Farming for the Future research shows nature capital and profitability link

The Farming for the Futures research program collected financial, ecological and social data from 130 Australian grazing and cropping enterprises. It found those with higher natural capital value were more profitable, productive and climate resilient.

Farming for the Future director Sue Ogilvy said although there was still more work to do, the initial results established that nature capital was positively related to business performance.

"We are very confident of those findings...we expect the impacts of this are profound," Dr Ogilvy said.

"Nature capital is still on the fringe and often seen as something that's nice to do if you've got the time or the money. We want to drag it on to the economic books by showing it has value."

The report found most of the relationships between natural capital and farm business performance observed were positive and linear.

Dr Ogilvy said that means most of the farms sampled, and similar farms within the broader farming population, could improve their business outcomes by improving their natural capital.

The strongest nature capital-to-profitability indicators included overall canopy cover, DSE per hectare and the limited use of chemicals.

Vanguard Business Services principal Mark Gardner said farmers and their advisers were hungry for natural capital data, because it opened up a whole new area of thought about how to shape farm businesses for the future.

"We really need to understand the relationship between natural capital and farm profitability... it sounds crazy, but there are not a lot of resources around this," Mr Gardner said.

"If we can base businesses on the free inputs from nature, that comes with lower costs and risks, and better resilience to drought. But we need clear and credible research to show us how.

"Then we can start to build it into operations and it becomes a part of the normal management."

The study estimated an industry-wide transition to lift nature capital would cost on average $2500 per farm, or $1 to $2 a hectare.

National Farmers' Federation chief executive Tony Mahar said the study laid the foundations for farmers to consider where changes could be made on their property, while giving them an idea of the cost-benefit ratio.

"One of the key premises for practice change with respect to natural capital is that you can't manage what you can't measure, and you won't invest in what you don't value," Mr Mahar said.

"By empowering farmers to invest in natural capital... farmers will be better equipped to make decisions about natural capital to make their businesses productive, profitable and resilient under climate change."

The Farming for the Future program is now seeking to expand its research to 1500 cropping, livestock and mixed-enterprise properties across Australia.