Farmers concerned about deforestation definitions in Westpac lending policy

Westpac is the first major Australian bank to prohibit lending to dairy, beef and sheep farms involved in deforestation. Farmers have described it as a ‘seminal moment’ for the industry.

Land clearing has been a hot political topic in Queensland. Picture: Kerry Trapnell / The Wilderness Society

Farmers have described Westpac’s plan to become the first major Australian bank to set a zero-deforestation target for loans as a “seminal moment” and urged the lender to discuss the proposal with food producers.

Westpac revealed the lending change on Monday, raising ­concerns within the livestock industry about how it would be implemented and the likelihood of it setting a precedent among banks.

The commitment would prohibit dairy, beef and sheep farmers from further converting natural forest to agricultural land use from December 31, 2025.

Farmers are worried that the bank could use definitions of ­deforestation not suited to the Australian landscape or agricultural industries to determine what is considered deforestation.

Cattle Australia acting chief executive officer Adam Coffey said overseas definitions of tree clearing were not adaptable to an Australian context because they did not recognise management of regrowth or of woody weeds, like lantana, which can show up on satellite imagery as cleared land.

“In the vast majority of cases, claims of land clearing are actually land that is legally cleared and re-cleared on a rotational basis,” Mr Coffey said. “Control of weeds and regrowth is critical to maintaining a functioning ecosystem, grazing lands and our food production capacity. Unfortunately, this hasn’t stopped activist organisations from now redefining clearing, or ‘deforestation’, to include regrowth.”

Tree clearing has been a sensitive political issue in Queensland for the past decade, resulting instrict vegetation management laws that the Palaszczuk government last month vowed to tighten further. Queensland-based AgForce chief executive officer Michael Guerin said Westpac should engage with the industry or risk being overlooked as a lender for food producers.

“This is a seminal moment which will determine whether Westpac is a bank for agriculture or not,” Mr Guerin said.

“If they accept the anti-farming brigade that wrongly asserts Queensland is a deforestation hotspot, they will be forever known as the bank that didn’t support agriculture or better environmental outcomes.

“But if they sit down and work with industry, and a co-design process to recognise the importance of better environmental outcomes and stronger biodiversity, they could well become Australia's leading agricultural bank.”

Westpac climate change and rural engagement director Steve Hannan said the bank had ­already engaged farming groups and would continue to shape its policy over the next two years.

Westpac’s net zero pathway for agriculture was designed by the Science Based Targets Initiative, a partnership between the non-profit Carbon Disclosure Project, the United Nations Global Compact, World Resources Institute and the World Wide Fund for Nature. It includes definitions of natural forest and a commitment to no deforestation.

“We will, over time, look to align the natural forest definition to an Australian context but that does not exist today,” Mr Hannan said. “Because 70 per cent of Australian agricultural products are exported globally, we need to be aligned to our customer base to make sure our product can get to market.”

National Farmers’ Federation president David Jochinke said he hoped the organisation’s own sustainability framework, which had been adapted specifically for Australia, would be adopted by banks.

“What we’d like to see is Australian sustainability credentials being used across the board, not only for us doing business with organisations such as banks but to also leverage that information for accrediting exports for international market access,” he said.