New research uncovers opportunities for environmental income

On International Soils Day the National Farmers’ Federation and KPMG launched their latest joint report, outlining how Australian farmers can set themselves up to tap into global demand for sustainable investments.

It is a well-known fact that Australian farmers are at the frontline of Australia’s conservation efforts, managing 51% of the countries landscape.

Despite this, efforts to reward and offer incentives for best practice have often been sporadic.

The report, released today, recognises the need to create markets that connect investors who are willing to pay for positive outcomes, with the farmers who are doing great things for the environment.

The research shows that there are new opportunities for farmers to unlock the value of natural capital, such as the land and ecosystems that underpin farm production and that new sustainable finance mechanisms could unlock billions in additional farm income.

NFF President Fiona Simson welcomed the report and its key recommendations, stressing the fact that farmers play a critical role in caring for the environment.

From left – NFF CEO Tony Mahar, Minister for Agriculture, Senator Bridget McKenzie, NFF President Fiona Simson, KPMG’s Partner National Food & Agribusiness Lead Robert Poole and Director Head of Social & Sustainable Finance Carolin Leeshaa at the launch.

“Unfortunately, efforts to incentivise and reward environmental practices historically have been short-term or based on ad-hoc grants and programs. They have also been interfered with through complex and poorly understood regulatory requirements,” Ms Simson said.

“We need a comprehensive approach that delivers the right incentives, and the right outcomes for farmers and the environment.”

The key recommendations of the report were:

  • Implement the $30 million Pilot Agricultural Stewardship Program including supporting a research project to further develop these instruments;
  • Establish a $1 billion National Biodiversity Conservation Trust as per the Craik Review recommendations; and
  • The development of a National Natural Capital Policy and Government-backed standards and trading structures.

Robert Poole, KPMG National Food and Agribusiness Lead Partner, said the report shows that there are tools readily available for farmers, we just have to make them work.

“There is an increasing opportunity to provide enhanced and new investment vehicles to the market that deliver ongoing financial incentives and rewards to farmers for improving environmental outcomes,” Mr Poole said.

“Through newly constructed financial instruments, such as green bonds and pay for outcome funds, we can provide investable agricultural options for institutional investors, government, industry and philanthropists directed towards improving the environment and delivering social finance options for the market. 

“These options provide a return for the community, environment, investors, farming sector and society at large.”

A Return on Nature can be found here.



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