Carbon farm funding arrangements questioned

The Federal Government has been questioned about why it did not demand a management plan before funding a carbon farming project in the Northern Territory.

Henbury Station in Central Australia was purchased by RM Williams Agricultural Holdings in 2011 for $13 million, of which the Commonwealth contributed $9 million.

It was pitched as Australia's biggest carbon farming project.

The plan was to destock the 5,000 square kilometre property, about 125 kilometres south of Alice Springs, and return it to its natural state to earn carbon credits.

After a change of project management late last year, there was talk of incorporating some beef production in the plan.

A draft methodology on running the property was submitted to the Government but this was returned to RM Williams Agricultural Holdings, with a request for more information.

No carbon credits have been earned by the project so far.

This week, National Parks Director Peter Cochrane was questioned about the project during a Senate Estimates hearing in Canberra.

He said a management plan had not been required before the contract was signed.

Mr Cochrane told the hearing a Carbon Farming Initiative methodology has still not been approved.

National Party Senator Fiona Nash described the situation as appalling.

"The whole process seems to be a bit of a shambles and there really is a real lack of transparency," she said.

"To give $9 million of taxpayer money to a private company to purchase a property and not expect something as transparent and basic as a final management plan before that money was handed over, I think, is just an extraordinary state of affairs." She says running cattle on the property would be a complete breach of the funding agreement.

The Environment Department has been asked to report on what will happen to the Commonwealth money if the project fails.

A spokesman for RM Williams Agricultural Holdings says there is a detailed interim management plan in place at Henbury Station.

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