WE ARE on top of the world. Granite boulders resembling giant bread rolls lie strewn across a peak on the southern end of the Great Diving Range.

Between these boulders is an emerging forest of trees and shrubs which has somehow managed to survive the onslaught of harsh southwest winds and hungry rabbits.

    AT A GLANCE
  • Who: Peter and Chris Forster
  • What: carbon pool
  • Where: Ararat, Victoria
  • Why: payback for years of revegetation
  • Report: SIMONE DALTON

It is a wondrous, beautiful place that some people would no doubt pay to behold.

The sad fact is that it there has been little income and a lot of cost getting the hill to this point.

Erosion and rabbit control are not cheap and have included a $10,000 ripping bill.

Owner Peter Forster has spent many hours scrambling up the steep slopes armed with a spade and bag of phosphine tablets in his war against the rabbits.

"It was the worst rabbit community in the whole of Victoria," he said.

There has been plenty of state, federal and personal funding used to pay for trees, fences and effort needed to transform this bleak hill into a living landscape.

But the work, on Peter and wife Christine's 200ha block south of Ararat, has been a labour of love.

"It is nice to come here and go for a bush walk on your own farm," Peter said.

These days the block has few signs of rabbits and plays host to a pair of wedged-tailed eagles, dozens of kangaroos and some healthy red gums on the low lying sandy and swampy areas.

Peter, who is a member of the Environmental Farmers Network, knows the countless benefits trees bring, including biodiversity, salinity and erosion control, and shelter.

On the downside, locking up land also means less feed for sheep and less income but little or no change in the rates, fencing and maintenance costs.

And with more than a fifth of the Forster's 800ha farm enterprise fenced off and replanted since they returned to farming the early 1980s, a lot of land is out of production.

Now, through a volunteer carbon pool, Peter and Chris will get some monetary reward for decades of hard work.

The Forsters, who farm with daughter Michaela and son-in-law James Drew, are among the first farmers to sign up to the Glenelg Hopkins Carbon Pool.

They recently received a cheque for almost $20,000 which included an annual allocation and back-pay on trees planted on their farm since 1990.

About 41ha of the plantations were planted from 1990 and another 80ha from 2001.

Chris said the payment comprised 2000 tonnes of carbon sequestered from 1990 to 2007 and a further 500 tonnes expected annually in future.

Trees planted before 1990 are not eligible for credits.

Much of the income will be earned in the first 30 years when the bulk of the carbon is sequestered. The project, which is a partnership between the Glenelg Hopkins CMA and Landcare CarbonSmart, was launched last month.

"Carbon rights have become tradeable property and while we don't view this as a 'get rich quick' scheme we do see huge potential for landowners to develop new income streams," CMA chief executive Peter Butcher said.

The regional trading pool would allow greenhouse-gas emitters to buy carbon credits for about $30/tonne, with landholders expecting payments of about $20/tonne, he said.

The other $10/tonne would go into a regional pool to cover administration and insurance against loss through bushfire or other disaster.

"The typical range of payments would be in the order of $60-$120/ha," Mr Butcher said.

He said the main barrier for landowners would be the requirement to register a covenant on their land for 100 years.

"That said, the established plantations can be grazed and the collection of firewood or use as a seed bank is also encouraged," he said.

The Forsters are happy with the covenant arrangement.

"I see the fact that you are tied up for 100 years as an advantage," Peter said.

The Forsters' carbon contract is for the next 10 years and payments are based on the going market rate.

Chris sees it as a way to buy weed and rabbit control, while Peter sees it as a payment on land that is not going to make money.

"It gives us the money to play with and to do more tree planting and maintenance," he said.