FUTURE THINKING​

SARA SCHMUDE ON ECOSYSTEM SERVICES: The unsung hero of productive, profitable agriculture

Sara Schmude, Natural Capital Project Manager

Not so long ago, ‘ecosystem services’ were the purview of non-profits and natural resource management groups like Landcare, where I worked for over 15 years. Efforts to protect and restore ecosystems within a farm enterprise tended to be discrete; parts of the land set aside and managed differently to the rest.

But now, there’s growing recognition that integrating ecosystem services across the production system is a strategic imperative. Why? Because the productivity, resilience, and sustainability of food and fibre production depends on them.

Ecosystem services include essential functions like soil fertility, water purification, pest and disease control, nutrient cycling, carbon sequestration, and climate regulation. In a healthy landscape, nature provides all this automatically, and for free.

But decades of industrial agriculture has diminished nature’s ability to deliver ecosystem services. And overcoming their loss necessitates greater human intervention and resource input – leading to higher costs, and yet more environmental degradation.

In other words, it locks us into a race to the bottom.

REGENERATIVE AGRICULTURE IS THE CIRCUIT BREAKER THE PLANET NEEDS TO RESTORE ECOSYSTEM SERVICES

As an agricultural asset manager, Impact Ag Partners leverages ecosystem services as our key tool to enhance both the performance, and value, of agricultural landscapes. And to unlock them, we use regenerative grazing and cropping practices across all 600,000+ acres of our managed assets.

We’ve been in the game for over a decade, and have wonderful examples stretching from eastern Australia to Montana, USA. But I am really proud of our role in transforming one particular cropping enterprise in Australia (regen crop production still widely considered a harder nut to crack than regen grazing.)

Six years ago, on behalf of a global investor we acquired 10,000 acres in the Darling Downs of Queensland – a region known inarguably as prime agricultural land. But decades of heavy reliance on synthetic inputs had depleted soil composition and biology.

Impact Ag broke the cycle, transitioning to regenerative cropping practices, such as phasing out synthetic fertilisers and seed treatments; using a legume crop rotation to overcome nitrogen deficiencies; cover cropping; and managing water storage evaporation.

The result of this nature positive approach? A 64% greater gross margin per hectare compared to conventional practices – all by working with nature to restore its capacity to support thriving production systems.

SUSTAINING ECOSYSTEM SERVICES: THE IMPACT AG WAY

Whether working for an institutional investor or a corporate advisory client, our first step is always to look at the land asset in front of us – and determine the best and highest use for its natural capital.

There’s no one formula for every asset, because its soil, vegetation, water, and biodiversity potential is unique. But our farm managers use a toolkit of regenerative practices to restore and enhance ecosystem services – an approach we’ve successfully applied since 2010 on over 20 agricultural assets.

PRACTICEBENEFIT
Conservation tillage:
implementing reduced or no-till practices
minimise soil disturbance
reduce erosion
improve water retention
preserve soil organic matter
Cover cropping:
planting cover crops during fallow periods
prevent soil erosion
suppress weeds
improve soil structure
increase organic matter content
Crop rotation and livestock integration:
rotating crops to diversify plant species and root structures, and introducing livestock at strategic times
reduce pest and disease build-up
enhance soil organic carbon
improve soil fertility
promote nutrient cycling
provide habitat for beneficial organisms
Biodiverse revegetation:
integrating tree, shrub, and groundcover layers into agricultural landscapes through practices such as windbreaks and riparian buffers
shelter for livestock
soil erosion control
habitat for wildlife
carbon sequestration
microclimate regulation
Time-controlled livestock grazing:
employing rotational grazing systems to ensure proper utilisation of pasture resources
promote grassland health and productivity
prevent soil compaction
enhance nutrient cycling
support biodiversity conservation
Wetland restoration:
restoring and conserving wetlands on agricultural lands
improve water quality by filtering pollutants
reduce flood risks
provide habitat for aquatic species
Agroecological diversification:
embracing polyculture, agroforestry, and biodiversity-friendly land management practices
foster ecological resilience
enhance natural pest control
promote overall ecosystem health
Water management:
implementing efficient irrigation practices such as drip irrigation and soil moisture monitoring; and livestock watering system to improve efficiency and water quality
reduce water waste
conserve water resources
minimise soil erosion
preserve aquatic habitats

Our return on investment? More productive, profitable, resilient, and environmentally sustainable agricultural ecosystems. Today – and for the long-term.

Ecosystem services not only enhance agricultural production but also present significant value creation opportunities via the natural capital marketplace.

Check back in to read our next Future Thinking article on how we help investors generate revenue streams from optimising their natural capital assets.

FUTURE THINKING