What is Australia's enormous Country really worth?

Partners in Performance, Matt O'Connor and Rob Fowler

Unlocking the True Value of Australia’s Land

Despite its vast size, Australian land is not living up to its full potential. Much of it remains idle or allocated for uses that barely scratch the surface of what it could offer. This is due to a variety of factors, including unsustainable land management practices, regulatory constraints, and conflicting commercial and environmental interests.

Like the rest of the world, Australia is seeing changes in areas like farming practices, energy resources, and technology, as well as urbanisation and industrialisation, to support sustainable population growth. There is an opportunity to design and integrate practices that heal the country into these changes in a way that benefits both the environment and the owner.

Pastoral leases make up around 44% of Australia by land mass and would be an ideal place to focus on to drive systemic change. Current land management focuses on more traditional livestock and cropping practices that operators are hesitant to change. With this view, we fail to fully realise our continent's capacity to provide value.

We need to envisage a landscape where a broad range of value-creating activities are integrated into the land management plan to achieve more productive and sustainable outcomes. Degraded land can be used for solar PV electricity generation. Wind turbines can co-exist with livestock, cropping and forestry operations. Buffer zones, waterways and hillsides can be enhanced to benefit nature, biodiversity and carbon outcomes. Traditional approaches can be integrated into the land management plan, including management of invasive weeds, pests, and restoring ecosystems. Importantly, the land’s productivity for food and fibre can be improved and maintained, with more jobs and less income volatility.

When assessing our client's land portfolio, we continue to identify significant opportunities with significant economic upside. This upside only increases when multiple of these opportunities can be ‘stacked’ and integrated onto a single land holding.

It is more than simply an ideal vision; it is an innovative method that has the potential to propel our pastoral industry and country towards greater economic success while simultaneously promoting environmental sustainability. To truly maximise these advantages, we must recognise the opportunities presented to us by new or improved technologies and additional revenue streams.

We see three fundamental enablers to unlock these opportunities:

Collaboration: Sharing knowledge and skills among landowners, traditional owners and stakeholders ensures optimal resource use and rapid adoption of improvements
Capital: Funding is essential for supporting innovative projects, developing infrastructure, and conducting land restoration
Cooperatives: Sharing of risks and rewards through structures like a cooperative enables landowners to adopt more innovative land management practices

Collaboration:

By encouraging collaboration and knowledge exchange between landowners, service providers, local communities, indigenous communities, research bodies and government agencies, we can move to a more valuable outcome for everyone. This collaborative approach ensures that innovative and sustainable land management practices benefit current and future generations.

Realising the full potential of Australia’s land and restoring essential ecosystems involves engaging with Indigenous communities, who have managed the land for thousands of years. Australia's Indigenous community has nurtured the land with an intricate understanding of its ecosystems, seasons and dependencies. Their land management practices are in harmony with nature, fostering a sustainable food system via traditional practices. Integrating this knowledge into management practices can increase biodiversity, improve soil quality, and enhance resilience. The collaboration represents mutual respect and a shared commitment to land restoration.

This can be seen in the case of ‘Savanna Burning’, which is a traditional land management practice and has been used by Indigenous Australians for thousands of years in Australia’s savanna landscapes. By conducting controlled burns in the cooler early dry season, they reduce the risk of larger, more destructive fires later on. These burns not only protect the land but also support biodiversity and reduce greenhouse gas emissions. Projects like Arnhem Land Fire Abatement (ALFA) showcase the benefits of these practices today. By reintroducing controlled burns, ALFA generates carbon credits and supports local communities, blending ancient wisdom with modern sustainability efforts.

Capital:

Patient funding is a critical ingredient to support innovative ventures, create critical infrastructure, and get on with the clean-up work which will enable Healing of Country.

Trying to make sustainable profits from the land is a volatile journey in Australia. This variability in farming conditions and open market dynamics makes it tough to invest with confidence in long-term initiatives on the land.

But this is changing. Australia is awash with capital looking for a long-term home and many international investors are seeing the opportunity in Australia’s land. The critical challenge is that Healing Country requires front-loaded and patient capital. We need to match that kind of funding with the well-known determination of Australian land managers to realise the full potential of the landscapes they oversee.

Macquarie Island's (named after former NSW governor Lachlan Macquarie) restoration story underscores the critical role of up-front and patient funding in conservation success. The island, plagued by invasive species like rabbits and rodents, faced severe ecological damage. The Macquarie Island Pest Eradication Project, with $24.6 million in joint funding from the Australian and Tasmanian governments, tackled this issue head-on. This funding enabled aerial baiting, ground hunting, and the use of specially trained dogs to remove the pests. By 2014, the island was declared pest-free, leading to a remarkable recovery of its unique flora and fauna.

Cooperatives:

In the agricultural sector, taking on more risk in land management is a significant challenge when agricultural commodities are the sole source of income. This economic pressure often leads to a conservative approach to innovation, as one poor season can result in severe financial strain or even bankruptcy for landowners. The cooperative model is one tool that can allow farmers to manage these risks and foster innovation in land management.

While cooperatives offer many advantages, from risk sharing and economic resilience to building community and mutual support, we see it as a key enabler for innovation. By spreading the financial risk across multiple members, cooperatives create an environment where farmers are more willing to adopt new technologies and ‘hard wire’ collaboration. This collective approach to innovation can lead to significant advancements in productivity and environmental stewardship and enable the diversification of income streams.

With the clock ticking on environmental concerns, the need to change our land-use patterns has never been more pressing. If Australian businesses and government organisations work together, they can lead the way by demonstrating the importance of inclusive partnerships in achieving ecological resilience and sustainable land management. Effective management of land and resources will ensure a more sustainable and prosperous future.

Australia’s land has immense untapped potential. By rethinking land management approaches, integrating traditional practices, securing necessary funding, and fostering collaboration through cooperatives, we can unlock this potential. These efforts will lay the foundation for a sustainable and economically vibrant future, benefiting both current and future generations.

About us:

Partners in Performance, part of Accenture, is an agile, fast growing international management consultancy; a leading global player in driving operational excellence for complex organisations. By working as true partners with clients, Partners in Performance enables lasting change in organisations; delivering both commercial impact and inspiring people to transform their behaviours.

Contact details:

For more information, contact: pip@iconagency.com.au