Are Biodiversity Credits an Opportunity for Sheep and Beef Farmers?

Biodiversity measurement for sheep and beef farmers in New Zealand must be affordable, relatable, and have relative ease of entry to market. This research explores the potential of biodiversity credits to incentivise sustainable practices in the agricultural sector.

There is a need for robust, farm-scale data to demonstrate how biodiversity delivers measurable ecosystem services and financial outcomes. It emphasises that accurate biodiversity measurement requires comprehensive monitoring of ecological indicators, often requiring specialised expertise and investment, which lead to high administrative costs.

However, to encourage farmer engagement, a key challenge is simplifying the measurement process while ensuring credibility and avoiding greenwashing. International comparisons show that overseas markets have developed various approaches to biodiversity crediting, with mixed results. Literature suggests that processor and government incentives can play a significant role, to recognise the effort of prior projects of landowners and encourage the uptake of new biodiversity development.

The New Zealand agricultural sector has historically prioritised production over protection, often driven by financial factors. New Zealand has a unique opportunity to commercialise its biodiversity, given that a lot of established residual biodiverse land is marginal for traditional pastoral farming. The existing carbon market and Emissions Trading Scheme (ETS) is considered more mature than the emerging biodiversity credit market and learnings can be taken and applied, including better carbon sequestration data for native vegetation to encourage farmers to choose native species over exotic monocultures.

Farmer surveys reveal a strong interest in biodiversity credits system, with 83% surveyed seeing value and opportunity. Landowners are motivated by freshwater and ecological improvements and perceive regulations as a major challenge. Many farmers have planted natives, often self-funding these projects, showing a true altruistic stewardship ethic. Volatile livestock markets, unclear financial incentives, and operational costs are key concerns and a combination of carbon and biodiversity credits is seen as alternative sustainable income source.

The report identifies several recommendations to promote the adoption of biodiversity credits on farm:

• Updating of Ministry for Primary Industries (MPI) carbon sequestration tables to reflect the true value of native sequestration, making native establishment more cost effective to establish
• Processors through their membership of NZFAI to establish low-entrylevel uncertified biodiversity credits, and simplifying measurement for farmers, utilising the NZFAP accreditation system working with existing tools such as the Biodiversity Assessment Tool, helping farmers start the journey of recognising and measuring the value that biodiversity has on farm from both and economic and environmental standpoint.
• The government needs to set the rules and ensure the market runs efficiently, creating surety and stability of the market, setting a minimum dollar value for ‘farm biodiversity’ credits.
• Farmers need to adopt a forward-looking approach to land use, and with existing recommendations, native tree planting can be recognised and rewarded as a better choice over exotic monocultures.

Addressing these challenges will enable New Zealand to enhance and expand our existing biodiversity, promote farm resilience, access premium markets, and reward farmers as stewards of the land.