economics Analysis Tool (FEAT) developed by the Queensland Department of Primary Industries and Fisheries specifically for the sugarcane industry. An analysis was conducted for a typical sugarcane farming enterprise in the Herbert region of north Queensland. The scenarios included in the analysis recognised the change in input prices as a price is put on carbon, the change in farm practices when agrichar is included in operations and the potential to trade in offsets from that additional carbon stored by the use of agrichar. The sugarcane grower was found to benefit from the inclusion of agrichar into the operations. Agrichar is seen as a potential and viable option for sugarcane growers and should be considered as an alternative under the emissions trading scheme to minimise the impact of the rise in input costs. Further scientific and policy development could result in the possibility for stored carbon to be traded in the offsets market, providing additional, although minor, cash flow to the grower.

Keywords: Farm; Management (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:ags:afbmau:120871

DOI: 10.22004/ag.econ.120871

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