Historically considered as competing with productive farmland, planting trees on livestock farms can be a sound financial investment for farmers. According to Farming for the Future (FFTF), a research and change program initiated by the Macdoch Foundation, planting trees next to areas of production may increase annual profits. Wooded areas can help farmers achieve higher yields, reduce costs, and become more resilient to a changing environment.

For more than 30 years, John and Nicole Hopkins have been planting trees as part of their strategy for protecting soil, water, biodiversity and vegetation – known as their farm’s natural capital. Their 1,040-hectare property near Illabo in the Riverina region of New South Wales, is home to their Simmental cattle stud farm, where they also produce lambs, wool, dryland cereals and oilseeds.

“Three years after my family purchased this property in 1987, it was burnt out completely in a bushfire,” says John. “We put the fences back in exactly the same places on the assumption that the previous owners knew best, but in the hours I spent sitting on a tractor, I started to notice things like different soil types and just how windswept and bare our flatter areas were. That was when we got the idea of planting trees.”

“In the hours I spent sitting on a tractor, I started to notice things like different soil types and just how windswept and bare our flatter areas were. That was when we got the idea of planting trees.”
- John Hopkins

Rebuilding after a second bushfire

John and Nicole had planted a considerable number of trees by 2006, but another catastrophic bushfire ripped through their property.

“We lost most of the trees and all of the understories such as bottle brushes and wattles,” says John. “Only the eucalypts managed to survive. It was devastating.”

The one bit of good news was that the couple now had a clean slate to work with in planning how to manage their land.

“We relocated fences and planted extensive areas with native trees and shrubs, always taking into account natural factors such as wind direction and water flow,” says John. “We changed the direction of paddocks and fenced creeks so our waterways could regenerate without livestock disturbance.”

“We relocated fences and planted extensive areas with native trees and shrubs, always taking into account natural factors such as wind direction and water flow.”
- John Hopkins

How does planting trees impact property productivity?

As part of its commitment to helping customers protect their natural capital, CommBank funded FFTF’s research into the economic benefits of trees on farms. This included in-depth analysis that will allow farmers to estimate the impact that planting trees on their livestock property in southern Australia could have on their profits.

“We found that the value of trees is multilayered and vast,” says Carmel Onions, Executive Manager, Agribusiness Sustainability, CommBank. “For example, by providing protection for vulnerable newborn livestock, mortality rates can be reduced. Protection from chill and winds promotes weight gain and can reduce the animal’s methane emissions over its lifespan. When trees are planted as a belt or line around paddocks, they provide year-round protection from hot and cold winds, rain and chill. The shade they provide reduces heat stress which is another source of lost productivity. Rather than losing weight in hot weather, stock may maintain condition or continue to grow.” 

“We found that the value of trees is multilayered and vast. For example, by providing protection for vulnerable newborn livestock, mortality rates are reduced. Protection from chill and winds promotes weight gain and can reduce the animal’s methane emissions over its lifespan.”
- Carmel Onions, Executive Manager, Agribusiness Sustainability, CommBank

It’s also worth noting that this value lies not only in planting new trees. “It is also imperative that we protect and cherish our old existing trees and standing dead ones,” adds John.

Trees can filter waterways and help protect against soil erosion, particularly in flood situations.  Trees also provide habitats for birds and insects, and because many of these feed on pests, they can reduce the amount farmers spend on pesticides.

“Trees can also capture and store carbon dioxide,” says Carmel. “Farmers who sequester carbon by planting trees may be able to benefit from carbon credits.”

Farmers can obtain carbon credits from carbon-sequestering practices like tree planting, no-till farming, cover cropping, or agroforestry, which stores carbon in the soil. This carbon is measured and verified by third parties, generating a certificate for each ton of CO2 removed or avoided. Farmers then sell these credits in a carbon market to companies or individuals who need to offset their own emissions, creating a new income stream while promoting environmental health.

“CommBank has a range of solutions to help customers finance arrangements with a registered carbon project, both before and after they’re earning carbon-credit income,” says Carmel.

“Farmers who sequester carbon by planting trees may be able to benefit financially from carbon credits. CommBank has a range of solutions to help customers finance arrangements with a registered carbon project.”
- Carmel Onions, Executive Manager, Agribusiness Sustainability, CommBank

Along with the increased profit per hectare (on average more than $20 per hectare¹), the FFTF research found that farms with more substantial natural capital achieved higher productivity, especially in areas with lower land capability. Farms with actively managed vegetation and better soil conditions were also more consistently productive, experiencing less decline during containment and dry seasons. Overall, the research suggests that improving natural capital across the sector could deliver a 2.5% productivity gain, generating an estimated $3 billion in annual benefits to farmers, while also doubling the habitat for 70% of bird species and more than 800 native plants¹.

“Building resilience is about proactively preparing for dry times and every year we find we’re doing it a bit better,” says John. “For us, it means investing in things like drought lots, putting away fodder reserves and managing our livestock so that we can maintain ground cover. One of the most important things I’ve learnt is to act quickly.”

A less-obvious benefit is the positive effect trees can have on farmers’ mental wellbeing.

“For nature lovers like us, trees create a wonderful environment to work in every day,” says John. “We’re attracting birds we’ve never seen before – the superb parrots are coming back in droves and there’s quite a flock of whistling kites. We also saw our first glider last year, which was really exciting.”

“For nature lovers like us, trees create a wonderful environment to work in every day.”
- John Hopkins

What financial solutions are available for sustainable farming?

As the benefits of sustainable farming continue to be articulated, there are more opportunities for financial institutions to support producers with things like integrating nature into production. 

“CommBank was the first Australian bank to launch an Agri Green Loan for farmers,” says Carmel. “This supports farmers who want to invest in planting trees or other projects with valuable environmental outcomes. Governments and not-for-profit organisations are playing a role by providing grants, education and other incentive programs. Supply chains are also increasingly playing a role by finding ways to support and encourage farmers who are investing in protecting natural capital as they produce our food.”

“CommBank was the first Australian bank to launch an Agri Green Loan for farmers. This supports farmers who want to invest in planting trees or other projects with valuable environmental outcomes.” 
- Carmel Onions, Executive Manager, Agribusiness Sustainability, CommBank

Measuring the impact of trees on farms

As active Landcare Australia members and advocates for sustainable farming, John and Nicole believe the findings will help them spread the word. 

“We’re really excited by the research and its findings,” says John. “I can chat my head off to my neighbours and visitors about the huge benefits and gains we’ve seen, but I’ve never been able to put a figure on it”

Now that's possible. The research shows these improvements can be worth as much as $100 per hectare each year¹, depending on region and farm type.

“It’s wonderful that we now have evidence to support our claims,” continues John. “Research is vital to the future of agriculture and we commend CommBank for getting on board.”

With growing financial support and tangible results from those leading the charge, the future of farming is shifting towards a more sustainable and economically resilient model. One that hopes to benefit both farmers and the ecosystems they depend on.