Under the Taking Action for Victoria’s Future – White Paper Action Plan released on Monday, the program will allow farmers, the forestry industry, community and government to voluntarily offset greenhouse gas emissions through a central offset purchasing system. As a result, there will be incentives for tree planting and improved farming practices.

“This exchange will not only see more trees planted in new forest plantations but will also promote a move towards a more sustainable and environmentally friendly use of farming resources,” Premier John Brumby said.

Victorian Farmers Federation president Andrew Broad said the scheme was essentially an additional fee of $80 on car registration.

“The way that is spent is the interesting part,” he said.

“We’ve always said Australian farmers are the answer and not the problem, so if they want to create a market mechanism to allow us to do better farming practices and plant trees and pay us for it, then that’s welcome.”

Mr Broad said if the government was serious about reducing emissions and improving the Australian standard of living, the additional money should be put into rail infrastructure.

He said utilising the rail network would have the least impact on the environment.

“No-one is even talking about that but that is quite strategic,” Mr Broad said.

“It would probably have a better output than planting a tree.

"The announcement is very sketchy, hollow and it does smack more of electioneering."

The government also plans to release a Victorian Food Strategy, to help ensure a sustainable food supply for all Victorians.

Environment and Climate Change Minister Gavin Jennings said the government will invest in research into how to maintain and enhance the amount of carbon stored in our natural eco-systems by analysing the science and practice of soil carbon sequestration.

“This research will give government a better understanding of how best to achieve our aims of harnessing carbon storage in our natural environment with supporting a sustainable timber harvesting industry,” he said.