David Drage, a Warracknabeal, Vic, mixed farmer, last year won a Nuffield Scholarship to head overseas "hopefully with an open mind" to pursue the question of whether soil carbon and carbon markets in general represent a threat or an opportunity for Australian agriculture.

He returned from the two-part scholarship trip firmly believing the threats currently outweigh the opportunities.

In his meetings with farm lobby groups and non-government organisations (NGOs) in the United Kingdom, Europe and the Americas, Mr Drage was repeatedly told that the cost and difficulty of accounting for soil carbon, and issues of permanency, mean that agriculture doesn't currently have a place in carbon accounting systems.

In Canada, a power station that purchases carbon credits to offset its emissions told him that the flakiness of the assumptions that underpin soil carbon trading through the Chicago Climate Exchange (CCX), and doubts about permanency, mean that the business is only purchasing a minimum of agricultural-based carbon credits.

"They said they couldn't afford to expose themselves too much to ag offsets, so they are keeping their exposure low," Mr Drage said.

Agroforestry might offer more certain returns, but that too has to be proven over the long term.

The overarching issue for Mr Drage is whether farmers, in signing over their carbon offsets to other businesses, take on an unacceptable level of risk. If the carbon disappears in drought or fire, the farmer is liable, not the polluter.

Ultimately, Mr Drage said, using agricultural offsets is a "soft option" that allows big business to transfer risk to farmers, and drag out the bottom-line changes necessary to actually lower greenhouse gas emissions.

* Mr Drage's full Nuffield report can be found via the "Reports" section on

* Carbon Coalition convenor Michael Kiely's response to Mr Drage can be found on the Carbon Coalition blog: www.carboncoalitionoz.blogspot.co m