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Accounting for Natural Capital In Agriculture Helps farmers “Secure Finance & Attract Investment” – National Bank of Australia

March 07, 2017 |

This article was originally published on Farm Online National

“A world is fast approaching where being able to demonstrate good natural resource management will be critical to a farmer’s ability to secure finance, negotiate lower interest rates and attract vital investment.

It will be a world where good soil health, resilience to water stress, climate risk, pest outbreaks and reputational or legislative risks are crunched into the accounting figures in the same way financial or infrastructure assets are. And it’s not before time, according to progressive producers who are already using their natural resource management to market products.

The concept of natural capital – the stock of ecosystems and the services like clean water, healthy soils and pest control they provide – was explored in depth at this year’s Australian Bureau of Agriculture Resource Economics and Sciences (ABARES) Outlook conference in Canberra.In stark contrast to the traditional approach of economists who take natural capital to be intangible and unknown, pioneering thinking in the banking sector is placing strong value on farming ecosystem management.

Environmental economist James Bentley, from National Australia Bank, said robust natural capital accounts have a role to play in supporting farmers to market their products, secure finance and attract investment.He said it was imperative farmers collecting environmental data layer in on-farm economic elements so that their data might underpin investment decisions into Australian agriculture.

“The point of using the frame natural capital is not to narrow the way in which we appreciate nature but to amplify the imperative to measure, manage and invest in natural systems with the same due diligence and rigour we apply other forms of capital, be it financial, human or built,” he said….”

Read on at: Farm Online National.

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