RESEARCHERS have begun trialling a tool farmers for farmers to measure their natural capital, and then employ the data to negotiate a better deal with banks or tap into the conscious consumer market.
La Trobe University is working with 50 farmers across Victoria, NSW and Tasmania to improve - and more importantly measure - their environmental performance and climate resilience.
Farmers participating in the project will receive a set of accounts that collate data about the natural assets on a farm, in the same way economic accounts collate financial data.
La Trobe University ecologist Jim Radford said the goal was to create reports and tables farmers could take to other stakeholders - such as potential buyers, banks, insurers or stewardship programs - to demonstrate they were running their farm in a sustainable way.
"The vision is to have an account that can be used as a verifiable document about the way farmers are using their property," Dr Radford said.
Some natural capital elements are easy to measure, such as soil carbon and ground cover. But much of it is inherently difficult to quantify, such as biodiversity, pollination services and pest control.
"The difficult part - and farmers know this - is that a farm is an integrated system," Dr Radford said.
"There are different aspects of the farm that are sometimes working together, sometimes in opposition, to generate a whole range of services. Not just the product taken off to be sold, but the supporting ecosystem services that underpin that.
"Pulling all that apart is really difficult."
The study will involve a combination of field visits, desktop work and information from farmers.
"It's hard to say what the exact contribution of this specific shelter belt or that paddock is. But by doing across a number of farms, hopefully we start to see some trends emerge," Dr Radford said.
"We're not saying highly-modified paddocks can't still score high in natural capital."
If the trial is successful, farmers will have a repeatable way to measure their nature capital.
"They can be measured again down the track and farmers can say 'look, I'm stable or improving'," Dr Radford said.
"They can take that to insurers or banks and say 'I'm resilient against climate change, because my ground cover is above 80 per cent and my natural capital is high'.
"They can hopefully negotiate a better interest rate or premium because they can demonstrate they are a lower risk."
Dr Radford said there were a "whole range of markets crying out" for a tool that could quantify natural capital.
The accounts will help farmers tap into other income streams, such as environmental and biodiversity stewardship programs or carbon farming.
Consumer conscious brands - such as Patagonia - that will only source their fibre from properties with transparent environmental management systems, while big international trade players such as European Union and the United States are considering introducing a carbon tariff on imports.
Sixth-generation farmer Paul Dettmann, based in Kyneton, Victoria, has signed up for the initiative.
"My family have been grazing merino sheep in central Victoria since the 1850s," 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 federal government's Smart Farming Partnership scheme.
The study has been in the stage for a year and the trial will go until mid-2023.