Ok. Can anyone help me out here.

I grow ag commodity X. I know the planting start date for X and when it is harvested.

Currently if I enter into and agreement to grow X I have to lock in price now and total volume (like a forward contract). If I dont produce that many tons? 1/

Then I have to 'make good' on the shortfall yes?

Let's go numbers. Imagine X is like the wheat we've just sown. I could grow 6T/ha or 0 so I go with 3T/ha forward contract. APW1 price is $250 / T today. So its $750 / ha income lock in for December. But! 2/

Lets imagine wheat is like X.
All the commodity marketing experts say the price is going to be over $835 / T in December when the contract are being completed. But I'm locked in at $250 for 3T

So if there's a problem during the growing season, say a disease or rainfall issue 3/

So the yield is only 1.5T/ha. My forecast $750/ha income actually $375 and I now have to make good on 1.5T/ha at current price of $835 = $1,252.5

In other words net income -$877.5 for the pleasure of growing $1.5/ha of wheat, plus all my production and over head costs!

Fark! 4/

If Government came to me with a proposal that the only way to market wheat was under such terms, I'm pretty sure I'd say a few rude things.

Yet product X works that way, plus it's growing season is 25 years, plus it changes the land development options permanently! 5/

Now I know wheat at $835/ T is a silly price yes?

But the ratio is right for product X, 250:835 is the same ratio as today's 'commodity X' price in Aus to the minimum it'll have to be at in 25 years.

You'd be an insane wheat grower to lock into the market today right? 6/

Ok so if you got this far in the thread you'd have picked that commodity X is vegetation sequestration of carbon on farm, right.

So #AUSAG. Please help me. Why the hell would I sell our farm sinks from vegetation in this carbon market with these conditions?

Why? What upside?

Help me out.

And this isn't policy. This is a peasant looking at this area right here and trying to crunch numbers and read reports and struggling to make sense.

@DillonCreek @VMorganSchmidt @SoilCarbonCo @CarbonBubble @agrarianliberty @CoreyBlacksell @BrisvegasAJF @cropmad

Cause I run a few things through @CSIRO https://looc-c.farm/  and the physical makes sense.

But I look at the market terms and likely future price of minimum $50 a ton https://www.afr.com/policy/energy-and-climate/270-carbon-price-tag-required-for-net-zero-emissions-20200224-p543ra
Then surely due diligence says I cannot go any near the deals on the table now...?