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Natural Capital
Perth NRM’s Natural Capital Accounting project was delivered in partnership with Integrated Futures and was supported by funding from the Western
Australian Government’s State NRM Program, and Commonland. This project was also made possible thanks to the support and encouragement from our industry partners, including RegenWA, Wide Open Ag, Chem Centre, Sage Consultancy, and Cibolabs.
On-Farm Natural Capital
Read CSIRO's Natural Capital Handbook here
Click HereNatural capital is the stock of living and natural resources on a farm or property.
Natural capital supplies ecosystem services.
Natural capital could include vegetation, soil and microbes, water (above and below surface), wildlife and livestock, crops, pastures, riparian areas, and biodiversity corridors. Natural capital also extends to assets and resources that we bring onto and export from the farm, such as plant and animal products, fertilisers, water, and sediment runoff.
Ecosystem services are the contributions that ecosystems provide for human wellbeing.
Humans can undertake environmental services to support ecosystem services.
Ecosystem services include things like carbon sequestration or storage, biodiversity conservation, habitat for predatory insects and pollinators, fodder for livestock and sale, soil regulation services, composting functionality, shade and shelter, reduction of erosion and nutrient leaching/runoff, and quality water cycling. These may make direct or indirect contributions to human health and wellbeing.
Environmental services are activities performed by humans that protect, manage, restore, or improve natural capital and ecosystem services.
Revegetation and protection of riparian zones, (erosion control), Fencing to exclude stock, protection of culturally significant sites, pest and weed control, holistic grazing management; and protection of critical habitat are all examples of environmental services.
Conserving and Improving Natural Capital
Read about WA farmers who are conserving and improving their natural capital
Click HereConserving the biodiversity currently existing on your property is an important aspect of managing your natural capital. Farms contain much of the remnant vegetation across the country and these patches of remnant vegetation provide much needed habitat for endangered animal and plant species.
Management actions you can take to conserve your natural capital include:
- Conserving remnant natural vegetation, including isolated paddock trees.
- Fencing remnant vegetation and farm dams (avoid using barbed wire as this can injure wildlife).
- Keeping fallen timber and dead trees for habitat
In addition to conserving the existing natural capital on your property, there are a number of actions you can take to improve or enhance natural capital as well.
Management actions you can take to improve your natural capital include:
- Revegetation
- Establishing native shelterbelts
- Connecting remnant vegetation patches
- Encouraging pollinators and other beneficial insects
- Installing artificial nestboxes
- Installing an artificial floating island on your farm dam
- Reduced or no-till
- Using legumes in crop rotations
- Ten ways to improve natural capital on farms
- Powerful pollinators – Jarrah forest of WA
- Powerful pollinators – Avon Wheatbelt: WA
- Powerful pollinators – Swan River of WA
- Creating practical shelterbelts on your property
- Protecting and enhancing native vegetation
- Enhancing farm dams : What to plant in and around your dam
- A guide for managing erosion on your farm
- Revegetation Guide by soil type for the Wheatbelt
Financial & Production Benefits of Natural Capital
Read the full 'Farming For The Future' report here
Click HereThe Farming For the Future landholder survey revealed that the potential for private financial benefits is the most compelling driver for producers to invest in natural capital improvements. This is supported by findings from Perth NRM and RegenWA’s Natural Capital accounting report. This report also found that financial benefits were consistently the main motivation for farmers assessing and enhancing their natural capital. The Farming For The Future analysis of 113 livestock farms indicated that natural capital is positively correlated with production efficiency across a number of natural capital indices. This positive correlation can be attributed to improved productivity, reduced input costs, and increased business resilience.
The Farming for the Future report identified statistically significant relationships between production efficiency and three natural capital indices; ecological condition, proximity, and ground cover. Proximity and ground cover showed a positive relationship with natural capital, suggesting that farms with higher ground cover achieved higher levels of productivity over our study period. Ecosystem services provided by on-farm vegetation may be more impactful when vegetation is close enough to production areas to influence the production process. In relation to ecological condition, production efficiency is positive at low natural capital scores, but negative at higher natural capital scores beyond a specific threshold.
The Farming For The Future report indicated that farms with high natural capital had lower input costs across a number of cost types, including energy, fodder, health and labour. Therefore, natural capital may support production efficiency by replacing / substituting for some of these inputs.
Farms with higher natural capital are associated with higher levels of resilience to both climate and market shocks than coventional farms, evidenced by the report. Natural capital may contribute to building climate resilience by increasing water retention in farm soils. It may add to financial resilience and improve financial performance due the low-cost relative to manufactured inputs. Unlike these conventional, synthetic inputs, the ‘price’ of natural capital is not subject to volatility of international market shocks or input supply chain disruptions.
In the report, natural capital was positively correlated with financial performance (gross margin and EBIT). Optimised natural capital levels delivered higher EBIT with median ~$70 /ha/yr higher in the Western region, depending on the farm type. Differences in gross
margin were of a similar magnitude.
Assessing Natural Capital
View a sample of a farmer's NCA report here
Click HereIn addition to the direct financial and production benefits outlined above, there are many reasons why farmers may want to undertake natural capital accounting.
Natural Capital accounting assesses the condition of natural capital, and tracks changes over time. Tracking these changes can lead to more informed decision
making, positive environmental outcomes, and improved wellbeing for humans and other lifeforms. Baselining and tracking natural capital means farmers can be prepared for increasing pressure from supply chains, the finance industry, and governments.
Ultimately, natural capital reports provide farmers with evidence-based baselines of their farm, which can be used to prioritise activities, focus efforts on positive or negative impacts, use as a farm risk mitigation plan, and give them leverage when negotiating with financial or insurance providers.
Delivering evidence-based insights into on-farm natural capital and its links to increased production across further regions and enterprise types will help to drive large-scale industry adoption of improved NC management.
A variety of methods are available for measuring on-farm natural capital.
Accounting For Nature‘s methodology catalogue can be found here. Certain methods, such as the Accounting For Nature and Landcare Native Vegetation method are suitable as entry-level methods able to be carried out my landholders.
The RegenWA utilised a methodology based on La Trobe University’s Farm-scale Natural Capital Accounting Project throughout their own project. This method provides in-depth insights into a farm’s underlying natural capital asset base across a range of indicators. The three main sections of a natural capital report produced using this methodology are Natural Capital Asset Accounts, Ecosystem Service Accounts, and Environmental Performance. These may include assessments of the following:
1. Natural Capital Asset Accounts (register of natural capital assets (type, condition and extent), and biodiversity assets (birds, native plants)).
2. Ecosystem Service Accounts (invertebrate-based surrogates for pollination, decomposition and pest control services, measures of soil condition – ground cover and soil organic carbon, forage production, shade and shelter services.
3. Environmental Performance (greenhouse gas emissions position, rainfall use efficiency, use of non-renewable resources, resource-use intensity)
Our own NCA project employed the following methodology:
Farmers who participated in our “Measuring On-Farm Natural Capital in Western Australia” project said the following of their motivations and experiences:
“This NCA report…reminds us where we have achieved good things; this kind of thing could be a good baseline to measure condition over time; it shows us our weaknesses and potential for where future work can be done; and done well, it could be a helpful summary to explain to stakeholders what work we’ve done, and why we’re planning what we’re planning.”
“Farmers quite often rely on technology to ‘stay in the game’. To ignore your natural capital and to not account for maintaining its integrity, especially ecosystem health, will see those dreams turn to dust.”
“I found the Natural Capital Accounting process very userfriendly and rewarding by gathering data and providing substance to the importance of incorporating ecological values into future farm systems.”
“I’ve been working…to establish an independent baseline that represents production, emissions and the natural capital on my farm. This data will provide input into decision making and when negotiating with supply chains and banks.”
“Natural Capital Accounting helps enable land managers to quantify their greater community stewardship actions and environmental services including positioning around achieving net zero emission operations.”
Soil Assessments
RegenWA's Involvement in Natural Capital
Read our NCA report 'Natural Capital Accounting: Measuring On-Farm Natural Capital in Western Australia' here
Click HereOn August 27, 2024, Perth NRM published ‘Natural Capital Accounting: Measuring On-Farm Natural Capital in Western Australia’.
This report marks the completion of the project “Measuring On-Farm Natural Capital in Western Australia,” in partnership with Integrated Futures, funded by the WA Government’s State NRM Community Stewardship Program and through the Commonland Foundation. The project aimed to develop a robust framework for WA
farmers to measure and track changes in their natural capital over time by providing detailed Natural Capital Accounting (NCA) reports and a comprehensive database platform. These tools enable farmers to make informed management decisions, enhance communication of their
environmental performance, and ultimately improve their land stewardship practices.
RegenWA and Perth NRM have successfully completed 35 on-farm natural capital assessments through Farming for the Future and Integrated Futures research projects which included:
- In-field collection of data, farmer interviews and farm advisor negotiation;
- Data collected included soil collection (Visual Soil Assessment only), ecological attributes including ground cover species, ground cover percentage, height of sward, natural assets, remnant vegetation, riparian vegetation etc;
- Collecting paddock management history;
- Mapping and data imputation; and
- Report collation (in collaboration with Integrated Futures)
Key Project Outcomes:
1) Participating farmers have a comprehensive NCA report which they can use as a baseline for on-going measuring, monitoring, and managing of on-farm natural resources, and to verify and demonstrate their land stewardship practices.
2) Government and other public investors have increased their capacity and capability to guide, measure and evaluate the impact of their investment in NCA in WA.
3) An interactive database platform has been developed, allowing farmers to evaluate, manage, and track their NC going forward.
4) Increased capacity of industry to understand what NC and NCA is, how it can influence farm performance, and the co-benefits NC provides.
5) This project has highlighted the need for WA-specific datasets due to its unique agro-ecological systems and farming enterprises and therefore on-going research and development is required.
RegenWA team members are accredited Accounting for Nature General Experts.
This means we are qualified to carry out natural capital assessments that enable landholders to become certified through the Accounting For Nature framework.
By gaining certification through Accounting For Nature, landholders can account for and communicate the condition of Environmental Assets in an Environmental Account.
Please get in touch if you are interested in completing an account for your property.
The RegenWA team have conducted numerous presentations to farmers and industry to highlight the benefits on-farm natural capital has to production and the environment, and are eager to continue this.
If you’d like our team to give a presentation, host a webinar, or work with you directly on anything related to Natural Capital or our project, or work with you directly, please reach out to discuss this.
