With farmers now able to earn Australian Carbon Credit Units through the Carbon Farming Initiative by establishing environmental plantings, this study sought to answer the question ‘am I better off using that land to plant trees rather than keeping it in agricultural production?’
Using both a prime lamb and dairy enterprise located in south-west Victoria as a case study, researchers examined the impacts, opportunities and risks for farmers establishing environmental plantings on-farm. The analysis showed that if returns were based on CFI income only, the price of carbon would need to be $85/t CO2e for the investment to earn a positive return.
If other benefits are taken into account, i.e. shelter for livestock to reduce lamb mortality, the size of the return will depend on the establishment costs, wind chill index before trees and after trees (the number of extra lambs sold because of the trees), and the price of lambs. However, if the main objective was to provide shelter for livestock, then planting a grass-hedgerow would be more profitable than planting trees.