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The concept of natural capital revolves around quantifying the economic value of natural resources such as water, air, soil, and biodiversity. When applied to agriculture, it introduces an exciting new approach to improving productivity and profitability.
Farming for the Future
Preliminary findings from Phase 2 of the Farming for the Future research project indicate that investing in natural capital can lead to increased productivity and profitability. This study collected data from 130 Australian farms, including cropping enterprises across the country.
Natural Capital Research: A Benchmark for Climate-Resistant Farming
Funded by the Macdoch Foundation and affiliated with the Australian National University, the Natural Capital Research project aims to establish a reliable framework for natural capital accounting in various agricultural settings. It serves as a benchmark for emissions and the overall condition of natural capital, supporting policies and private investments towards a prosperous, climate-resilient, and eco-friendly agricultural sector.
Leading the program is Dr. Sue Ogilvy, an expert in natural capital accounting with a strong background in livestock grazing research. Her specialization lies in developing methods to help agricultural enterprises estimate the monetary value of their productive capacity.
Interestingly, high productivity levels can be achieved by both intensive livestock enterprises with low natural capital and those with higher natural capital. However, farms with high natural capital were found to be more profitable. This revelation presents an opportunity for grain farmers to improve outcomes by focusing on enhancing their natural capital.
Farm Management Practices for Natural Capital
The research has also developed measurement indices for each natural capital component, aligning them directly with farm management practices. The team collaborated with farm advisors, natural resource management experts, and scientists to validate their findings.
Farm management practices that aim to improve natural capital focus on sustainable approaches to conserve and enhance the environment. Examples of these actions include soil conservation, nutrient management, water management, biodiversity enhancement, introduction of trees into farming systems, carbon sequestration (storing carbon in soils), integrated pest management, and livestock management.
With the support of philanthropists, government agencies, banks, and industry bodies like Meat & Livestock Australia and Australian Wool Innovation, the plan is to expand the research to more farming businesses across Australia. This initiative aims to demonstrate the value of natural capital in agriculture by showcasing the benefits farmers can reap when managing natural capital in a manner that delivers environmental outcomes beneficial to the public.
The concept of natural capital offers a transformative approach to agriculture, with significant potential to improve farm profitability and productivity. The findings underscore the importance of sustainable farm management practices that enhance natural capital. By adopting these practices, farmers can not only increase their profitability but also contribute to environmental sustainability and climate resilience.
The Government has reinvigorated the 120% skills training and technology costs deduction for small and medium business.
An election ago, the 2022-23 Budget proposed a 120% tax deduction for expenditure by small and medium businesses on technology, or skills and training for their staff. This proposal has now been adopted by the current Government and details released in recent exposure draft by Treasury.
From 1 July 2022, the standard Superannuation Guarantee (SG) rate increased from 10% up to 10.5%. It’s part of the government’s commitment to increase the SG by half a percent each year until 2025, when the SG rate will reach 12%.
The Australian Federal Budget 2022 was delivered on 29 March 2022 by the Federal Treasurer Josh Frydenberg.
See our breakdown of the tax measures impacting small business in Australia.
Smith Shearer, in collaboration with Kitto and Kitto Lawyers, will be hosting the ECCI Business After Hours on 12 August 2021
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