A $9 million contribution from the Federal Government could not save one Northern Territory farm, with news Henbury Station has gone bust throwing doubt on the carbon farming program.

R.M. Williams Agricultural Holdings bought Henbury Station in 2011 for $13 million, with a $9 million helping hand from the Federal Government. Now that company has gone into receivership, the future of all its assets has become unclear.

Henbury had been a test site for the Federal Government's Carbon Farming Initiative, which allows farmers and land managers to earn carbon credits by storing carbon or reducing greenhouse gas emissions on the land. These credits can then be sold to people and businesses wishing to offset their emissions.

It seems Henbury could not do enough to rack up the amount of credits needed to save it, Luke Bowen from the Northern Territory Cattlemen's Association says liquidating the station's stock would be a mixed blessing for the local industry, “It does reduce the critical mass of the industry in the region," Mr Bowen said, but on the down-side, "it reduces the amount of people employed.”

The Carbon Farming Initiative is still being developed, recently moving in to its third phase of drafting regulations. More information is available from the CFI website.