Natural capital courses and information for land managers

We offer a high integrity option for natural capital.

So how are we able to do that? We are established under the Biodiversity Conservation Trust Act as part of the 2017 National Native Edge Reforms to offer long-term imperpetuity, untitled agreements and protection for vegetation or biodiversity.

We are all about private land conservation, so we only work with private land holders.

So we are focused specifically on private land, essentially, and supporting you to do what you're often already doing.

We are prioritising, we prioritise our investment.

We have a very complex way of doing that, but if you were to look at the map of how we prioritise our investment, you would see that it is very highly focused on the sheep wheat belt of New South Wales and then the areas to either side of that as a priority area.

We do tend to target specific conservation values that we might be looking for, so species or particular ecosystems that we're looking to protect where they're particularly at threat, but we are very prioritised.

You can read that on our website.

We do have an investment strategy if you're interested in seeing where we have invested money and where we are intending to invest money into the future.

Our agreements are all long-term.

Majority of them are in perpetuity and untitled, so they go from you as the current land holder to the next land holder and the next land holder.

We offer financial support for quite a number of our agreements, which I'll talk about in a moment, and we offer land holder and ecological support.

My role within our team is to support land holders to enter into agreements with us or even start the conversation.

Is it an appropriate option for you in this space? Go through that process with you helping you to develop an agreement that will work for you and your property and your farm business.

Then once you're signed up, particularly if you have financial support, you will see me every year.

This is not a sign up and then we walk away and we let you do your thing.

We are there as part of that agreement helping you to management adapting as times change, conditions change, and as you might find that we were targeting St John's Ward at the start of your agreement and you got on top of it.

Then we might start to look at funneling some of those funds that you have into another priority area in your agreement.

We also offer ecological support.

Part of our team, we have a number of ecologists on the team.

We do have our own monitoring program.

We are out there monitoring change over time on agreements to see that what we're doing, how we're managing, is actually having the desired outcome.

It is a really high integrity program that we offer.

It's an accredited monitoring system that we use.

I think it's outlined in the notes.

Definitely, if it's something you're interested in, we would love to chat with you about it.

We have quite a network, as you can see already, across the state.

That network is continuing to grow.

I think those figures were from August last year.

We have since had a number of programs since then and signed quite a few new agreements with significant thousands more hectares added to what you see there.

A program overview.

I might start, which is a bit odd, I'm going to start on the far right.

I'm actually not going to talk about the Biodiversity Offsets Program because the credit supply task force is here somewhere and John's going to talk about it.

Yes.

Revolving fund, that really is great for you to know that it's out there if you're looking to sell your property and you know you have a fantastic conservation asset on it and you think we might be interested.

We do actually purchase properties, put conservation agreements on them and then sell them on with that agreement in place.

Definitely something to keep in mind if property sale is something you might be considering in the near future.

Our two main streams that we have available in this region are the Conservation Partners Program which is our voluntary stream.

It's no annual payments associated with that but you do have access to grants under that.

That starts at a 20 hectare minimum for any vegetation type essentially.

Then we go into our funded stream which is our Conservation Management Program and our two main offerings in those areas are Conservation Tenders which is a reverse auction style participation process and the Fixed Price Offer Program which we have available every year or year.

We are currently assessing for Fixed Price Offer 8.

We're doing field work at the moment and we have Fixed Price Offer 9 open.

The Fixed Price Offer Program is a dollar per hectare per annum rate.

We set the figure based on land values and your local government area.

Then we talk with you essentially about what we can manage.

We generally start with fencing, track maintenance, weeds, pest control.

Some very basic actions that you're probably already doing on your farm.

We could put in a new fence as part of that agreement.

We would be reducing grazing generally.

We do have grazing allowances depending on the vegetation type or stock exclusion.

It just depends.

Conservation tenders, I'm going to talk about an example one in a moment but essentially a reverse auction.

We are looking to target very high priority areas or species.

We then ask landholders in a specific area to tell us what will it cost you to manage it.

We work out value for money essentially.

The cost of your bid versus the biodiversity value of your site.

We fund to a point where we no longer consider it to be value for money.

That's very variable.

It depends on who else is in the tender with you as to what is considered value for money.

It's a really great process to be a part of I think.

We've secured some beautiful conservation assets and have some amazing landholders in our network as a result of those programs.

You can see on the bottom there the cultural biodiversity pilot offer very similar to fixed price offer but targeted at indigenous landowners.

We have closed the AOIs for that now.

We are piloting it in this region and we'll be starting assessment for that very shortly.

Watch this space if you do know some indigenous land managers that might be interested.

Get them to get in touch with us because we're hoping that it will be successful and we'll be able to roll it out across the state.

Very quickly, here's an example of a conservation tender that we ran recently.

We are currently in the process of, we're almost at signing of agreements for this tender now.

It's a trial to pilot biodiversity plus carbon partnered with the Clean Energy Regulator as part of their environmental plantings project.

This was a great way for us to be able to support really high integrity biodiversity claims in a carbon area.

Landholders generate the carbon credits and are able to either use them on farm for carbon neutrality or sell them into the carbon market if they so choose.

We targeted, very targeted at threatened ecological communities in highly fragmented landscapes.

That was from east of Holbrook to about Deniliquan.

We actually had a five hectare minimum on remnants in that area because we were targeting box gum, woodlands and inland grey box which as you know if you've been for a drive through that area, they're in very small patches and don't often meet that 20 hectare minimum that we start with for TEC.

What does that actually look like? This is an example of what that might have looked like.

We have the larger conservation area and then the carbon planting sits within that conservation area to expand that area.

The idea here was that we would then, once the carbon permanence period ended at 100 years, the conservation agreement sits over the top of that and it recognises that those carbon plantings actually have quite a lot of biodiversity significance at the 100 year mark.

They've been there for 100 years.

They've become habitat.

That's then offering protection to those areas post the carbon project ending I suppose.

Again, that includes funded management activities for site establishment and annual management of the remnant area.

Also once the carbon reaches that 100 year mark, there's payments to support managing that as a biodiversity area as well.

Thank you very much.

I'm going to wrap up.

If you have any questions, please come and chat with Matt and I at the track trade store.

We'd love to chat with you.

There are a few land holders in the room too if you'd like to chat to someone in the network who's had a go at it.

Thank you so much Cassie.

So many great examples of how land managers can be involved.

As Cassie said, they have a trade store over where you'll have lunch and she'll be here all day to continue these conversations.

Cassie will also join us up here on the panel in about 20 minutes.

So if you have questions, please do save.

[ENDS]  

But I'd just like to say thanks to Kate and LLS for providing the opportunity for me to come and talk how I'll have that conversation with you around natural capital opportunities and the role of where biodiversity credits fit in that space.

I'd also just like to start with acknowledging our country and particularly the Wiradjuri people and we're really grateful for the custodianship of the lands and waterways that we rely on for our environmental services and just pay my respects to elders past and present and any other Aboriginal people who are in the audience today.

I'd say part of the conversation today is hearing about a range of different natural capital opportunities for landholders.

I'm concentrating on the creation and selling of biodiversity credits as part of the Biodiversity Stewardship Agreement Program.

And that all, those biodiversity credits form what we call the New South Wales Biodiversity Market and really the New South Wales Biodiversity Market is, it relies on the creation of different types of biodiversity credits.

There's a range of different, of what those different types of credits represent.

Some around plant communities, so the different types of native plants and how they occur in the landscape.

Other types of credits are for specific species as well.

The credits get created through the establishment of a biodiversity stewardship agreement and so that's, as Cassie alluded to, it's one of the agreements that sit as part of private land conservation and it's the Biodiversity Stewardship Agreements or BSAs, they run with the land so they get registered on title, they are in perpetuity and they have a funding component to them and also a management plan.

So I'll get into a little bit of that as we go through the presentation.

The credits can provide funding for a lot of the farm management activities that you're doing anyway and they're mostly, the buyers of those credits are mostly proponents of development so supporting the transition to renewable energy.

A lot of large infrastructure projects as well are seeking different types of credits as well as housing, residential construction and those types of activities.

There's also that opportunity for credits to be sold for other purposes so they're not purely credits that support or providing offsetting so they can be for businesses investing in sustainability or for conservation charities that promote or care for particular types of species.

New South Wales has got the largest established credit market in Australia.

This is a snapshot from our market sales dashboard and also shows, it provides a source of information around the number of sales and the types of credits that have sold and information about the latest price as well as I guess what that average price is over time.

So information is available online and that value you can see is under the current offset scheme and there's a similar dashboard that has the market value for biodiversity credits from the biobanking program.

There's a range of different benefits of a BSA and there's been a lot of, I think, interest in natural capital is around diversification and you hear the words resilience and it can provide a future proofing to droughts and some of those climatic ups and downs that we certainly live with quite often in Australia and so it's that alternative income stream that can be helped to future proof, add diversification to the property but also make the money that you're investing back into the management of that property, makes your farm a more enriching environment which can also have those production benefits that we've been hearing about earlier.

A key component of a stewardship agreement is the management plan and that's a key part for landholders to invest in, invest their time into making sure that that management plan is fitting with their aspirations for the property.

So a stewardship agreement can fit on a, the shape of the stewardship agreement can be flexible so it doesn't have to sit over a whole part of the property and in reality it best suits in those areas where they're less productive, they're not looking, agreements aren't looking to be established over those prime productive areas so it fits into that farm configuration but how you, the management actions that you're signing up for, it's really important that as landholders have their input into it and the typical actions around weed management pest control, there can be restoration activities around replanting and enhancing habitat for different plants and animals.

Also where possible, fire is a key part of the management plan as well.

There is opportunities for stock grazing to be part of that on a stewardship agreement because it's around looking for improvement in conservation or in biodiversity, it's looking at how to configure that grazing regime so that it can demonstrate that benefit or that increase in biodiversity and species richness of that grassy understory.

The other key component of a stewardship agreement is the total fund deposit and so that's the amount of money that gets invested into the Biodiversity Stewardship Payments Fund that's managed by Cassie and her team in the BCT but it provides for an annual payment to the landholder.

That amount of money that you get each year is essentially the budget that you have for implementing those annual works and that's all set out as part of the agreement.

That's a really key part of the BSA obviously because its land is being managed under that conservation agreement and it sets out, it's making sure that there's enough money to pay for that ongoing land management over time.

Because it's registered on title, if that agreement sold, the TFD or those annual payments are transferred to the new landholder which can be also attractive for someone who's looking to manage a conservation area but also have the funds to do that.

Any additional money that's available from credit sales once the total fund deposit is fully met, that's money that goes straight to the landholder who created and sold those credits.

I won't go into all of the information at the bottom about different types of credits and prices but happy to have a chat to anyone through the day.

I've just got a couple of case studies and probably need to shake a leg with the time I've got left, two minutes.

This is a particular site that was established down at Denilliquin so it's kind of that range lands down on Hay Plain.

It was a range of different credit types that were created, some for plant communities, some for particular species, both flora, animals and plants.

You can see what the management is paying for around feral pest control, control of African box lawn which was quite prevalent on the property and also areas of where there's replanting and restoration going on.

Another site which is more of a grazing property or they're continuing to graze on a strategic basis up near Hill End, it's a much larger property and it has a total fund deposit of around 7.5 million which is paying for that ongoing management over time.

It does have a fair component of restoration going on that as well which is driving the higher total fund deposit.

I just want to finish up on a couple of ways of getting support for the stewardship agreement and probably the easiest document to get more information if you're at that early level is through the Stewardship Application Guide.

I presume the slides will be going out and so if you can't scan it now you'll be able to access that online.

There's lots of different credit types, not all of them are in demand but we've got a product that you can type in your address, your property address and it will come up with a list of credit types in your region that are in demand for proponents.

So it's, I guess if you're going down the stewardship pathway you want to be able to sell your credits and this is a way of finding out if the types of plants and animals on your property will create credits that are in demand for trading.

We also have a stewardship support program and that's open for another couple of weeks.

I think it finishes mid-May and as part of the stewardship support program we'll do an initial upfront assessment and it's really looking at validating your property to see if it has the potential for in-demand credits and it opens up a discussion around whether you want to go further into setting up a stewardship agreement and if you do and there's in-demand credits present then we can help fund the assessment costs which are obviously a barrier to setting up a BSA.

So if you're interested have a chat or again just goop search the credit supply task force and you'll find information about the stewardship support program.

Thank you.

Thank you John and we will have time for questions after.

You'll all notice that these are short, sharp presentations of 10 minutes each.

It's really valuable for you to see as much as possible and hear from as many people as possible.

Please note that the presentations are recorded so you will be able to have a copy of them after to send them off to members of your family, members of your community.

You'll also get a copy of the slides.

[ENDS]

Megan is a leader of Natural Capital Environmental Markets Initiative and she'll be introducing the topic of environmental markets.

Please make very welcome Megan Burkett.

Okay, hello and thank you for having me today.

So I'd like to begin by acknowledging the traditional owners of the lands on which we meet the Wiradjuri people and also pay my respects to their elders past and present.

So yes, I'm Megan Burkett from the Natural Capital and Environmental Markets Initiative and the purpose of this session is to introduce environmental markets as a framing for the environmental markets section of today's conversation.

I'm not getting my slides moving.

Yeah.

Okay, looks good.

All right, so in doing so there's three key messages I'd like to focus on for you.

The first is to introduce environmental markets and why there are growing opportunities and we've heard a little bit about that already from Catherine.

The second is to introduce a range of environmental market approaches and the third I'll explain why I think it's really important that landholders participate in environmental markets as leaders and as innovators and entrepreneurs and why landholders are in a really good position to do this and how this will benefit you and wider society.

Okay, so first key message, what are environmental markets and why are there growing opportunities? So I like to start before we get into that with just what is a market? So a market in this context is where parties exchange goods and services for money or other things of value and most of you are already involved in a whole range of markets, meat and livestock markets, grain markets, fruit and vegetable markets, everyday markets where we buy our food and fuel, property markets.

So building on this then, what is an environmental market? An environmental market is where parties exchange that same money or things of value but for environmental goods and services.

So the same as those other markets we just talked about but here we're exchanging environmental goods and services.

And environmental goods and services are things like natural assets or the natural assets and resources on your property, so soil, water, forest, wildlife, things you know about.

And ecosystem services are the services we derive from nature such as energy from the sun, land and conditions for producing food, water storage and filtration and climate regulation.

And then there's environmental services.

Now we define environmental services as the activities or management actions that people like yourselves do to protect, manage, restore or enhance nature.

So healthy soil and water management, protecting critical habitat, controlling invasive weeds and pests and there's other environmental services up here.

So now you may already know these activities as just on-farm management activities or that's natural resource management or that's sustainable land management.

But the term environmental services helps to reframe these activities and acknowledge the need, the role, the cost and benefit of these services in the context of natural capital in addition to their on-farm role.

Okay.

So how is an environmental market created? At its simplest an environmental market is created where there are parties willing to produce, supply or sell environmental goods and services.

These might be landholders, land managers, farmers, so many of you here today or it could be you in the future.

And when there are these parties willing to fund, to buy and invest in these things.

So these can be a whole range of parties, individuals, consumers, whole towns, businesses and industries, government and wider society.

So the environmental market is that mechanism for this exchange to occur.

Now of course the amount of money or the thing of value that people are willing to exchange depends on a whole range of factors just like traditional markets.

So it might be the benefits they receive from natural capital, the quality of the natural capital or services, could be scarcity, policy and legislation, supplier requirements, a whole range of other factors.

Now an environmental market can be a bit more complex like regulated carbon markets and biodiversity markets or an environmental market can be as simple as two individuals making a private exchange.

And I really want to highlight that latter point again.

So an environmental market can be as simple as two individuals making a private exchange.

So we heard from Catherine that there's growing demand for environmental markets from both sides.

So for landholders there's a range of reasons why environmental markets are beneficial.

So it could be to fund stewardship, it could be to create new revenue streams, diversify your income streams, access finance, offset your costs, meet your supplier needs and there's other motivations as well.

And these reasons are really unique for each landholder.

They're unique for you.

And getting clear on your motivations will really make it easier to decide which opportunities to pursue.

But there's also growing demand from that buyer side, from the funder side, the investor side.

So we heard that there's these growing markets for sustainable goods and services, increasing demand for carbon and biodiversity, increasing demand for sustainable supply chains and this policy and legislation that is and will continue to emerge.

So in response, of course, environmental market opportunities are growing for you.

Okay.

So second key message, what are the environmental market opportunities available? And I'm going to take really quite a broad view of this.

And the reason I want to do that is so that you have a more holistic understanding of what exists and what is possible.

And I guess the way that I like to come at this is to think about in what ways can you use markets in general to enable that environmental market exchange we just talked about.

And here are some of these ways.

And I hope that for many of you, there's a lot more than what you might have originally thought.

So let's go through this quickly.

So firstly, we've got business strategies.

So this is where you can pursue to create value or gain an advantage in commodity or other markets that you operate in from your sustainability or environmental performance.

So adding price premiums or accessing new markets that are looking for sustainable goods and services.

Cost saving approaches.

So this is where your land management or business costs might reduce by investing in natural capital.

So drought proofing now might save you money in the future and money overall.

So asset value is where your assets such as your property, your business, or you might have shares as part of your business, increase in value as a result of the improvements in your natural capital on your property.

So finance relates to financial products and mechanisms that reward those benefits.

Trading refers to those regulated and private trading schemes.

So things like your carbon markets, your biodiversity markets, cap and trade schemes, and others.

Taxes, levies, and charges.

So this is where they can be imposed on you for environmental reasons.

And in this case, your natural capital may help you to avoid those things.

And then finally, we've got incentive payments where investing in natural capital and environmental services may increase your eligibility for rebates, funding, and grants.

Now that's a lot.

And you don't need to be proficient in all of these approaches.

But I do really think it's important for you to be aware of these approaches so that you can consider all of your options more broadly and holistically and then decide which one is going to work for you.

Okay, so we can see that currently there are a whole range of market opportunities available.

And in today's conversations following from me, you're going to learn more about carbon markets, biodiversity markets, sustainable finance.

You've already heard about ESG.

And we'll hear some more.

Price premiums, incentive payments.

But beyond the already established markets, I'd like to invite you to think about the broader possibilities.

So you see, the beauty of markets is that markets are created by people.

They're created by us here today and others.

Which means we are not limited by what currently exists.

Oh, gone too far.

So I invite you on your lunch break or on your way home to think about this.

What natural assets, what ecosystem services, what environmental services exist on your property? And if you're still learning those terms and what they mean, come and see me at the lunch break and I'll talk you through them.

Who benefits from them? And how do they benefit? What value do they place on these benefits? And which of these market approaches we just went through could recognize and enable a market exchange and help you to continue to manage and enhance your natural capital and farm? All right, third and final message, and I'll try and speed this one up for your timing.

Great.

Okay.

This is probably my most important message for me personally, anyway.

Landholders and regional communities are critical stakeholders in environmental markets.

And I think it's really important and valuable for landholders and regional communities to really understand environmental markets, to feel confident to participate.

And beyond that, beyond participating and understanding, I think it's important for landholders and regional communities more broadly to be able to lead in this space, to be able to innovate in this space and to be entrepreneurial.

Now why? Why do I think this? Markets aren't inherently good or bad.

They are what we make them and what we allow them to become.

Markets can be really beneficial.

So they can create new opportunities, new jobs, they can support regional economic stability, resilience, prosperity.

And in the case of environmental markets, they can fund sustainable land management and farming goals.

But markets can also fail.

They can be monopolized and they can be harmful.

So because of this, I think local landholders and regional communities like Wagga Wagga, the wider Riverina region, will benefit from really engaging with and influencing how natural capital and environmental markets evolve.

So that the people controlling and influencing environmental markets are local landholders, local businesses and local communities.

So that the wealth and the benefits created by environmental markets are reinvested back into your region.

And so that ultimately, environmental markets are working to your advantage, to the advantage of your local community, and really importantly, to the advantage of the environment itself.

Now landholders and land managers are really well positioned to lead, to innovate and to come up with new market ideas.

Why is this? Why are you in this good position? Why do I think you are? So many of you already understand and engage in other markets.

You get markets.

You already understand and engage in business and entrepreneurial practices.

You're likely to own or manage natural capital already.

You're likely to already be delivering environmental services.

And you seek to gain financial, social and other benefits from these exchanges.

So you already hold a lot of the keys for what you need.

And finally, for those of you that want to, how can you start? Here's a few options for you.

So continue to build your knowledge, skills and networks, and today is a really great way to start.

Share your ideas and insights with your peers.

Apply new practices on farm.

Sign up for pilots.

Sign up for trials.

Explore your existing markets.

Provide input to policy and regulatory design.

And advocate to your peers, government and non-government organizations for what is needed.

And the last two, and more importantly, is to ideate new market opportunities.

What market opportunities do you need? And bring them to life.

And of course, you can speak to your local LLS advisor for support.

Thanks very much.

Thank you, Megan.

Thank you for such a professional presentation that was so well articulated and so well explained through your slides.

Thank you so much.

[ENDS] 

markets fluctuate up and down in value.

How is the value of a project determined and put in place long-term? The question is, given markets fluctuate up and down in value, how is the value of a project determined and put in place long-term?

It's a really good question.

For a stewardship agreement, the price that you get or you achieve for the biodiversity credits as a trade is kind of at that point in time.

It's really looking at the information, or current market information that you have available at that time, that would be informing that.

The costs of, or the supply costs of setting up a stewardship agreement are a key driver for the minimum price that you'd be looking at.

Because you need to achieve that price to have the money to go into the total fund deposit.

While they're based on the current prices that you pay for fencing or for controlling a particular weed at that time, there's a component of the total fund deposit that applies at discount rates.

I'm looking at my colleague, Miladin, who would be able to explain this a whole lot better than I could.

It basically configures the payments that you receive, say Year 15 or Year 20, through accounting for CPI and those inflationary pressures that you have on the materials that you need to manage land.

It's probably not a really well explained answer, but the total fund deposit is kind of designed for it to be the capital for that to be preserved.

There's some parts of the regulation that can also support that.

What it should say is that the total fund deposit does get invested, and so you're earning your total fund deposit that sits in the account with the Biodiversity Shoe Payment Fund.

It's collecting interest through those investments over time as well.

It's a combination of factors that help to preserve that amount.

Megan, you just have something to jump in with there on that point.

Sorry, I just meant after John was finished.

I was just going to say the key point is having an adequate total fund deposit at the start.

That's something that my team certainly look to ensure is in place.

Fantastic.

Go for it, Megan.

Yeah, thanks, John.

I guess just to say, when we're talking about value, market value, the question are rightly noted, is that of course it goes up and down with the market.

Market value is a really useful way to value natural capital and value that exchange that you're entering into.

Most of the regulated market schemes use market value at the moment, but market value is not the only way.

There's a whole range of ways to value and set the price for natural capital or the service that you're offering and that exchange that you're going into.

In private market opportunities, private natural capital opportunities, you could enter into a fixed agreement price.

It depends on who you're entering with and what that party wants to enter into.

Market value is really useful, pros and cons, but there are other valuing techniques.

If you're wanting to influence the way markets go and natural capital go, it's useful to understand those ways to value and set prices.

To feed that into regulated markets and say, "Hey, why can't we have a valuing technique like this?" The other thing is, if you're pursuing private market opportunities or private ways of getting a return on your natural capital, have a look into all of the different ways that you can set the value or the price that you're going to be getting a return on beyond just market.

In that way, you might be able to control fluctuation a little bit more and see from there.

Fantastic.

Are there any questions in the room before I go back to the questions on my iPad? Here's a question that relates back to there.

Where can you go for information on the market to compare the options? If you're starting out and you have one offer on the table, where can you go to get a comparison? Is that for your job? I'll have a crack at that.

It was actually a conversation that we were having with someone at Morning Tea.

I showed the market sales dashboard.

It's one source of information.

Probably a key part is there's a supply register or a credit transactions register.

It also provides additional information that's not shown on the market sales dashboard.

It has the volume of credits and a bit more about the time that was traded.

There is information that you can access.

Presenting that better would be really good.

Also, talking to other landholders who've been through the process as well.

It's often, as I think Megan alerted to in her presentation, it can be a one-to-one transaction.

In reality, there is a lot of one-to-one transactions in biodiversity credits with the supplier and the buyer.

Certainly looking around, talking to people and getting as much information as you can is probably the key thing.

I would just say there are a lot of options in the market.

It's definitely worth having a good chat and having a look around.

When you do have an option on the table, see what else is out there.

John and I and our teams are both available to have those conversations with you.

We will have unbiased conversations with you when we're not in this to make money.

That's a good thing to have a conversation with someone who's not in it to make money.

The LLS Natural Capital Advisors, can they also provide independent, non-biased...

I can see a lot of LLS people nodding at me in the room.

Fantastic.

Yes, they can.

I've got two questions for you.

What grazing management are you using to allow for natural regeneration? Grazing.

That's what we're doing there.

I suppose there's two things.

As I've said earlier, we've got to have a minimum number of stock to maintain a viable business now and into the future.

We are really concentrating on some rotational grazing.

That 4% area which has produced a lot of fodder for us, that's a huge value.

We're about a 50-50 split between cattle and sheep.

We find the combo and the way we graze those does two things.

It's really great for modifying the land for us and we rotate cattle behind sheep.

It really works well.

Currently our DSC is about 8,000, 8.6,000.

We're pretty much maintained.

One thing I will say, we'll always maintain probably about an 80% grazing capacity.

We must have security into the business.

We want to save plenty of land cover.

So, half sheep, half cattle and rotational grazing plus containment feeding as required.

Thank you.

One more question that came in.

What premium markets have you accessed? Principally, for the vaults, it's really the New Zealand Reno, our QRX program.

That adds real value.

In the livestock, as I've said, there's really growing demand for ground bacteria and micron on mule sheep.

That's quite interesting because whether we know it or not, mule's in Wulby Stoppin, the due course.

I know Catherine had a point on mule's in, I don't know if you want to let the room know about your observation on wool through the Nuffield Scholarship.

Yeah, just really, everybody's in it.

Sorry, I was speaking about the preparation.

When I was in Japan, it was really interesting.

Sorry, everybody.

When I was in Japan, it was really interesting because although they don't have cement ESG agendas themselves, when I went with a wool broker there, he said, "We deliberately buy wool out of, or preferentially buy wool out of New Zealand or South Africa because nationally they've banned mule's in." So, they don't have to worry about looking at Australia and figuring out who's mule's in, who's not.

So, it's wonderful that you've got a premium market and thank you so much for sharing because it feeds really well into the changing market demands.

Yes, absolutely.

And enter them, global partners, all the big names, all the big fashion labels, that's where they buy it from, that's where the premiums can come in.

And also, just one last thing there in terms of premium markets.

Late last year, stock, sheep and cattle markets crashed.

If you had those sort of accreditations with you and you had productive livestock or performance livestock, they were easy to place.

So, you're going to be at the front of the market, selling into a premium.

That's what part of our business strategy is.

That's what allows us to ultimately take about a two-property out of long-term grazing.

We think we're going to have a healthier landscape and the old trilogy, healthy land, healthy stock, healthy people.

That's really our game plan.

That's where we're hitting too.

And we think it's going to work well.

Thank you, Owen.

Any other questions from the room? We've got one down the front here.

Thanks, Owen, for your comments about the need to balance viability and long-term productivity and the business into the future with the need for conservation and the management of natural capital.

I think that's really relevant.

But a question more so for Cassie and John.

In that regard, is there assistance for landholders to help with understanding those risks and that balance as they might enter into some of these agreements? Because it could be quite complex, and certainly case by case, for individual businesses.

So that's my entire role, is assistance.

And to have very practical conversations with landholders who are looking to enter into agreements directly through the Biodiversity Conservation Trust or through the Biodiversity Stewardship Agreement channel.

And we can sit down and just talk about what looks like it would be the best fit for the property at the time and the current management or the management going forward.

And I think you, John, should probably answer the one about the financial support available to enter into stewardship agreements.

I'll just add, we've been playing around with what we've been calling a gross margin tool, which can kind of, the aim of it is to do a comparison on an area of land that what you would be getting for agricultural productivity versus what you could get for biodiversity credits.

It's pretty close to being developed.

I haven't seen the latest draft of it, but it would be a really valuable tool for doing some of those scenario planning because you need to see that it has that financial benefit and how that can change the farm configuration.

In terms of support for a stewardship agreement, I mentioned that stewardship support program and that does provide a financial support to, there's a lot of setup costs in establishing a BSA because it requires an ecologist to go out and do an assessment of the different types of plants and animals on the property and then work with a landholder to develop the management plan and then work with the landholder to develop the management plan.

So, I've set up a prepared assessment report which goes to government to review and work up an established agreement.

The Stewardship Support Program can be a way of providing some of that, cutting down on those upfront costs.

Cassie? Thanks.

I guess just on broader support, so, LLS's new Natural Capital Advisor teams, they're all trained or training in that whole range of environmental market approaches I talked through and thinking about how do you integrate those different types of market approaches individually, collectively into your land and farm.

So, in the very near future right now, they'll be able to help you and support you to think about which of those approaches could you adopt and in what way, how do you integrate that into your natural capital accounting and the opportunities for you.

We're at time for this panel session, so can I ask this rapid fire, three rapid fire questions that require a one word response.

What is the timeframe for the new ERF methodology that allows biodiversity projects to be able to run in conjunction with soil carbon projects? We'll take that on notice and publish the answer.

What happens if properties experiencing severe ongoing drought flooding bushfires? If the owner doesn't meet the conservation KPI targets, what happens? Adaptability.

So the funds don't get withheld? Agreed.

Adaptability.

And if a biodiversity credit is sold and can the landholders that generated the credit still claim them in a sustainability framework? If a biodiversity credit is sold, can the...

I'll do more than one word.

If a credit's sold, whoever made the sale, they get paid for that and the credit can be onsold for whoever buys that credit up to the point where it gets retired and then it's kind of taken out of the system.

There are some wonderful questions in here.

We're going to distribute them to you to allow you to write responses and distribute those responses back to the audience, which I think is a really wonderful way to continue the panel session online.

Thank you so much for being here.

Thank you for bringing your wisdom, your expertise.

I am sure you'll be swamped with people in the lunch break, so I do hope that you have time to stay for lunch.

Thank you so much, ladies and gentlemen.

Put your hands together for our panel session.

[ENDS]

[APPLAUSE]

Good morning, and thank you to LLS and AgriPart for making this forum a chance to speak today.

I believe we've got 10 minutes to talk about our experiences with conservation agreements at Woodpark.

[INAUDIBLE] There's the property out here.

Woodpark is a typical river in a plains country, 25 kilometres north of Duralery out on the plains.

If there's such a thing, average rainfall is 360 mls.

And one feature of the property is 7 kilometre frontage of the Yanco Creek, the property area of 7,150 hectares.

And as you will see, 96% of that remains in its natural state.

A very important area, 4%, in on the creek we use for grazing and fodder crops and irrigation.

That plays a really important role to the overall strategy for management.

It's a classic-- Woodpark is typical of the properties in that area.

It's a very long history of marino sheep grazing, livestock grazing across those plains for the last 150 years.

And Woodpark has been producing merino rams since 1912.

There's just a couple of shots.

Livestock is all we do.

The property and business depends entirely on grazing livestock.

And on the right there, you'll see a new project we're undertaking.

It's part of our future proofing, risk management.

That's sowing.

That's last year's sowing and amicus alpis, which I think has got a big future for buffer dry times.

There's a map of our conservation zones.

The agreement began 30th of August 2018.

And it's in perpetuity, which means it's obviously the agreement's registered on title.

The area of our conservation area with BCT is 1,646 hectares, which represents about 23% of the property.

When we chose those areas, we really wanted to protect three distinct zones, the riparian areas along the Yanco Creek, up on the top side there, some beautiful inland flood plain full of goosewood and lignum.

saltbush and out to the west, some classic myel wood land.

So we thought they represented what the district is in its landforms.

Conservation zones are divided into 10 distinct zones for our management.

And currently, we're looking at, as you know, as had been mentioned earlier this morning, the biodiversity conservation has a number of approaches to it.

And this is something we're looking at on the north end of the park.

It's a proposed area with another offset under the train grid.

That would add another 750-odd hectares into our conservation efforts.

That's a classic myel wood land.

There's some really good management actions proposed there.

We're pretty confident that we'll get up.

And something we're looking forward to.

And very happily, it abuts another very large area we're currently conserving.

So it would make a really good effort to get up.

The good thing about that potential is that BCT also managed it, as John mentioned a little earlier.

We're going to show you a few shots.

Here's a classic one on the Yanco Creek.

It's one of the major features on the property.

And it's a classic example of a really good umbrella grass.

I think that there shows what's happened over the last two or three years.

It's a very popular and somewhat un-established model, I think that there shows what's happened over the last two or three years.

It's time has been really good because we've had really good rainfall, good soil moisture, and the region's really going very well.

But you won't see there's a lot of lovely chenopods that are coming through too, which is a great thing.

There's a scene of what we're doing.

We're doing some direct seeding and seedlings.

You'll note those red gums in behind.

That area there was incredibly damaged, massively damaged nearly 30 years ago with a bushfire, and that's one of the reasons why we're so delighted.

Those young eucalypts you see there actually came from those trees.

It's never happened before.

The area behind us heavily flooded.

That's why we got that generation.

There's a lovely shot of just classic ground dwellers, lovely little fox clubs.

There's lots of good things happening.

We're really pleased with how we've seen the regeneration process.

Classic example of our river in a woodland, lots of nice species, and it's really going very well.

As I've said, rainfall has been good.

We've really been very fortunate to see what we've seen over the last three years.

One of the things we've really noticed, where there's been stock exclusion, some of those management zones allow limited stock occlusion, or zero stock.

Other areas have limited grazing, very sensible arrangements after seed set, limited days, but what we've seen a great result on the ground is what's really been happening.

Because the season's been kind the last two or three years, we're really adding to the current regeneration process by doing a lot of direct seeding, some 55 kilometres last year, and we would be putting in 3,000 to 4,000 seedlings, particularly the full-out conchilistra species, the other ones that are missing out of the sandy, learned areas.

One of the problems we have in that is kangaroo problems.

There is a big kangaroo population.

We have to do a lot of protection of seedlings.

I'm reluctant to do exclusion fencing, something we may have to look at, not happy about it, but at the moment we're doing a lot of protection of trees to get the results.

Happily long-term rabbit program, we've really got them under control.

The conservation agreement requires any reporting, it's one report a year.

It's a really good process.

It's a simple logical process.

So, if we have monitoring sites, that's actually creating a good record for us and indeed for others going forward.

Then you report on the actions we take, the usual things, the pest, weed control, feral animals, et cetera.

In those zones where we do some limited grazing, we need to complete a grazing management diary, once again, straightforward, simple, and then we can complete so that the annual funding payments come forward.

One of the great things about our conservation agreement is you can really add value to your business.

Because of the accreditations, it gives us access to really good wool marketing through the NZM and the RQRX programs.

They add really significant benefits.

We saw talking 10 to 15%.

And the same for cattle.

I think just last week we picked up about a 14-15% advantage by never having to end a program because of the accreditation status that we do have.

And in the same way, there's really good markets for non-mules, they do microns, sheep, each cell.

As we look to the future, unfortunately, we're not going to be here forever.

I wish I was a river of red gum.

It could be in country for at least 200 years, but that's not going to happen.

So we actively now are seeking, but how can we make sure our efforts have a long-term future? We have some nice nephews, which will be helpful, but part of our responsibility is to make sure we can keep this program going.

And it really is a fact that you can add to business viability by those premiums.

And once again, as part of a risk management strategy, we bushfire.

We think one of the biggest risks of this program is conservation agreements and their success in the future.

So we do a lot of preparation for fire prevention.

Overall property management, containment, feeding and dry times.

I think we've all learned a lot about that over the last five years.

That's a real winner when we do it properly.

And the anime itself, which is an investment we're putting in, because at the end of the day, yep, we want the good conservation goals.

We want the good outcomes, but we've got to maintain a good viable business.

This probably does depend on livestock.

We've got to market in the premiums.

And we have to have a, there is a minimum number of livestock to get good selection, offering good sales to people.

And I think we understand, Helen and I both understand, we need to be patient and committed.

It's a slow process.

That area has been grazed for over 150 years.

We're trying to reverse that process.

And we've seen some good results as those photos may have evidence for you.

But it's an ongoing process.

I wish you could go faster, but we're putting all the efforts in we can.

And we hope our program will be in place for decades to come.

That's what we're really looking forward to doing.

So thank you very much for the, for you.

Thank you so much to Helen and to Owen for bringing your experience and your wisdom to the stage and your real life example.

[ENDS]    

…At the local land services and he'll be speaking from his experience as a landholder to the C&B pilot and the ACCU registration.

Thank you, Geoff, nice to see you again.

Yeah, thanks Gillian.

And yeah, good afternoon.

Thanks Kate and the committee for inviting me to have a chat this afternoon.

I will say a bit like Cassie, I'm much more comfortable out in the paddock having you chat and talking out there that I am standing up here with those bright lights in my eyes.

I can't hardly see anyone out there but hopefully you'll get a bit of information about what I'm talking about.

So today I've really got my landholder hat on so just ignore the badge just for the next 10 or 15 minutes.

As Gillian said I also work for the local land services and a part-time farmer.

So just a quick snapshot of our property.

We're obviously in Wagga down the bottom there.

I actually live in Tamora and our property is about 85 kilometres north of here, just south of Ardlethon, south of Newell Highway.

So yeah, just outside the Golden Triangle really.

So that's, if I could actually see that screen up there a bit, oh it's in front of me.

So that's our property boundary.

The original farming lot that my grandfather took up was sort of the northern side of the block over here.

He purchased that in 1926.

When my parents took over the property in the 60s they bought another two properties, adjoining farms.

And then we actually purchased more land back in mid 80s right before interest rates skyrocketed and the wall floor price caused a fair bit of grief across the industry.

So we've been in that industry for a very long time and incidentally you can follow the Minchin family in agriculture back to the 1400s in the UK if you really want to go into the history, which is actually quite interesting.

So as a third generation farmer I have a really deep affinity with this land and a deep connection with it.

It's where I grew up and it's really what I'd describe as my country.

So we were part of the carbon biodiversity pilot, which is a federally funded program and it was assisted in the delivery by NRM bodies like the LLS across regions.

So the carbon biodiversity pilot trialled how a market arrangement for landholders could create new income streams through tree planting and deliver biodiversity improvements and carbon abatement.

All the CMB participants, like it was just mentioned, had to register with the ACU scheme, which was formerly the Emissions Reduction Fund and now to take a new mixed species environmental planning project using the methodology called the reforestation by environmental and mallee plantings using the full cam model method.

Incidentally, it'll be nearly 15 years ago now I was actually involved in some of the original work that was done by the CSIRO in developing the full cam model, which was quite an interesting place to be at that time and it's interesting that we're now using it, which is good for the investment they put in.

So with the full cam model, once you design your project in this pilot, you could actually get an output and it would give you an output of what your carbon profile would be for your project and then you could generate from that an estimated income stream over the next sort of 25 years or the life of the project.

So and throughout the life of the project, participants will report on the progress to the Clean Energy Regulator and be issued with ACUs as you do your reporting.

They run the modelling and then they will pay you for the credits that you have generated based on that modelling process.

So the learnings from this project have been brought into the Nature Repair Fund policy and from what I understand that's to kick off sometime in July but I could be corrected on that.

So yeah, that's the background of it.

It's the process that I went through, that we went through for this program.

We had to design our project online after we'd put in our expressions of interest.

A really key part of that is actually having a farm plan and understanding where these sort of projects can go on farm.

In our case, it was identifying low productivity land that we could utilise to put under the scheme and knowing where best to put these types of projects and not on your high productivity land and knowing what's the best use for your land.

Is it agricultural production, carbon, biodiversity stewardship or are there other ways you could be utilising that land? Really strongly advise getting some advice from LLS, NRM bodies or other trusted advisors who have some knowledge around national capital and particularly our newly set up LLS team with some great experience and some really sound knowledge in there to support people through the process.

And as I mentioned there before, the model outputs were provided in the design process and then we, which would give you an estimate of your income.

We had to, in the development, had to cost out the implementation, so what activities we had to do on farm.

And so in terms of preparation, ripping, weed, pest control, fencing, labour, legals, freight, planting, direct seeding, all those costs we costed out.

Being I've had nearly 19 years experience in this NRM ag advisory space, I sort of had a fairly good handle on those types of costs.

But if a land holder themselves is not really confident about those costs, I really encourage you to actually talk to a contractor, ask what a contractor would quote you to do that job or break it down into small pieces and ask numerous contractors and then use that cost.

We had to register with the client as a client or a participant with a clean energy regulator.

To do that you have to be a fit and proper person or a fit and proper person managing a registered entity.

Basically that means you have no criminal record in regards to fraud or laundering money or lots of other different things.

There's about a three page form you need to fill out for that.

Once you're registered as a participant, then you can actually go in and register your project via the clean energy regulator portal.

This is basically our farm, our project.

We have a couple of creek lines.

Project area one and two actually on creek lines.

Area three is on a waterway and then the back area, area five is some remnant vegetation or native country out the back that was partially cleared.

Area four we actually removed from the project during submission.

One minute.

You're a hard task master.

This is pretty much what the portal looks like.

It's almost like a project management platform where you go in and it will tell you all the transactions you've created through developing your project.

It has all the forms and bits and pieces you need to interact with the clean energy regulator.

It's quite a really good setup in that way because Gillian's hurrying me along.

I better just hurry up a bit.

One of the big hurdles that we had was the eligible interest holder consent form.

So if you have somebody who has a mortgage over your property, they will need to sign off and approve of the project.

In our case, the bank that we were using at the time, they weren't fully equipped to be able to assess the risk.

They asked for a new revaluation of property with the project in place and that was a cost of about three and a half thousand.

The quotes were between three and five.

They also had a cost of external legal advice which was between five and ten thousand.

That was potentially passed on to us as a client.

So that's something to keep in mind and ask early with your bank if they can assess these projects.

This can also take quite a period of time to get through.

I'm just going to jump down to my take-homes and I'll be really quick.

Natural Capital creates opportunities to diversify income away from ag and weather dependent income.

That resilience word which is really dreaded in some cases now but can build some resilience in your farm business.

Be patient and persistent.

These projects can take some time to complete and get them on the ground.

Seek some advice from LLS, NRM bodies or other trusted advisors.

There will be lots of paperwork to complete and submit but I will say the Clean Energy Regulator staff and the staff that we dealt with in the Federal Department were really helpful and helped us through that process.

Again, engage a trusted service provider with experience to help you through the process if you're not so confident.

So that's me.

Thank you.

[ENDS]   

Okay, New South Wales Government has made a commitment to be carbon neutral across the state by 2050.

The first stage of that plan is to reach 50% reduction in greenhouse gas emissions by 2030 and there's a whole range of initiatives across the different sectors including agriculture and land use.

So Lisa just mentioned the Primary Industries Productivity and Abatement Program, that's the program that I work with and this is a key part of the Net Zero plan, stage one.

So New South Wales Government is investing $105 million to support carbon activities in the agricultural and land management sector.

One of the key actions is capacity building, we've just heard about the On Farm Carbon Advice Program that we're sponsoring but we're also doing things like sponsoring the Carbon Officer that's just been employed by Riverina Local Land Services.

Another key action is supporting priority projects that will demonstrate carbon management and today I'm going to be talking about the Living Carbon Grants that we've just launched and these are designed to help landholders to do tree planting projects to create carbon credits but also have some biodiversity improvements and enter into that biodiversity market.

So the main five outcomes that we're looking to achieve through these grants, one we want more trees on the ground to absorb greenhouse gases but also to increase biodiversity outcomes and other benefits and we're especially looking at threatened species and threatened ecological communities.

Two, we want those tree plantings registered as carbon projects and to create carbon credits for the landholders and we want to show that those carbon credits can be worth more if they've got biodiversity benefits added onto them.

So if you sell your carbon credits then hopefully you can get a higher price as a premium carbon credit or if you decide to keep the carbon credits for offsetting your own emissions then you'll be able to promote those environmental benefits that we've been talking about today.

Three, we want to improve the knowledge of our on ground partners such as local land services around the carbon and biodiversity markets and through them to help educate land managers.

Four, we want to help landholders to start carbon projects that need a lot of upfront investment such as tree planting projects.

And five, we want to create demonstration sites.

We want you to share your stories about the process you went through so that you can help others on their journey.

So who can apply for these grants? So these are opening up in pilot regions in the Riverina, the Mid Coast and the North Coast.

These are areas that we've developed partnerships with on ground support partners.

So to apply for the grant you'll need to have already registered your carbon project with the Federal Carbon Credit Scheme, the Australian Carbon Credit Unit Scheme and you need to be ready to start the project.

You have to own the land or be an Aboriginal organisation that has legal rights to the land.

We will consider some public land especially if it's going to have potential to set up a permanent demonstration site but public land managers should talk to us first.

So, what will we fund? So there's a total of $5 million across the three regions including normally $2 million for the Riverina region.

We're looking at around $50 to $200,000 as the price range for each project that the grant funding will support.

There's a fixed $5,000 amount for administration to help with the carbon project and the environmental account set up.

We will pay up to the full cost of direct seeding, ripping and planting tube stock and tree guards and up to 50% of the fencing for standard stock fence and there's some few rules around that.

There are some things that we won't fund and we expect co-contribution from the land managers and they're generally some of the things that are a bit harder to predict from the start.

Things like weed control, ongoing maintenance, we won't fund the purchase of any equipment or land legal fees.

For a full list of these please refer to the grant guidelines that are available on our Living Carbon Grants website.

So the grant process, first of all talk to your support officer.

If you're from the Riverina area here, talk to Kate Jenkins.

We've already heard about her from organising the conference today or coordinating that.

But yes, she's now the new project officer for carbon in this region.

Those officers will help you design your project and there's a regional guide on the website as far as the recommended planting species and things like that for the Riverina and the other two regions.

You'll need to choose the environmental accounting method that you want to use.

So we're working with Accounting for Nature for this.

They'll be able to provide you with help on that as well as the person on the ground.

As I said before you'll have to register with the Clean Energy Regulator and they have a helpline that you can talk directly with them as well.

Once you have that information you can fill in the online application form and submit your application.

We'll then assess it and assume you're successful then we'll provide you with a funding deed.

We'll get that signed off and then there's basically a list of things that you have to do which I've summarised on the slide there.

But as I said before look at the guidelines for a full list.

Basically we expect the projects to be finished within about 18 months.

So have a look at our website.

There's a lot of things just to Google Living Carbon Grants.

Otherwise see me, I'll have a trade stall over in the main room over there or talk to Kate Jenkins if you're in the Riverina region.

And yeah, that's basically it.

[ENDS]   

In relation to the methane emissions that you're quantifying from livestock, how do you account for the difference between feedlot livestock and grass feed livestock in relation to emissions and the accountability of that?  In all truth, I haven't done a feedlot farm plan yet, but there is a separate calculator for that.

So are you familiar with the different calculators to do your emission numbers, the GAFF tool, so the greenhouse gas emission accounting?  So I can send out some links with LLS today if you want so you can have a look at them.

Basically with the feedlots for the methane, it will be a lot about the feed additives that are coming in.

So it will be the freight of that feed that's coming in.

I guess also the quantity of that feed will impact, but also the weight gains.

So all that's taken into account.

Whereas a grass fed, there's a lot less imports.

You don't have so much in your grassland environment, your rangelands, fertilizer use or anything like that.

It's more based on that productivity of that animal.

So in your beef herd, it would be your genetics and that type of thing.

So a quick growth animal will have better emissions.

So it comes down to those sort of factors.

Not sure if I answered that.

Sorry, no.

I believe that the emissions that are created from feedlot, sheep and cattle are very different to grass fed.

Oh, absolutely.

Definitely different products.

So how's that accounted for in your, because you're talking about supply and...

So we do it on an individual farm basis for our farm plans, if that makes sense.

Like as an industry-wide thing, it's accounted for.

But through our program, our project, we're really about educating farmers about what's happening on their farm.

So we haven't actually undertaken a feedlot.

So can't really comment there, but it would be the same as like any other intensive so say dairy systems that we have been doing those profiles.

It's really about the feed that goes into those animal and the efficiency of that feed then reflects back to their emission numbers.

And I guess with the dairy, it comes down to the milk that comes off farm.

Feedlot will be the meat that comes off farm.

And that's where your emissions intensity is really important.

Sometimes you'll find, even if it was more of a rangeland sort of entity farm, if they do do a containment feed or finish off stock with feed, sometimes the emission numbers do come up, but usually you're getting that animal off quicker too, so that helps.

So it's a bit of a balancing act.

And I guess some of the feedback that we're getting from people, like if you're a better producer and you have really good pastures, it means you have more animal numbers.

So it does mean that you have more emissions on farm.

I think we've just got to be wary that we're focusing on production and profitability too, but we want to make sure that we're doing the right things.

Don't think that an emission number's bad that you're getting at the moment.

It's just starting to collect those numbers over multiple years so that at least you know your baseline.

Lisa, one of my observations about DPI is that it's a very large organisation with a lot of experts.

Could I ask that you connect over lunch, swap details and that you get her in touch with a feedlot expert as well? Yeah, happy to.

DPI has a lot.

There's key calculators for feedlots and there's key calculators for just sheep and beef.

No, and I think it's such a beautiful...

No, I don't need that.

I was just hoping to ascertain that your calculator is calculating the difference between grass-fed meat and livestock meat.

Okay.

I know.

So because...

End of the day, it does.

There's just different calculators for those two entities, if that helps.

Yep.

Okay.

Fantastic.

And we had a question behind.

Yeah, thanks, Jimmy.

My question is to Lisa.

Lisa, you mentioned that consumers are looking for carbon neutral products.

I'm just wondering whether you've actually got a percentage number there of Australian consumers that are currently looking for those products, just to see how quickly this is coming at it.

No numbers there.

I guess it's more appetite of what's happening in the industry and what we're hearing from that supply chain from the farmers.

It's up to the farmer whether they want to go down that path and value add and brand their commodity off farm.

So whether it's meat, sheep, like beef, sheep as well.

But I don't have any numbers.

Sorry.

Two questions from the floor.

Go for it.

Thank you.

I'm wearing two hats today.

One is chair of Landcare New South Wales and the other as the secretary of the Global Equal Labelling Network.

On that capacity, I'm sitting on the textile review group of the EU equal label.

And that covers obviously commodities like cotton wool.

Those are due.

The current scheme is due to lapse at the end of twenty five carbon is one of probably 40 criteria which we would need to meet to maintain market access.

So we need to get a giddy up on a lot of base line data.

But I'd like to talk to you at lunch just about how Australia can maintain access to that market.

China is also signaling potential adoption of those EU standards.

So where are we going to sell our goods? Happy to connect you with someone in DPI that's reviewing that for cotton too.

Another question from the floor.

OK, one question that's a speed round of fast questions from the 16 that are loaded here is New South Wales part of the discussions around the development of the IFLM carbon method.

Could it advantage New South Wales properties? Take it on notice.

No, voluntary carbon markets effective at addressing climate change.

Sorry, I didn't hear that question, but the one before New South Wales in consulting on that.

And my understanding is it's delayed at the moment.

OK, OK.

Is the DPI on farm carbon assessment free of charge? Yes, it is.

Fantastic.

Out of the 16 carbon markets across the world, how effective is Australia's carbon market in addressing climate change? How long is a piece of string? I think there's a lot of drivers there.

And I think what's really going to drive supply and demand, if you look at the Accu scheme, all these big emitters are going to have to like, there's a safeguard mechanism and they've actually got to offset.

And that's really going to drive up the market.

And if there's not many Accu's in the market, well, prices will go up.

And a final question for Jeff, because our session after lunch does involve finance and the banks.

How did the bank hurdles resolve? How is that resolved? How is it resolved? The bank hurdles? My answer to that was actually we had the CEO of the bank and the national risk manager come visit the farm only two or three weeks ago so that they wanted to know what it looked like on the ground and how they could best work out a policy on how they manage that interest hold or consent form and understand it better.

And they want to do more as a bank to facilitate farmers taking on that, those projects.

So that was how we resolved part of it.

But a lot of discussion and explaining what it meant on the ground and what it meant for our business pretty much.

Fantastic.

Yeah, thanks.

I guess just in terms of the effectiveness question, you know, we're still working out what's effective and what isn't and comparing it is really challenging with, you know, different international markets.

But I guess the most important thing you can do to drive effectiveness is what you're doing is coming along here today and learning about it and then feeding that back into government departments or feeding it back into what you're doing.

Because really, ultimately, anything that we start, you know, as humans, generally the first time we do it, it's not as effective as the 10th or the 20th.

And it's not as effective if there's one person participating compared to if there's thousands.

And I guess the reason that I'm so passionate about, you know, landholders participating, landholder innovation, you know, really leading the space is because one of you participating will have one idea about what could be more effective.

But thousands of you participating will have thousands of ideas about how this will be better and how we'll make the best markets and the best natural capital, you know, sector for ourselves.

So the more of you participating, the more ideas, the more innovation, the more effective it's going to be.

So when we ask about effective, we're the ones that are going to make it more effective.

So, you know, get involved and learn more.

Thank you, Megan.

Incredible message for everyone as we head to lunch.

We're going to head for lunch now.

It's 1240 and we will return here and commence at 120.

We do have a 40 minute finance panel when we get back.

And that panel involves two people actually joining us online.

So we won't start late.

We will just start and we will round everyone up from the lunch venue at 115.

Thank you for your participation.

Thank you for your panel.

And we look forward to seeing you after lunch.

Well done to the panel.

Thank you.

English (United Kingdom)   

… Thank you to Ray, who made an announcement this morning.

It's my great honor and privilege to now be the chair of Riverina, LLS.

It's a role which I'm very excited to be pursuing.

Today, though, I'm speaking to you because I'm a primary producer.

I'm a farmer.

I don't actually live very far from here, just out the road here.

At home, at the moment, we're right in the middle of sowing season.

Things are going to be going to barley.

Canola's in the ground and up, and wheat's next.

So my very glamorous job on the weekend is to head down the paddock and underneath the paddock trees, try and find all the baling twine, which is in the way of the cedar, and get it out of the way.

So for a minute, I want you to picture baling twine down the paddock, which has been used and which I had to move, like this.

That is what natural capital and carbon accounting looks like to farmers just like me.

It's confusing.

It's complex.

It's a lot of conflicting advice, and it can be very, very overwhelming.

What I'm hoping to do today is try and find an end in this baling twine and pull it out a little bit and talk to you about how farmers like me might get started on this natural capital journey.

So I'm going to talk about three things.

I'm going to talk about why farmers like me should care, who are the farmers that look like me, and what are the top four things that I think farmers like me should do right now.

So if I start with the why, we've actually had a lot of speakers today talk to us about why farmers should care about this space.

For me, I always think about that expression, it's the carrot and the stick.

So some of what we're talking about today is an incentive or an advantage in doing something in this space.

So for the mixed farmers like me in the room, you who grow canola, you probably signed an acronym, International Sustainability and Carbon Certification document, which last harvest gave us a premium of $15 a tonne for our canola.

I think the harvest before we got $10 extra per tonne for our canola, which is not an insignificant amount.

Farmers are quite accustomed to this idea of signing up to some criteria for the benefit of, in this case, an extra $15 a tonne.

The other bucket I see is the stick, which is that if we don't get on board with this, there are going to be consequences.

And the consequences might be a lack of access to certain markets unless you can demonstrate what you've actually done in this space.

Thinking about this before today, I was thinking about where the banks sit in all of this, and I'm really heartened by everything that I heard Alana say a little bit about, because up until now, I wasn't quite sure about whether banks were really in the carrot business or whether they were in the stick business.

I'd actually like Alana to give me a discount of at least 2% on my borrowings.

That would be really great.

But I actually think it's going to be business as usual for banks and that our annual reviews, as well as having to show them our budget and our financials, we're actually going to have to have a conversation about what we're doing on farm from a sustainability perspective.

And I think it might become business as usual.

The advice that I'm going to give today, the who are we targeting? The advice that I'm going to give today is for farmers who are like me, who are just in the midst of dipping their toe into the water.

Now, I acknowledge that in this room, of course all the other farmers in this room are the early adopters, the ones who are way out in front, and for whom this is all known.

For you and for everybody else in the room who's part of industry or government or what I like to call ag adjacent, my challenge to you today is to think about the farmers like me that we need to shift into action because it's shifting that moveable middle that's actually going to create impact on the ground.

So the suggestions that I make to you today may be they're for your customers, for your clients, or for the people that you work with.

So here we go.

My top four tips for what farmers like me should do right now.

The first thing I think farmers need to do is to learn the lingo.

If you speak to any farmers, the first comment is how much rain did you get? Do you think we're going to get any on Saturday? What's the season looking like? You might, farmers also have a language all of their own that people outside the industry don't necessarily understand, like how many sheep did they draw for tomorrow in Wagga? And it's the same with this space, natural capital, is the lingo doesn't necessarily come naturally to people who don't, who haven't been exposed to that kind of language.

So my top tip for those producers is to look for some of the things that will teach you some of the language.

So lucky enough, I got to do an LLS, TOECal, online learning module.

It was a really good introductory learn the lingo.

For any of you who know a lot more about it, it's actually really good to go into the deep dive of all of the YouTube clips and further reading that's part of that module, and I recommend it.

All of industries have some kind of learning modules available, and I'm most familiar with red meat, so sheep and beef, and I know a lot about what MLA is doing in this space, and I can recommend to you their carbon 101 and carbon in action e-learning modules, which are on the My MLA website, as a really good place to get your head around the language and be toe in the water of what this is all about.

The second thing that I think farmers should do is have a go at a carbon account even if it's not perfect, and it won't be perfect because it is a little bit daunting when you first look at that SB GAF tool that Richard Eckhart at the University of Melbourne put together, but you got to have a go because you need to get your head around the kinds of information that you need to have at your fingertips, the things that are relevant, and perhaps the things that are irrelevant.

What I learnt from doing the MLA quick start carbon calculator was that there was a lot of things missing from that calculator, and there's some of those calculators which are still very much in a development phase.

I personally am looking for the, another acronym, Agricultural Innovation Australia's Mixed Farming Tool, which was announced at Evoke Ag in Perth in February, as a potential solution to the complexity of mixed farming and the joining more than one enterprise together.

So for me that would be red meat and grains.

Number three thing that I think farmers like me should do is critically assess their landscape, to have a look in their own backyard at what they've actually got.

Now I put my hand up to be a part of the Riverina LLS, Natural Capital Profile Project, that's a bit of a mouthful.

Today I was handed this beautiful document with this lovely tree of mine on the front.

Thanks to the team they've given me a bit of an assessment of my farm's natural capital, and it's given me some sign posts to the things that I might look at, both on the ground and in terms of environmental markets in the future, and it's something that I think we should all do, which is have a critical look at what's in our backyards.

As a producer we tend to look at the productive areas of the farm, and this is an opportunity to look at the areas which we might have once considered to be the unproductive areas.

The fourth thing that I want to do, I think farmers like me should do, is decide where they're going to store this data.

It was really great that Katie told me that it's going to align with my farm accounting software, that's absolutely fabulous, because people are going to start asking me for my data and it would be really good if I had it in a really handy place.

All of these sustainability frameworks rely on the metrics and the data being recorded, and I can guarantee you that it will be farmers like me that need to supply those metrics.

That's it from me, I just hope that I've given you an idea about why we should care and what we should care about, and if there's any smart person in the room who can work out what I should be doing with my bailing twine, my net wrap, and my silage wrap to be more farm waste efficient, that would be really great.

Thank you.

Thanks so much, Lisa, it's always good to have a land holder's perspective, and with the silage wrap have a chat to local councils in this region, the Canberra Region Joint Organisation have a circular economy strategy to look at what to do with that wrap.

[ENDS] 

…Capital value in the Australian cotton industry.

All you need to do is understand your ESGs, map your actions against your UNSDGs, under stand your SBTs, throw in an LCA, adopt my BNP, gain your BCCs, and if you need any help, talk to the LLS.

So what more could you want? I just want to give you a quick overview of the Australian cotton industry for those who may not be overly familiar with it.

Our core areas these days spread from the border near Victoria in the Murray Valley really starts to pick up in the Murrumbidgee Valley, back into the more traditional areas, Macquarie and the Namio in the Gwydir Valley, crossing to Queensland, in around that Darling Downs and out to St George, and then up to the Central Highlands.

And in more recent times we've seen either an emergence or if you like a re-emergence of cotton in the northern part of Australia, some in North Queensland, in the Northern Territory and over in the Ord River area of Western Australia.

Two new cotton gins, one almost guaranteed to start pressing its first bale next week in Catherine in the Northern Territory, and there's one under construction in the Ord River.

Lots of myths about the Australian cotton industry, there's this perception that it's all controlled by big corporates.

90% of our farmers are family farmers, they produce about 80% of the cotton.

We're a relatively young industry, the modern Australian industry is now about 65 years old, no not even that, 62, 63 years old, sort of started in 1960.

Virtually all cotton growers will grow a range of crops and also may have grazing.

And we employ on average around about five to seven people in each farming business.

One of the key things about our business is the variability of our production, and it's all about what water is available.

And you can see here this graph, you see the millennium drought there in 2007, 2008, and then it even got worse in 2019, 2020.

And then it really bounced back, so just to give you a sense of that variability, so in 2019-2020 we produced less than 600,000 bales.

The next season we produced 2.2 million, and then the following season we produced about 5.5 million, which was a record.

Now this is where I suppose this part of the story comes into it.

At the moment, every bale of cotton, whether we have a big year or a small year, is sold.

It's sold normally at a premium to the world market prices, recognition of the quality of our cotton, our closeness to the spinning mills primarily in Asia, just a general premium.

So that's happening.

And so why do we need to do anything more? Well we need to do something more because the world's changing, and we've heard a lot about that today.

Yesterday we had the privilege of bringing together around about 200 people from all parts of the cotton supply chain into Sydney.

And today, 60 of them, including 30 from overseas, are wandering around the Namoi Valley and around Narrabri-Wee Waa, and taking a first-hand look at the Australian cotton industry.

Now virtually all of those 60 people there represent brands, retailers, or people who are manufacturing yarn or cotton fabric.

And for many of them, even though their day-to-day life is all about that fabric and that fashion and that demand, for many of them they've never been into a cotton field before.

So they actually have no idea on how it's produced.

And yet they're subject to a whole lot of rules and changes that are coming upon us, and we've heard a lot about those today.

And our growers are having to deal with all that as well and improve their sustainability.

So we know things have to change.

People have talked about today about the regulations that are occurring in Europe.

We've got the New York Fashion Act with similar sort of regulations there.

We've got voluntary organisations ramping up that pressure to demonstrate sustainability.

And brandon retailers are committed to demonstrating their sustainability, except in many cases they have absolutely no idea what that actually means because they don't even know how the crop's produced.

But when we had these people in the room yesterday, not only did they learn a lot about the Australian cotton industry, but we learned a lot.

We started learning more and more about what they need.

And so both sides, it's really, you've got to know your customer.

And if we had this conversation, or if I asked a cotton grower five, ten years ago, even many today, I said, "Who's your customer?" They might say the cotton merchant that they sell their cotton to, or they may go one step further down the line and say, "Oh, it's a spinning mill in Asia somewhere that buys it." But now we have to think about what the Levi's and the Nike's and the H&M's and the IKEA's and all the Lulu lemons and the Country Road and all these brands, we need to understand what they need and what they want.

Now we've got a little bit of a head start in sustainability.

We probably started our sustainability journey before such words of sustainability and social licence came about.

And that's because we were an industry that was hell bent on almost becoming extinct by our own actions.

Those of you that remember the cotton industry of the 1980s, 1990s, you're putting on 20 pretty toxic sprays to control insects, a lot of pressure.

There was talk of cancer clusters.

There were all sorts of things out there.

There were fish kills, a lot.

So we had to change.

And so in 1991 we commissioned what we believe was the world first environmental assessment of an agricultural industry.

And among the consultants was, those of you who may know, David Bellamy from fairly well known, I suppose, conservationist consultant.

And they took a hard look at our industry and came up with 70 recommendations.

And while it wasn't specifically called this in the recommendations, it led to the establishment of our best management practice programme in 1997, when we really started to drive practice change among our growers.

We were also very, very fortunate at that time that we became available the use of genetically modified cotton crops that were able to help us control our main pest, the heliothus bug.

Now once we were able to control heliothus, we'll then be able to take a much better and softer approach to do all other insects.

So we've really embraced integrated pest management.

That's been part of the journey.

We've been really focused since those times as well on our water use efficiency.

And so we've been measuring that for some time.

So our best management practice programme is a paper-based folder about this thick start in 1997.

2010 we went digital.

In 2014 we said, well, we're collecting all this data.

We need to be able to track what we're doing, but also tell our story.

So we launched our first Cotton Sustainability Report.

We now do those fully every five years with an annual update.

And we've just started what we've called our Australian Cotton Industry Roadmap, which I want to sort of concentrate on a little bit more.

These are some of the key metrics that we've achieved since we really seriously started measuring in 1992.

So today we use 52% less water to produce the same bale of cotton.

We'll put it another way where we used X amount of water to grow one bale of cotton in 1992 and 1997.

We're now producing two with that same amount of water.

Because we've actually improved the way that we grow, we now using for each unit, or bale of cotton produced, now takes 34% less land.

And this is the big one, and this is the real change to our industry is that we now use 97% less pesticides than what we were using back in 1992.

And it's been a game-changer for us and it's kept us in the business.

Core to this is our MyBMP program.

It's got those 10 modules.

They line up reasonably well with Katie's 17 principles.

Focus areas.

If you had every standard that's in those modules applied to you, you would have to be able to demonstrate compliance with over 400.

But because different people's farming systems vary, most of our farmers have to demonstrate compliance with something over 300 of those standards.

When they believe that they've met those practices, they are independently audited.

In Australia, if we are accredited with MyBMP, so we've gone through that independent audit process, we are recognised by an international organisation, a sustainability organisation called Better Cotton.

So Better Cotton was formed in, I think they might have been created around about 2010, we joined them in 2014.

They were made or formed from a whole group of grower organisation, NGOs, WWF played a key role in it, and a number of the brands, Solid Aired A, other organisations.

So it was very cross-sectorial, people that probably wouldn't normally talk to each other come together to set up this Better Cotton, which is a sustainability standard.

It applies in many countries around the world.

We quite honestly believe our MyBMP standards, just because of its extent and integrity, far exceeds what's applied in some of the other countries, but we've signed up to it.

It's an opportunity, one of those rare opportunities, where people are actually seeing a little bit of a modest premium.

So if you grow a bale of MyBMP accredited cotton, you'll get a BC Better Cotton credit, and you can sell those off separately.

Most of the time they sell for $2 to $5.

Bear in mind a bale of cotton is probably selling for around about $600, so it's quite modest.

But it certainly covers any of the compliance costs and provides a little bit more.

But this is where the rubber really hits the road, because even though at the moment we're still selling every bale we produce, we can see what's coming at us, and it's already there in some areas, that brands and retailers have to be confident that their supply, their inputs have been produced sustainably.

So they'll turn to other organisations for guidance, because they don't know individual farmers, they don't know the systems and the like.

So in the textile space there's an organisation called the Textile Exchange, and they've came up with a preferred fibre matrix.

And so if I was a brand I'd say, "Well, okay, what does the Textile Exchange say? Do these qualify?" Well, fortunately when they looked at my BNP cotton, we qualified, but we didn't really score all that well, and that really had a scratch in our head, so we just scraped over the line.

And when we dig a little bit deeper they said, "Well, you haven't addressed human rights issues." Well, hang on, we live in Australia, we've got so many regulations and controls, what human rights issues, well you haven't specifically addressed them in your program, so we need to revamp it.

But there's some other issues that we haven't addressed in the way that they would like us to address them.

So we're going to take the next step, and as an industry over last year we spent a whole lot of time working out what we're calling our Australian Cotton Industry Roadmap.

And a number of things will come out of that, and you can see them listed there as key headlines.

We know that we have to be able to demonstrate our sustainability, so part of that is probably doing a refresh of my BNP.

So when my BNP was created, it was really all about us improving our act, making sure we maintained ourselves as an industry, made sure that as an industry we were sustainable, but we weren't thinking about brands looking back at us and saying demonstrate what.

So we have to adjust it so that not only continues to meet our needs as growers, but also meet the needs of the brands.

Part of that, or a subset of that, is dealing with this human rights issue, just making sure that we can actually demonstrate what we strongly believe is the case, that we do manage our human rights issues in Australia very well, but we've got to be open and transparent about that.

One of the key things with all of this is around traceability.

So how does a brand know, even though they said that they've bought my BNP Cotton or bought some other sustainable cotton, how do they know that's what they've actually got? And so we need to have traceability systems in place.

Right at the moment when a round bale picker picks a bale of cotton, it geolocates exactly where that cotton was produced.

It's got an RFID tag on those modules that goes through all the way to the spinning mill for, but after that it can get a little bit messy.

So how do we provide it all the way down the supply chain? There's some really cool technology about that.

There's a company called Oratane, and I believe they can do it with any organic product at all.

They could take a sample of this shirt, run it through their machine.

Because we've tested samples all over Australia from cotton, they can not only pin using isotopes and micro elements, they can not only say it's definitely Australian cotton.

They could say that it was actually produced in the Murrumbidgee.

They could actually say it was produced at Colley Ambly, and they could probably say that it was produced at Peter Shepherd's Farm at Colley Ambly, and maybe even to the paddock if they got enough samples.

There's another traceability program where at the gin they put just a very small amount of synthetic fibre in right through the supply chain that'll flow through, and you could be where I normally shop, Fifth Avenue in New York, and I could put a scanner on the shirt, and not only could it tell me that it was Australian cotton, but you could have the grower and tell that story, which is something that brands want.

And I think I'm getting the wind up, so the other ones that we've, it's been talked about a lot, industry data.

We need that data, and it's your value.

I don't even get the wind up from myself.

So what we're saying is, somehow protect your data at the moment, make sure you collect that data.

There's got to be value in that data.

Don't be in a rush to give it away.

And promotion is the other leg.

We need to be able to tell our story and help the brands and tell the story to the consumers.

So thank you very much for a quick fly through on the Australian cotton industry.

[ENDS]

…Post-farm gate greenhouse gas emissions for a value added product? Oh, excellent question.

At this stage, no, because it is principles and criteria and working on indicators and stops at the actual measurement.

That will be something that will have to be taken into account in sustainability frameworks.

The AASF is largely focused on what happens on farm and there's an ongoing debate on how far up the value chain it would go and it's probably a question better put to somebody who's already doing this sort of thing in the supply chain.

So whether Michael or if you'd like to maybe comment as well on how far up the supply chain your measurements go.

I suppose it's more of a case of where they're going to at least in the short to medium term.

For us it's at least to the cotton gin and maybe to the port.

Would be a lot more tricky for us offshore but in terms of the work that we're doing around data and I suppose traceability and transparency, we want to have a system where that data, wherever it comes along the supply chain can be tacked on and travel with the cotton.

Michael? And I think importantly, yes, certainly measuring is a core part of cool soils and looking at the carbon levels within the soils but also in the farming operations from a scope three perspective but importantly it's what you do with that data and how you actually look at the practice change process that actually helps the farmer improve the reduction whether it's carbon or in the future the other derivatives.

And just one important clarification that the sustainability framework is not a reporting tool, it is guidance about where you can look for reporting tools that are specific to what's materials your farm business.

So for some people that will be all the way through scope three and all the way through different embedded attributes in a particular product and for others it's less material, it all depends.

Hands up if you do have a question, we'll bring the microphone over to you.

Katie on sustainability frameworks, one of the questions came in, most farmers wouldn't even know they exist, does this matter? They wouldn't know that the frameworks exist? Yeah, a lot of them don't and it only matters in how much guidance you think you need.

So I sort of cut it short at the end but that picture I had up with the farm with the lovely orange sunset, those are friends of mine who have some cattle, they have a few sheep, they cut a lot of hay, got a few chooks on the side, they're really sustainable farmers, they would never describe themselves as that if you ask them.

They propagate their own trees to revegetate different areas of the farm, they're always looking for organics over chemical inputs just because they feel like it's the right thing to do.

So they're not really looking for reporting frameworks, they don't sign up to the beef sustainability framework, they're not involved with the Behind Australian Grains initiative but they would like a bit of guidance on how they can actually address what is most important to me from a sustainability attribute that I can focus on.

So with all the 17 across the double ASF which do take into account things like cool soils and cotton BMP, it's not about saying I've got to go through all these 17 and tick every single one of them off, it's reading through them and saying this is an area I don't really know enough about and it might be human rights, why don't I know enough about it, do I need to learn more, is there something I need to do here or am I covered, is there legislation that's already protecting me here and I know that my business is going to be sustainably looking forward.

Fantastic, thank you.

There was a question over here.

Yeah thanks Joanne, Michael my question is to you, it's a little bit off target but nevertheless I think relevant.

In Australia we have two wonderful natural fibre industries being cotton and wool.

Your opposition is synthetic fibres, I'm just wondering why the two industries don't come together and work together to emphasise the benefits and the sustainability of the products that you both produce because currently it seems to me that you're advertising and you're pitched to the consumer, you're basically competing to each other and cannibalising each other's product, I just think that there's a real opportunity to work together for that natural fibre industry.

Yeah, I think there's probably a lot more work done behind the scenes between the two industries and be aware of and certainly some of the response to what's happening in Europe is being very much coordinated between the two and other, I think there's something like 17 natural fibre organisations that are banding together on that.

But to that right, our competition is manmade fibres, it's not natural fibres and there's opportunity always to sing the plays, I mean nobody's going to try and out-compete cotton over wool or wool over cotton, that just doesn't make any sense at all.

We'll look for more questions in the room but while we're doing that, with growing demand for traceability from manufacturers and retailers, how can farmers balance transparency with protecting their data and how are we addressing data security and sovereignty? Farmers might be able to talk more about data security and I know it exists, I don't know the detail, NFF has helped develop the Farm Data Code but I think what we're learning and seeing from our industry is that, and it's probably in conjunction with your industry bodies, but just remember it is your data, hold that data and don't give it away unnecessarily.

I don't know in many cases whether there's huge value or moderate value or just a small amount, but I'm sure there's value there.

One of the brands I was speaking to in Sydney yesterday was talking about a Brazilian example where he was buying cotton over there under a sustainability framework there and he was adamant that he was actually ensuring that something in the order of 15 to 20 cents a kilo extra was going straight through to growers.

Now to put that in perspective, he was talking US, so from a cotton perspective that's something like $80 a bale compared to the $2 to $6 a bale that we're getting from BCI.

So at least in some circumstances data is valuable and you need to continue to own it and use it as you want to use it.

And I might add, and I think Michael you're exactly right, I think one of the key attributes and we're in partnership with a number of the RDCs and CSIRO in developing the Ozag data exchange because one of the things that we've recognised is not only is data security important but the simplicity of managing data, particularly for producers, is critical.

Most producers have multiple customers, multiple partners in the supply chain all asking for different data.

The idea of bringing a platform together to enable access to that data in a controlled, safe and secure manner to consolidate and allow the reporting to occur is a critical piece of a security but also simplifying the process for producers.

Being able to create an enablement for your data to be protected but connected is a key outcome and that's a real goal, particularly in the agricultural sector.

And the only thing I really have to add on top of those and completely agree with the other two speakers, I don't mean to undersell data security, it's absolutely vital, my bank account got hacked a couple of weeks ago, it's not fun, data security is absolutely vitally important but also be realistic and don't get drawn into fear mongering about people coming to take your data and steal your data any more than you would with your regular life.

It is a problem for farmers, it's a problem for everybody and I do find it frustrating when people sometimes say, oh I don't want to give away my data to the people who are going to use it against me while they're tapping away on Facebook and having all of their data mined constantly and having drones fly over their property and map it and there's data out there already so be realistic about what your expectations are, be vigilant and be aware but also don't get drawn into the idea that somebody's going to come and rob you of your data either.

Well on the topic of fear, one of the questions is how can we as producers not be sceptical about these sort of bigger companies shoring up their scope three emissions at farmers expense, you know where's the value proposition for the farmer is the question.

You should be sceptical because they will use it against you, absolutely or not against you but they'll use it to their own benefits so that can sometimes just work against you but I think this is what comes back to when I keep harping on about the double ASF being about shared values and about future proofing Australian agriculture, these are the things, these are the benefits, the financial benefits and the potential premiums or the access to preferential finance, those are all really good things to have but the reason you want to focus on sustainability efforts is because you want to do the best thing for your business, your community, your family and the land that you manage, that's why you do it and these other things are additional attributes as well, not the core reason to do it.

So be careful and call out greenwashing when you see it is the best way to attack that.

Two fast questions as we head into afternoon tea, how long does it normally take farmers to become accredited or complete the MyBMP program? Are many farmers taking up the opportunity? Almost universally the excuses that farmers say, oh we can't do it, we don't have time to do it or we don't have a chemist shared in place or we haven't got all our fire extinguishers and then when they get through the program they go, boy that was a lot easier than what we thought.

The reality is out of all those practices they are probably doing somewhere between 80 and 95% of them anyway just in their day to day operations, they're just good sensible things that people should be doing and it's a great checklist to just find out any places that you're missing.

So the reality and the perception are two different things in terms of people who are fully accredited, council about 30-32% of our crop at the moment.

Nick, why are the, this last question, why are the soil carbon measurements in the Cool Soils Initiative only measured to 10 centimetres when good soil carbon sequestration occurs beyond one metre? And it's a current project to look at how we're actually developing and moving further down in the soil profile.

I suppose we had to start somewhere and to build a database up and to then also have the techniques that we can roll out across a broad array of soil platforms but also producer bases.

So that next piece of work is being evolved and developed and as we know nothing stays the same, technologies are continuing to improve and the ability to have that if we think about a 200 grower trial that's fairly easy to manage, scaling that to 20,000 is a very different proposition.

Thank you so much to this panel.

The expertise you brought this afternoon is incredible, we've all been the beneficiary of your experience and insights and your presentation so please put your hands together for our panel.

Thank you.

When we come back from afternoon tea we're here together for an hour of panel sessions with very engaging speakers who are speaking from their own experience.

We have farm managers, we have a farmer and we're talking about on-farm natural capital accounting.

That will go from 3.30 till 4.30 and then there will be networking and drinks from 4.30 till 5.30.

So please go and enjoy your afternoon tea and we will see you back here at 3.30 sharp.

Thank you.

[ENDS]   

[APPLAUSE] [INAUDIBLE] Thank you.

Thanks, everyone.

And I was told I had 15 minutes, so I'm going to go overtime already.

But you'll have to forgive me for that.

So just a very quick introduction, just make sure that the slide moves forward.

Any second now.

It is really off-putting, having your giant head up there.

Is that going to-- if I keep clicking? One second.

Nope.

Back.

And back.

All right.

There we go.

So just a very quick introduction, sorry about that, for those in the room who are unaware of the Australian Farm Institute where I was, the general manager when I accepted this invitation, and I am now the executive director.

The Australian Farm Institute is an independent think tank looking at policy issues which impact the economic and social well-being of Australia's farmers.

And its purpose is to ensure the long-term viability of the Australian agricultural industry.

And it is our 20th year of operations.

So today, I'm talking to you about ESG aligned sustainability reporting, specifically about the Australian Ag Sustainability Framework, as Gillian's mentioned.

So you've heard a lot of information today.

I'm going to give you a very, very quick refresh, just so you can get your mind back on this particular topic when you're trying to hold all those different topics in your head as well.

ESG is a term which is normally applied to reporting, usually focused on investment appetite and on regulatory compliance.

I'm a little too short to see what's going on down there.

I'll just stand up.

There we go.

So those are the kind of things when you're talking about ESG-- I'm going to do this.

That's more sensible, isn't it? When you're thinking about ESG, that's kind of the frame of reference that we're talking about there.

Sustainability is different.

People use sustainability in a lot of different ways.

It's overused.

It has lost a lot of its meaning.

It can be applied in different contexts.

And those things sometimes are applied in ways that make it sound like it's a marketing attribute or it's a premium add-on thing that you should do in addition to the rest of your farming.

It is not those things.

It is not marketing jargon.

It's about making sure that we have sustainable farming businesses that are here for the long haul, about making sure you've got continued stewardship of the resources, the many, many different resources that you have to manage so that we are farming not just for today but for future generations to come.

So putting these things into context, we're going to take a very high level view, and then we will drill down into the framework itself, I promise you.

Looking at the six different capitals to put natural capital into context, because that's a lot of what we're talking about when we talk about sustainability, but it's not the only thing.

We all know when we're talking about reporting what our financial commitments are.

Most of us have got a pretty good idea on our manufactured capital as well.

We understand what that means.

It's our plant.

It's our property and equipment.

But you've got to really think as well about how you're using human capital in your farming businesses, how you're using intellectual and social and relationship capital as well, and of course the natural capital in which we all draw from in order to be farmers.

So the six capitals as explained here are part of the integrated reporting system.

And this is where a lot of the rise of that ESG language comes from, because we've historically had a very strong focus on the financial and the manufactured capital.

And only recently have we started to focus more on what are sometimes called softer attributes, but are really actually pivotal, those human capital aspects, social and relationship capital, intellectual, and of course natural capital.

So now I've got a really busy diagram to bamboozle you with.

But this is important, because again, it helps us focus on things we've historically overlooked.

If you think about those capitals as being inputs into your business-- so the stuff in the middle, if you imagine, that's your organization, it's your business.

This applies to anything, whether you're a nonprofit think tank, whether you're a cattle producer, whether you're an LLS, all of these things apply to your organization and the way you do business.

You draw down on each of these different capitals in order-- those are your inputs-- in order to create the activities you need to get stuff done, which create outputs, which might be in your case commodities.

And those outputs lead to outcomes, because just an output by itself is meaningless.

There's no point saying, look, I've grown some grain.

If that doesn't then translate into an outcome, which is that you've sold it and you've got some market return for it.

Importantly, though, you've got to think, not only are you using those inputs to make those outputs and outcomes, but then how are you reinvesting back on the other side of this diagram here to make sure that what you take out of your human capital pool as an input is then reinvested on the other side.

So you can reuse it, and the cycle keeps turning around.

So it's about how we create value over time and to be able to pick out where we might be eroding value over time as well.

Now, there's been a lot of talk, not just today, but just generally in the economy at large, about pricing and costs and monetizing these kind of outcomes that we're talking about.

That's an important output of the processes, but we need to focus on outcomes about deciding what it is that our society values, and we're attaching that value and how we can measure that.

And that's what these kind of reporting systems are about.

So just keeping that very clear in your mind as well, price is one thing.

Value is quite different and can be quite broad.

All right, now we get to the framework.

The double ASF is an outcomes approach to ESG aligned sustainability reporting.

So my first task, again, still taking a high level view in trying to explain what the double ASF is, is explaining why we've taken an outcomes-based approach, because that's a globally unique thing to do.

Most sustainability frameworks start with what you know about what's going on, the individual things you can measure, and then they build up a picture.

And this is the only framework in the world that is, A, country-specific, or it was the first one in the world, there's others now, country-specific to agriculture and takes a shared values approach.

Another high level diagram, I do love my diagrams.

There has been a lot of activity and discussion in sustainability in agri-food systems on what we do, on measuring sustainability, and what's largely been missing is the why and the how.

So the focus on the what, the things that keep you busy every day, is a very natural response.

It's an analytical response that comes from that part of your brain that's trying to logically understand what we need to do to get to the next task.

But what happens when you focus only on the what, or specifically on the what, is that it can lead to then a focus on prescribed practices for sustainability.

And that runs the risk of constraining innovation and excluding other practice adoption can create barriers in markets.

And so by prescribed practices, an example would be in the EU when they set a goal of 25% of organic production within a certain number of years, they weren't looking about whether or not they were creating sustainable agri-food systems.

They decided, they made a values call that organic was more sustainable, and they set a target for organic production without considering what the perverse outcomes that might be.

And they didn't actually set a goal that says, we wanna be more sustainable by doing this.

They just said, we want to do this.

And they've actually ended up in a world of pain because of it and caused problems in their markets as well.

So those sort of targets go to that analytical section.

The limbic brain, some high level terms for you there, is where trust and instinct live.

And most of the choices that we make feel rational, but they really come from more of that limbic brain, that instinctive response to things.

And this is why the AASF is taking an outcomes based approach, because your responses tend to be motivated more by what you feel than what you know.

So examples of this would include why people buy designer handbags instead of just carrying their keys around in a shopping bag.

It also would explain why people vote in a particular way, even if they disagree with a particular candidate or a particular issue, they vote sometimes against their own logical response.

And it even explains to some degree, why people continue to farm when there are arguably much easier ways of making a living.

All of these different kind of responses speak to values driven choices.

It doesn't mean that logic and analysis is removed from the picture, but it means the ultimate driver behind why you've made that choice is a values response.

So how does all that relate to sustainability reporting? It's because it's a really, really messy confusing space.

If you try to approach it analytically, you get overwhelmed very, very quickly.

It is a crowded, crowded space.

There's a whole lot of different trade-offs involved.

There's ambiguity involved in what kind of actions are important and where your priorities would lie.

There's all these interconnections, not only within agricultural systems, but across the economy.

And sometimes if you make a bad choice, you can get a perverse outcome when you're trying to be sustainable, you can end up actually making things a little worse.

And so when you're talking about focusing on these kinds of things, the analytic response gets overwhelmed.

People get choice overload, they get decision fatigue, and they just switch off and they don't engage.

There's other things involved in like a status quo bias and zero risk bias where we're really busy making all these different choices every day.

When we're faced with things like this that look busy and confusing, we just say that sounds like somebody else's problem, I'll leave you to it.

And that's why some of these sustainability frameworks don't get taken up and don't succeed.

So here's where the sustainability framework comes in.

This is not really the why of why we wanna be sustainable.

This is a what, this is the product end of the scale.

This is a guidance framework that helps us just decide communally and collectively what is important to focus on.

It's funded by the way, by the Department of Agriculture and it's managed by the National Farmers Federation.

Australian Farm Institute is one of a series of service providers to the project.

So we've written the framework itself, but there's a lot of other organizations that are involved in looking at data ecosystems and communities of practice and making sure that this is not just words on a paper, but there's something that can come to life and be meaningful for the community.

That's just the same thing, I think, with different level of detail.

So the how, where all of this belongs.

The what is the framework itself, the process, how it all works, is that it lives in this giant ecosystem of other sustainability initiatives and this is not necessarily the best diagram, it's an older one that I just kind of cribbed together at the last minute, so if you're screenshotting it, don't ask me questions later about why a logo is missing, but it shows you that it lives within this ecosystem where there are a lot of different commodity frameworks and initiatives already underway and we're gonna hear from a couple of those people coming up next as well in more detail.

That there's farmers undertaking different certification or compliance programs as well who are feeding into their commodity frameworks, but also into natural resource management and other initiatives.

We've got pressures coming from global sustainability reporting standards, also from the finance sector, there's more ESG reporting coming in, there's mandatory from later in this year, and all of these things together feed into the high level shared values that the Australian Ag Sustainability Framework articulate.

And in return, the framework itself can feed back to some of those things about how the Australian context is putting these things into play.

So the why, why this is important has been explained back to me and even actually explained by me in a number of very different ways and these might include things like it's a communications tool.

This framework helps us communicate better with our stakeholders.

Other people say it's about facilitating trade.

This is the purpose of the framework, it helps us to deal more easily with our overseas markets or even domestic markets.

We heard earlier about the Sustainable Finance Initiative and this kind of thing can help us access finance by demonstrating alignment with these kinds of principles.

It can help us instill consumer confidence in people by again clearly articulating and communicating the goals that we're striving for.

And that in turn can bolster our social license which we know is absolutely vital for us to continue to farm.

It can help us build political capital by demonstrating that the industry is clearly ahead of policy on a whole lot of issues here and showing our openness to discussion.

And it can help to harmonize efforts across all the different initiatives that are underway across Australian agriculture.

But none of those things are the reason the framework exists.

All of those things are outcomes that the AASF can lead to.

The purpose of the framework, the why this is in place, is that it's here to help future-proof Australian agriculture.

And that sounds really bold and audacious but if your focus of why you're doing this is so you can communicate better, that's a bit of a dead end.

It's limited.

If your focus is on I wanna be sustainable because I wanna make sure my farm is still here for generations to come and I'm leaving things better than I found them, that's the purpose and these other things will come out as outcomes.

So I'll take you on a very short deep dive because I don't wanna take all of the time on what the framework actually looks like.

You've got, I know you can't read any of those words but I'm gonna go through them in a bit more detail.

17 high-level principles and under those principles or ideal states, we've got conditions that you need to meet to reach those states and then we're developing indicators or measurable states, I guess, on what you would need to measure.

But if you look in detail at principle five, biodiverse ecological communities are protected and enhanced.

That's a clear statement that has resonance to Australian producers, it also has resonance in global markets and it's consistent across a number of different frameworks.

So this list down there on the right-hand side of the slide, that's some, not all, that's just a few examples of some of the places that align directly with this principle and these criteria.

So this is about articulating the principles that are common to all of those different schemes and frameworks in a way that's specifically Australian.

I won't go into detail for the next one because I know I am short of time but we've got one of these slides for every one of the 17 principles and you can download this off of Fireminstitute's website and have a look at it in your own time.

But here's where it gets sticky.

When we start talking about what it is we want to measure and all the different ways this align, everybody keeps asking, where's the data coming from? How much data do we have? Where are the data gaps? And the short answer is, you tell me.

That'd be great to know because that's what I'm working on at the moment with the team and it is hard.

It is a really hard job.

It's the next stage that AFI is undertaking in the AAASF project is to look at those measurable states and start trying to find out where we have data and where we don't.

There's a lot of people, not just AFI, working on this particular problem and it's good to know that those are the people who really matter in this game.

It's CSIRO, it's the Australian Bureau of Statistics, it's ABAS, it's the Department of Ag, it's all of your industry representative bodies and most of your RDCs.

Every single one of them asks this question almost every day.

So there's a lot of people working on this and there is some really good initiatives underway and I think some of the next speakers can talk to us more about that as well.

One little bright light at the end of this long tunnel is that there's some very good work at the moment looking at how existing farm reporting systems that are used for business management can also demonstrate sustainability attributes because you would already know that a lot of the work that you do on farm is about sustainability.

It's about improving what you've got under your management and so if some of those systems can be used not just for your farm business but to demonstrate your sustainability then it's a tell me once approach and you're not having to do it over and over again.

I'm nearly there.

I was gonna talk briefly about the drivers behind why this framework has been put into play as well but I'll skip through them very, very quickly.

Again, it relates this framework to ESG in that it's got an environmental stewardship element looking at what climate change impacts we need to be aware of.

We've got people, animals and community and we know that we've got different social pressures, that there's land use competition, that there are animal welfare issues, that we're trying to respond to as well and the governance or the economic resilience is largely related to compliance reporting but skipping past that, really the short story is this is here to express the shared values that we all share and it's been created not in isolation by the AFI but in discussion with many, many different participants across agriculture over a period of three and a half years, articulating those shared values that will help us future-proof Australian agriculture so that we can keep farming into the future.

(audience applauding)

[ENDS]   

So I am going to, I'm not sure, yep, Fiona's obviously a lot better looking than I am.

I'm going to give you a very quick, because I was told I needed, I had five minutes, so I'm going to give you a very quick overview of cool soils, but probably spend a little bit more time about what's the next deterioration and where are we going within the cool soils framework.

So what is cool soils? So cool soils is essentially a partnership between the supply chain in the grains industry.

We've got partners from Kellogg's, Allied Pinnacle, Pepsi Co, Mars, Manildra, Corson, coming together to understand what their scope three emissions is today, but what it needs to be in the future, and working then with their supply base to help the producers on the journey of how the producers go about reducing scope three emissions.

The critical piece to the program isn't around what's the number, it's actually what's the practice change that enables a reduction in emissions.

The reality is the supply chain needs to report against emissions moving forward, and they'll need to report against changes in the emissions, and that's a critical trigger point for practice change, and working with the supply base and the farming communities to develop new practices, improve practices to actually help farmers and producers reduce their emissions.

Essentially the program works on the GHG emission reporting with benchmark data across the regions, and importantly this is a science and evidence based model using a global platform called the Cool Farm Tool.

So really great to see that we're internationally recognised in the calculation of the number, scientifically validated to Australian conditions.

There are some very unique frameworks around Australia that make us different as a producing nations to other parts of the world, but we need to be able to be globally relevant and globally evidence based.

The consolidated data, and I haven't been here for much of the morning this morning, but it's been really interesting to hear the last couple of presenters talk about data.

The whole focus of the Cool Soils program is not to replicate existing data that exists within producers, to actually find new ways to draw down on that data, partner with other data providers, and to consolidate that data into a framework to produce an emissions result, and then to help develop reporting back within the supply chain, but also most importantly and the horizontal to support practice change, understanding the practices that can be improved within the production system, identifying the levers that can be used to actually apply practice change, test those innovations, drive impact, and actually create a community of practice within the farming communities that supports emissions reduction practice improvement.

And that's a critical dimension.

It's not about just measuring.

It's around how do we work within the communities and across the supply chain to reduce emissions.

Every farmer receives a detailed report on their results on an annual basis and the changes that are occurred, but most importantly they also receive a benchmark around how they're performing against their cohort, but importantly also what are the activities, what are the practice changes that they can be undertaking, what does best practice look like that helps evolve the emissions reduction program within a farming community.

It's really great to see in the program we have, we have over 200 growers in the original project and we're now scaling that across an industry with the supply chain partners.

Over 400,000 hectares of validated data over five years.

And you can see there some of the key results, the emissions intensity, but the most important one is the emissions trend line.

So reduction in emissions during that five year period, not because we measured it, but because we actually supported the farming communities through the support and extension and adoption programs to help farmers reduce their emissions feeding into their supply chain.

What's next for CSI? So obviously one of the core parameters of this has been a very strong project in partnership with the major members of the program over the last five years.

We've just announced in February this year the expansion of that program, reinvestment from the supply chain.

I think this is probably one of the key triggers to this.

This is not funding that we're drawing and asking producers to provide.

This program is actually funded and supported by the supply chain.

So we're actually trying to get the funding and investment from within the supply chain so it doesn't end up on the producer's bottom line.

Obviously one of the key parameters is to expand beyond our current grain portfolio with the introduction of beef, moving into mixed farming, introduction to other crops and areas such as wine, grapes and the rice industry.

That will give us the ability to actually expand into mixed farming and a complete array of commodity services, again with the supply chain partners, focusing on helping producers improve their carbon emissions as part of a scope three analysis.

And then why this is so important for the conversation today is, as I mentioned in my opening address, I've just come back from two weeks to look at what's on the horizon within the European context.

Biodiversity, natural capital and regenerative agriculture are coming at us.

Whether we like it or not, that's the reality.

The European Union is currently working out what do those terms mean, what do they mean to the sectors in which they apply, but also to the farming communities in which they apply.

As that evolves, we will see like carbon emissions, those areas around market access, regulatory controls, incentives, whether it's producer incentives, whether it's market incentives, start to play out and see the introduction of these concepts being brought into effect in Australia.

So what we're focused on is taking our base platform and looking at in a cooperative sense with our producer cohorts and the supply chain to start to understand and establish the right parameters around natural capital, the right parameters around biodiversity and regenerative agriculture, and to enable us to think about what does the future look like, how do we measure, how do we actually understand it first and clearly define what it is, how do we measure it, but importantly, what are the practice changes that might need to be incorporated into farming operations to improve the activities around natural capital, regenerative ag and biodiversity.

That is effectively coming down the pipeline, as is our host, telling me to wind up.

So thank you.

[ENDS]