Rewarding soil stewardship

WHY THIS PROJECT IS IMPORTANT

A previous Soil CRC project identified that many finance stakeholders and growers value good soil stewardship and appreciate that it is generally profitable. However, there is a recognition that the link between healthy soils and profitability needs to be further demonstrated to unlock investments in soils and activate financial markets to reward soil stewardship.

This project configured, trial and evaluate novel financial mechanisms to reward soil stewardship. A three-stage approach will involve grower groups BCG, Riverine Plains, WANTFA and the finance sector (Deloitte and NAB).

In short: This project configured, trialled and evaluated novel financial mechanisms to reward soil stewardship. 

Project focus

The project worked to improve connections among soil scientists, growers and the finance sectors and facilitated the activation of financial markets to reward soil stewardship. It aimed to:

• Identify key soil/farm performance measures that were relevant, understandable and accessible to the financial sector, while reflecting farming best practice and leading soil science evidence.
• Improve the organisation and accessibility of soil science and first-hand grower evidence about the cost of key soil constraints and the most financially viable way of managing them.
• Improve confidence in the link between soil stewardship and farm financial resilience among the financial and farming sectors.
• Facilitate the creation of at least one pilot action activating financial markets to reward soil stewardship.

The project reviewed the benefits, costs and uncertainties related to different soil stewardship practices and the available returns from different markets/sources.

The analysis focused on the key soil constraints impacting four major Australian growing regions and potential returns from soil stewardship. This included maintained/increased productivity, reduced input costs, higher prices for products with soil stewardship attributes, revenue from ancillary environmental markets such as carbon sequestration, public or philanthropic incentives, and higher land valuations or lower cost of capital from debt or equity markets.

A series of intensive workshops also connected the farming and finance industry including banks, investors, valuers and corporate advisors.