From Invisible to Invaluable: La Trobe Research Redefines Farm Profitability
Fifty-eight percent of the Australian continent is used for agriculture, and natural capital assets—like soil, water, pastures, and biodiversity—underpin agricultural production. Yet conventional financial accounting does not consider the natural assets on properties; they remain invisible in conventional financial accounts.
Associate Professor Jim Radford is part of a global movement to drive greater sustainability and protect biodiversity in the agriculture sector through natural capital accounting - encouraging businesses to measure and account for the value that natural assets—such as soil microbes, invertebrates, birds, and water catchments—contribute to their core production and profitability.
"Natural resources contribute to core primary production for livestock growers. It's not an add-on or a nice-to-have—it is core to production and actually improves your business bottom line," says Radford.
At La Trobe, Radford's team collected data about the natural assets on farms so farmers can measure their natural capital as an input to agricultural production. The team created a standardized tool to help farmers understand whether their management is building, maintaining, or mining their natural capital through the 'Farm-scale Natural Capital Accounting' project.
This is the first time comprehensive whole-of-farm natural capital accounts have been produced in bulk from different geographic locations across grazing, cropping, and mixed cropping-grazing farms.
Working with Farming for the Future, the team then analyzed the relationships between on-farm natural capital and farm business performance, demonstrating that farmers can be productive, profitable, and protect ecosystems simultaneously.
The Farming For The Future Impact Evaluation Executive Summary shows that 74% of farmers agreed or strongly agreed that combining natural capital with economic reports has the potential to change how natural capital is managed on Australian farms.
"This is important because agriculture's future depends on proving that environmental stewardship and economic viability go hand in hand. When farmers can quantify their natural assets and report to stakeholders and investors, they transform conservation from a cost into a competitive advantage," Radford explains.
The team has adapted their natural capital metrics to support the Woolmark Plus Nature Positive Farming initiative, measuring sustainability across Australian wool-growers.
Looking ahead, the team plans to expand data collection to new geographic areas and farming sectors and integrate with agtech partners to mainstream natural capital accounting as business-as-usual for farming enterprises. The models and outputs from this research are expected to be incorporated into agtech platforms and products, transforming how the sector values and manages natural assets on farms.
Published January 21, 2026