Rural Bank has warned that while there are currently no pecuniary or legislated penalties for delaying business decisions to take up carbon farming, farm businesses face potential "commercial disadvantages" for not reporting greenhouse gas emissions when asked or taking steps to minimise them.
The observation was contained in a new climate report released by the bank seeking to help farmers navigate burgeoning carbon markets and mandated emission targets reaching the farm gate and impacting agribusiness value chains.
The bank said the more successful strategic on-farm business decisions were now factoring in climate change impacts and considering market access barriers associated with emissions quantification and leveraging carbon farming opportunities.
Rural Bank head of development, business & agribusiness Andrew Smith said, regulators aside, consumers, buyers and suppliers were increasingly seeking information on the sources and sustainability of the food and other agricultural produce they are purchasing.
"We expect this information to increasingly be a factor in contract and procurement decisions, at the checkout and from export markets considering buying Australian produce amidst competing exports from other countries," he said.
The report said recognised that the commercial landscape around farming businesses was a complex, interacting and evolving matrix of moving pieces that made clear decision-making difficult.
However, it said "not making a decision is also intrinsically unsafe."
"The more successful approaches seem to include taking steps where a business can capture benefits," the report said.
"There are no penalties for delaying a business decision to take up carbon farming opportunities. There may, however, be commercial disadvantages for businesses not reporting on their greenhouse gas emissions when asked - and taking steps to minimise them."
Mr Smith added that technological solutions to reduce emissions would particularly appeal to financial markets because new technologies, new patents and protected markets could provide a commercial advantage.
Carbon farming involves land managers changing practice to reduce greenhouse gas emissions or capture and hold carbon in vegetation and soils.
The report also called for increased research and development funding to help improve the e economic feasibility of agriculture and to prepare it for the broader role the sector and land management will play in helping the nation reach mandated emission reduction targets.
It said the two most difficult challenges for agriculture commodities will come in the form of rising temperatures and temperature range change, with rising maximum temperatures for example set to increase the risk of heat stress in cattle and the frequency of heatwaves.
The scenario will also particularly impact the dairy industry, with predictions that many businesses will likely migrate to more favourable regions, if that was an option, or switch industries.
