Lifting farm gate profits: the role of natural capital accounts (RRD030-1617)

The objective of the Rural Research for Development and Profit program is to lift farm gate profitability of primary producers across Australia, by investing in emerging tools and technologies, strengthening the path to adoption and fostering new collaborations. This project targeted the program objective of better management of natural resources to improve certainty of supply, sustainably develop new production areas and improve the resilience of existing production to potential future shocks associated with factors such as climate change. 

The project tested the application of natural capital accounting in three primary industries: cotton, fisheries and forestry. Natural capital accounting measuring stocks of ecosystem assets, their changes through time and the flow of ecosystem services from these ecosystem assets. The ‘invisibility’ of these stocks and flows constrains the capacity for industries to measure and report their environmental performance and track against financial performance. Initially we hypothesised that natural capital accounting could increase farm gate profitability via three pathways: 

 • increased sustainability credentials and access to premium markets,

discounted finance associated with reduced natural capital risk,

improved capacity to engage in emerging environmental markets.


The primary objectives of the project were to:

develop detailed conceptual models of the relationships between natural capital and the industries

use these conceptual models to define the scope and objectives of natural capital accounts

trial the application of natural capital accounting.



This work was supported by funding provided to FWPA by the Department of Agriculture, Water and Environment (DAWE), via the Rural R&D for Profit program (16-03-003).