Putting natural capital on farm accounts

La Trobe University is working with 50 farmers across Victoria, New South Wales and Tasmania to improve their environmental performance and climate resilience.

Ecologist Dr Jim Radford from the Research Centre for Future Landscapes at La Trobe University is collaborating with nine industry partners to lead new research on the importance of ‘natural capital’ for farm production.

Farmers participating in the ‘Farm-scale Natural Capital Accounting’ project will receive a set of accounts that collate data about the natural assets on a farm – similar to how economic accounts collate financial data. In combination with existing financial, farm management and production data, the natural capital accounts will allow farmers to measure their environmental performance in relation to their agricultural output.

“Natural capital underpins all aspects of agricultural production,” Dr Radford said.

“It includes all elements of the natural environment on a farm, such as the soil, native vegetation, pastures, crops, and water resources. Natural capital also generates a range of ecosystem services that are otherwise invisible in financial accounting systems, such as air and water filtration, flood protection, carbon storage, pollination of crops, and habitats for wildlife.”

Dr Radford said natural capital accounts (NCA) offer farmers a standardised and un-biased tool to understand whether their management is building, maintaining or using up their natural capital. He said this knowledge is becoming increasingly important as farmers strive for greater sustainability and carbon neutrality.

“Around 58 per cent of Australia is farmland, so it is critical we work with farmers to conserve native animals, plants and other important resources,” Dr Radford said.

“Through our research, we will develop a digital platform that enables farmers to easily showcase their natural capital accounts and demonstrate they can be productive and profitable while maintaining ecosystems and biodiversity. By utilising NCAs, we can work more productively with farmers to improve sustainable agriculture and food production practices,” Dr Radford said.

Sixth-generation farmer Paul Dettmann of Cassinia Environmental in Kyneton, Victoria has signed up for the initiative.

“My family have been grazing merino sheep in Central Victoria since the 1850s. In addition to the farmland we manage, I lead land-based restoration and biodiversity protection projects through my role as CEO of Cassinia Environmental,” Mr Dettmann said.

“My life is embedded in the agricultural sector and I am drawn to the idea of natural capital accounting and what it could do for my business. Given we have such amazing assets on our land, it is important for me to understand how we can measure, enhance and protect them.”

This project is jointly funded through La Trobe University and Odonata Foundation, and the Australian Government’s National Landcare Program’s Smart Farming Partnership scheme. It involves 10 consortium members from across the agricultural, government and non-government organisation sectors:

  • La Trobe University
  • Integrated Futures
  • Birchip Cropping Group
  • Bush Heritage Australia
  • Landcare Australia
  • Odonata
  • Sensand Technologies
  • The Arthur Rylah Institute at the Victorian Department of Environment, Land Water and Planning
  • Tiverton Agriculture Impact Fund
  • Trust For Nature

Caption (left to right): Dr Jim Radford from La Trobe University, Alison Frischke from Birchip Cropping Group, and sixth-generation farmer Paul Dettmann.

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