Serious doubts about plan to let Ag Min veto farm carbon projects

However, David Littleproud defended the move as a safety net to protect agriculture from perverse outcomes as the carbon market grows, such as passive investors buying up farms and transforming the whole operation into a carbon project.

The veto power would apply to new or expanded native forest regeneration Emissions Reduction Fund projects that make up more than a third of the farm and are larger than 15 hectares in area.

A recurring criticism of carbon farming - particularly within Mr Littleproud's south-western Queensland electorate of Maranoa - is it could lead to the degradation of agriculture if entire farms are turned into passive carbon projects, which could create fire, pest and weed management issues for neighbouring landholders, while seeing jobs and families leave the region.

Carbon Market Institute chief executive John Connor said based on current trends, the veto powers would affect almost every on-farm carbon project - the average farm ERF project has a carbon estimation area of 33 per cent and can go as high as 50pc.

Mr Connor said the veto powers were a "very big hammer" to deal with a problem that was yet to be proven, creating more paperwork for farmers and adding uncertainty to the carbon market.

"I keep asking for [evidence] - we keep hearing of one or two, or a handful of instances, but they are yet to be highlighted to me," Mr Connor said.

"We're using a sledgehammer to deal with an issue that is yet to be defined as a peanut or a pumpkin."

When asked, Mr Littleproud couldn't put a hard figure on the number of farms that had been bought up by passive investors, however responded "millions of hectares".

Mr Connor noted that given the type of land and farming within south-west Queensland, millions of hectares could just be one or two farms. He said a number of councils within the region had put research to tender, and urged the government to wait until it saw the results

"I'm deeply concerned by the lack of evidence - I don't want to undermine the concerns, but let's see the research," he said.

"These veto powers will handicap a maturing industry before it has reached its potential."

Mr Littleproud said those looking for evidence simply had to "explore my electorate and northwest NSW".

"We've had investors coming in and effectively locking up entire properties, creating an environmental disaster where neighbours have to manage pests and weeds, and taking families out of communities," Mr Littleproud said.

"What this also does is it looks to the future. If carbon continues to go - it's sitting at about $50 a tonne - we don't want to see passive investors from Brisbane, Sydney, Melbourne locking up significant tracks of land."

The Agriculture Minister described the veto powers as a "safety mechanism" to prevent unintended consequences of a growing carbon market.

"You can go beyond 33 per cent, that just activates the trigger for a review to ensure that prime agricultural land isn't being taken over by some of these passive investors," he said.

"I have to give a reason, it's not carte blanche. It's a safety net from organisations taking advantage of a market at the peril of rural Australians. This is making sure the extremes are taken away."

The government's consultation period, which originally ran over the holiday period from December 10 to January 14, was labelled inadequate and has been extended to early February following the criticism

However, Mr Littleproud was determined to push the changes through, and said he and Emissions Reduction Minister Angus Taylor would work through the regulation change, which "we expect to have finalised within three to four weeks".

""We're not waiting around, this is about government making a sensible decision, instead of kicking it into the long grass," he said.

However, Mr Littleproud said a lot of the noise was coming from aggregators, businesses who manage multiple carbon projects while taking on the risk if projects fall short for a cut of the profits.

"This will bring competition into the market and aggregators who have been making lots of money know their margins might be tighter with this competitive tension," he said.

Australian Farm Institute chief executive Richard Heath was sceptical of the veto powers and said there was no data to suggest there was an impact on pest and weed management or adverse community outcomes from carbon projects.

"This will impose a burden on pretty much every ERF in Australia, if we're going to do that, we need a good reason to do so," Mr Heath said.

"The whole premise is based on concerns, mostly in south-west Queensland, but we're not getting any feedback that those concerns are held widely throughout Australia.

"AFI is an evidence based organisation. If there are serious and measured impacts, then obviously need to address that, but we just haven't seen the evidence that is occurring other than some particular incidences that are vaguely talked about as concerns."

Mr Heath pointed out there were already laws in place around on-farm fire, pest and weed management requirements, and a broad range of drivers for regional decline.

"It begs the question why carbon projects are being singled out," he said.

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