Bank backs farmers letting grass grow under their feet

NAB has becom­e one of the first lending institutions to offer reduced interest rates on farm land under conserv­ation.

‘We’re able to demonst­rate how we’re sustain­ably managing the land’: Rob and Nadia Campbell on Goondicum Station, east of Monto. Picture: John Wilson

National Australia Bank has becom­e one of the first lending ­institutions to offer reduced interest rates on farm land under conserv­ation.

The largest Australian agribusiness lender has thrown its support behind an increasing number of farmers stepping away from traditional management practices and pursuing long-term plans to build their “natural capital­’’ through environmental improve­ments. As private firms develop metric­s to measure conservation efforts, farmers are fast becoming able to put a dollar value on vital ecosystem services their land provide­s.

Rob and Nadia Campbell of Goondicum Station, east of Monto in central Queensland, have managed to capitalise on the finance sector’s acknowledgment of the urgent need to halt land degradation. They recently qualified for an interest-rate reduction due to conservation efforts that have been occurring on Goondicum since the 1960s.

The grazing systems developed have allowed large areas of native vegetation to regenerate and encourage­d native wildlife popul­a­tions to increase. “In terms of natural capital, we’re able to demonst­rate how we’re sustain­ably managing the land,” Ms Campbell explains.

“It’s really exciting because once banks are on board it’s them admitting that land degradation is exposure and credit risk for them. So by implication, and for economic reasons, they are trying to get people to look after the land in a more sustainable way.”

NAB is the first Australian bank to sign the Natural Capital Declaration — a global statement recognising the vital role of natur­al capital into the future. The bank is modelling ways to integrate natural capital considerations into routine risk assessment and is working to finalise products for farmers able to demonstrate envir­onmental improvements.

“In the case of the Campbells, the banker involved understands what they have done through their management and has been able to provide them with a more favourable banking offer,” says agribusiness customer executive Neil Finlay.

“Working out the value of natural capital and to get the methodology to measure an ecosystem service is challenging. Having said that, bankers who understand these practices are already­ accounting for natural capital in their risk profiling.

“Short-term overgrazing does­n’t actually show up in financial data, but the banker can have a look at the place and see that the customer may have a less sustainable farm in the long term. If we can help build more sustainable farming practices, when the next drought or climatic event comes then we hope those people are much more resilient.”

Goondicum has become a valuable research hub for universities, giving the Camp­bells data to demonstrate improvements. Farms that don’t attract third-party research programs, however, struggle to demonstrate the value of the ecological services agricultural land can provide.