Opinion: landholders in danger of being relegated to the bottom of the pecking order

James Henderson*, 10/08/2023

I recently attended an event focused on carbon and environmental markets billed as a forum at the cutting edge. In between the avalanche of sales pitches and misinformation there was the occasional snippet of truth which the landholders present seamed to grasp onto.

James Henderson

However on reflection, and discussion with other landholders who attended I believe a very important fact seamed to be missed. That is, if the current pattern continues, landholders will once again be placed at the bottom of the supply chain with little options for market opportunity.

This largely comes down to scope one, two and three emissions. For beef cattle, this means scope one: the production of methane from cattle, scope two: think electricity, and scope three are items purchased to run the business, such as fertiliser, pour-on treatments, herbicide etc.

Now there is a relationship between all these. Our scope one becomes someone else’s scope three, like when you purchase cattle, you bring a proportion of the emissions with them, they are the breeders scope one and your scope three. The problem to me seams to be that the businesses around the beef industry appear to be very focused on their scope three, and on our scope one.

That is, they are pushing for us to reduce our scope one, to help them reduce their scope three. Wouldn’t it be better for beef producers to focus on our scope three and the other industries around us focus on their scope one?

This would mean producers would be asking for their fuel, wire and herbicides to come with emissions disclosers, and would also clear the air around the argument of whether to keep credits for insetting our businesses or sell them for offsetting to the industries around us. It is interesting to note the greatest calls for producers to hold onto credits generated are not coming from people who have projects, but other areas with often vested interests.

A very simple truth is that not every producer in Australia will be in a position to generate carbon credits

We currently have several carbon projects on our properties. Our beef business generates credits, and enough that we could easily be carbon neutral. In fact we have a excess of CO2e (carbon ).

Our projects don’t cover our entire property and don’t affect our production. However I’m yet to see a meatworks grid with a carbon neutral premium, or feedlot grid, weaner sale or any other point of sale for our beef. There is no requirements from finance to be carbon neutral, only to simply know our emissions, and our ESG credentials. It is possible that some market access will require a ‘no deforestation” position soon, but that once again does not require the use of credits for insetting.

For us to use those credits in a supply chain the premium would have to be equal to, or greater than the cost of simply selling the credits. For our business that means a 40-60 percent premium against product produced out of the project are, so think $8/kg for fat cows at the works. So, we could be excluded from various markets and actually be penalised before that situation became viable.

If you have the ability to increase your cash flow in a way that does not affect your agricultural output, then why wouldn’t you? The business case stacks up.

A very simple truth is not every producer in Australia will be in a position to generate carbon credits. After working with producers in this space for seven years now I believe that number might be as low as 30pc of producers with a real opportunity. This number could increase, but it will start impacting on total ag production and quickly the benefits of credits will outweigh the cost to supply chains.

We only need to look to the war in Ukraine and Covid19 to see the affects of supply chain disruption. New methods are coming online, but they most likely won’t help the other 70pc of producers. These other producers however, are probably going to find opportunities in the
biodiversity and emerging natural capital markets.

I see a real danger in Australian landholders meekly surrendering their Natural Capital assets for lack of accurate and independent information being provided to them. The Agribusiness companies we work with are hungry for the carbon and natural capital credits we can generate, as are the rapidly emerging phalanx of aggregators and brokers.

These are all genuine partners, but their marketing budgets are large and a confused and time poor landowner unfortunately is easy prey.
Make no mistake. The natural capital, carbon and biodiversity markets are real and in many cases substantial enough to rival production and capital gain as a wealth building tool in the decades ahead.

But delivering accurate, timely and independent information to landholders is absolutely critical if they are not to be shorn like sheep in the stampede by society in general to thwart climate change and environmental degradation.


* Author, James Henderson is a cattle producer in Queensland’s North Burnett region. He has several projects carbon projects and runs a consulting business for natural capital projects. Mr Henderson is a former chair of the AgForce Young Producers Council.



Your email address will not be published. Required fields are marked *

Your comment will not appear until it has been moderated.
Contributions that contravene our Comments Policy will not be published.


Get Beef Central's news headlines emailed to you -