A new Food Agility project aims to help farmers with sustainable practices get better access to finance and to future-proof their businesses from environmental events like drought.
The project is a Food Agility Co-operative Research Centre (CRC) partnership involving the National Australia Bank (NAB), Australia’s single largest agribusiness financier, the Australian Wine Research Institute (AWRI) and leading data scientists at Queensland University of Technology (QUT).
It will identify links between environmentally sustainable practices among Australian wine-grape growers and long-term financial performance, a process known as natural capital accounting.
The outcome of the 12-month project will be a range of metrics that financiers can use to calculate risk and reward sustainable producers with more favourable lending terms, and that grape growers can use to understand which practices support long-term environmental and financial sustainability.
Food Agility CEO Dr Mike Briers said the project is the first in Australia to study natural capital accounting in the viticulture industry.
“Effective natural capital accounting methods are the holy grail in economic development. We all know it needs to happen, but no one has yet figured out how to do it properly,” says Dr Briers.
“Initial findings will focus on the viticulture industry. The next step will be expanding our methodology to look at different types of agricultural production.”
NAB Customer Executive Regional and Agribusiness, Julie Rynski, said banks currently calculate financial investment risk for agribusinesses with only part of the picture.
“We look at the value of land and farm assets and past financial performance. But this doesn’t tell us about the long-term sustainability of the business or its resistance to environmental events like drought and pests,” says Ms Rynski.
“We want to reward farmers who lower their risk and improve their resilience through sustainable practices with favourable lending terms, find out what they’re doing that works and share that information to help the whole agricultural industry.”
Dr Mardi Longbottom is the Senior Viticulturist overseeing AWRI’s Entwine Program, the grape and wine sector’s sustainability program.
“The reputation of Australian viticulture is based on quality, innovation and sustainability. This project will share best practice across the sector, helping to lift the whole industry to a new level of sustainable performance,” says Dr Longbottom.
QUT’s data scientists, led by Associate Professors Richi Nayak and James McGree, will analyse data from the viticulture industry to develop a series of financial parameters, sustainability indicators and natural capital models that support improved investment risk assessment.
“The ultimate aim is to establish a Natural Capital Financial Model and Framework to highlight the dependencies of relationships in the industry dataset and the critical factors in financial decision making,” says Associate Professor Nayak.