RFM considers sustainability as part of the management and operation of assets.
RFM manages a portfolio of Australian agricultural assets and the stewardship of these assets is of critical importance. RFM also recognises the importance of acknowledging the potential risks that climate change could present to assets. As part of RFM’s ongoing strategy to mitigate and improve climate related risks, RFM will continue to monitor emissions and seek to implement infrastructure and practice changes.
The case studies presented on the right-hand side of this page provide examples of initiatives RFM has undertaken in FY21 and FY22.
RFF leases require operators to use appropriate agricultural production methods. These include farm management methods to minimise environmental impact, protect biodiversity, manage water and sustain soil health. Wherever practical, the Responsible Entity as manager of the Fund promotes:
- monitoring industry developments and adopting farm management practices that incorporate the latest research findings and technologies to minimise environmental impact, protect biodiversity and better use natural resources,
- maximising water-use efficiency by using modern, well-managed irrigation systems,
- using water management practices that consider and manage water quality and minimise run-off,
- using communication technologies to access water-use data remotely; and, assisting with optimal water use, adoption of nutrient management practices that improve long-term soil health,
- ensuring pest and weed management requiring the use of chemicals occurs in a safe and environmentally responsible manner,
- considering lessees and personnel who understand and are focused on sustainable farming principles and adhere to environmental legislation and regulations.
RFM leases or operates some of the assets of RFF. During FY21, RFM updated its Environmental Policy including a commitment to seek to undertake activities, particularly farming activities, in a sustainable manner. This includes identifying ways to use natural resources more efficiently and minimise the impact our production systems have on the environment. A summary of some of the specific actions include:
- using nutrient management practices that improve long-term soil health, and avoiding over-grazing of pastures,
- seeking energy efficiency and undertaking renewable energy feasibility studies on appropriate assets,
- maximising water-use efficiency and minimising nutrient or effluent run-off,
- maintaining relevant sites to protect biodiversity,
- considering the impact of emissions and seeking to implement infrastructure and practice changes where appropriate,
- disposing of waste responsibly and using progressive farming practices to minimise environmental damage,
- taking all practical steps to adhere to the requirements of relevant environmental laws, regulations and standards.
Environmental case studies
Greenhouse Gases (GHG) reduction research and initiatives
Greenhouse Gases (GHG) reduction research and initiatives
During FY21, Rural Funds Management Limited (RFM) began research on multiple projects which seek to quantify and reduce GHG emissions. Research has focused primarily on methods which have been outlined by the Australian Government Clean Energy Regulator. These methods generally fall into two approaches; either reducing emissions that would normally be produced, or actively storing carbon in vegetation or soil. RFM began research during FY21 using the methods outlined below.
Beef herd management
During FY20, RFM, in conjunction with Meat and Livestock Australia (MLA), undertook an assessment of the emissions intensity of Mutton Hole, Rewan and Comanche and grazing land in New South Wales. Emissions intensity, rather than total emissions, is a metric used for assessing farming enterprises as it compares the GHG emissions generated per unit of farm product, such as kilograms of beef. Improved emissions intensity may be a result of higher farm production and a significant level of avoided emissions that would have otherwise been produced for the same level of output.
The report calculated that from 2016–17 to 2018–19 GHG emissions intensity declined by 17% on the New South Wales properties and 43% on the Queensland properties. The report identifies that improved feed quality and animal management are contributing factors to these results. A copy of the report is available on the MLA website.
Action: During FY21, RFM engaged with a research scientist to continue this project to provide recommendations on activities which further reduce GHG emissions.
Soil carbon sequestration
Soil carbon is a part of the organic matter in soil. Improving soil carbon sequestration involves managing agricultural land to encourage increases in soil carbon, such as through changes to farm management practices and converting land usage. The efficacy of these changes is determined through soil sampling, which establishes existing soil carbon levels, and changes over time.
Action: During FY22, RFM plans to engage an external consultant to assess baseline soil carbon levels on suitable properties and identify ways these may be increased.
During FY21, RFM began assessment of reforestation projects. Reforestation involves planting trees to reduce the amount of GHG entering the atmosphere, as carbon remains stored in the trees while they grow.
Action: During FY22, RFM plans to engage an external consultant to assess the application of tree planting on suitable properties.
During FY21, RFM began an assessment of an emissions flow study on a mature macadamia orchard. This study incorporates farm emissions from fuel, fertiliser use, and transportation of harvested macadamias to the processing facility.
Action: During FY22 RFM plans to engage an external contractor to establish baseline data so that future emissions reductions can be quantified.
Solar energy assessment
During FY21, Rural Funds Group (RFF) funded the installation of 26 solar-powered water pumps on its north Queensland cattle properties Mutton Hole, Oakland Park, and the Natal Aggregation.
Solar-powered water pumps use power from solar panels, pumping water from nearby water sources such as a dam or bore. These systems have replaced existing diesel-powered pumps, as well as being used in new installations.
The pumps provide a direct reduction in emissions, not only through reduced diesel usage, but also in the reduction of travel requirements for farm staff, as regular refueling of the pumps is no longer necessary.
Also during the year, RFM continued work with a major Australian energy company to complete a feasibility study for solar energy systems on almond orchards. These projects are ongoing and subject to lessee agreement.
Environmental impact assessment as part of macadamia developments
Environmental impact assessment as part of macadamia developments
During the planning stages of Rural Funds Group’s macadamia orchard developments, critical design principles that seek to minimise negative environmental impacts and optimise productivity are being considered by RFM.
- detailed soil surveys and assessment of topography data to allow for water drainage plans to be designed to increase the likelihood that water flows from rain events are manageable in terms of volumes and velocities of water, to minimise soil erosion,
- optimal layout of irrigation design, to provide operational efficiencies and reduced inputs, such as diesel consumption,
- precision tree planting and geo-referenced records, to enable the adoption of emerging low energy technologies including automation,
- high-specification dual irrigation systems, providing targeted tree irrigation to maximise water-use efficiency and minimise nutrient loss or leaching; and grassed inter-rows to assist with the prevention of solids being removed with water run-off.
Adjacent to orchard development sites, active preservation and improvement of waterways to protect flora and promote biodiversity, is also being planned.
Reducing herbicide application
Reducing herbicide application
Rural Funds Management Limited (RFM) is continually considering new innovations to improve agricultural practices and processes that improve productivity and benefit the environment.
In 2021, RFM undertook a trial of weed seeker technology on RFM’s cropping operations in central Queensland. The technology uses near infrared cameras to detect and treat weeds.
The total amount of herbicide used is reduced significantly as the sprayed area is substantially lower, spraying only weeds and not bare soil.
In the trial, weeds were treated in a fallow field, resulting in a material reduction of chemical application in the field area. This provided the benefits of a proportional reduction in chemical use and cost, as well as improved agronomic outcomes.
RFM considers its social responsibilities as part of the management of assets. The below outlines some of the key elements of RFM's social strategy.
People and safety
RFM’s guiding motto “Managing good assets with good people” emphasises that our people are core to our business. The motto defines our approach to the selection and management of our people who are experienced and dedicated, and diligently support the RFM group. Our employees follow our Code of Conduct which promotes being respectful, being precise and diligent when doing our work, being honest, ethical, and doing what is best for the RFM group.
In return, we value, respect, and reward the contribution of our employees. We recognise employee contribution by providing:
- training and development opportunities,
- non-financial benefits such as life and salary continuance insurance,
- financial rewards by way of competitive remuneration and bonuses,
- support for the well-being of our employees and their families through our Employee Assistance Program, flexible work practices, paid maternity leave and paid domestic violence leave.
An important element of our current work is an increased value on a culture of precision in our workplaces. Doing precise work provides many benefits, most importantly, it achieves a safer workplace.
During the year RFM has reviewed many policies, including the Safety Management System (SMS) and Safe Operating Procedures (SOPs). RFM also implemented an online safety system for the delivery of this information, providing easy access to key documentation that educates and supports activities on the ground.
RFF lessees are also required to comply with safety and environmental obligations, and these are included in our leases. We have reviewed and strengthened our engagement processes and management of contractors, many of whom work on RFF properties undertaking development activities.
Contractors have access to the online safety system to make key induction and safety information and collect key documentation easily available to them. The streamlining of the SMS includes guidance for our people about consulting with managers and monitoring contractors on the ground.
RFM recognises there is gender and cultural disparity in the industry in which we operate. The organisation is taking steps to remove unconscious bias from recruitment processes by using anonymised screening and providing opportunities for minority groups. We do not set specific diversity targets, but seek to ensure the candidate pool at each stage of the recruitment process reflects the diversity mix of total applications received.
Some of the properties managed by RFM are leased to agricultural producers involved in intensive production, such as cattle feedlots. RFM has policies and procedures that are explicit about animal treatment and welfare. Cattle lessees are also required to comply with best husbandry and pastoral practice. This is stipulated in leases signed with RFF. Best practice includes low-stress handling, disease minimisation and sustainable stocking rates. Most cattle sold by RFF lessees are sold and processed domestically, but a small number may be sold to the live export market.
An integral part of our corporate culture is to donate to charities and causes that are close to the hearts of our employees, including in the communities in which we operate or can have a positive impact. RFM continues to provide support to Tahen, a village in the Battambang province of Cambodia. An overview of this project is included in the adjacent case study.
In the past RFM has also supported a number of organisations through donations and labour.
Social case studies
Low stress cattle handling
Low stress cattle handling
Rural Funds Management Limited (RFM) has policies and procedures for its operated properties that ensure mustering staff have the appropriate experience and training. The aim of each muster is to move the cattle in a controlled way, minimising the stress placed on the cattle, and reducing the risk of injury.
A range of techniques are used, such as:
- ensuring cattle are moved at a controlled pace,
- where possible walking cattle in the cooler parts of the day; and
- regularly resting cattle at water points.
Staff use the most appropriate method for the situation to achieve the best outcome for animal welfare.
An integral part of our corporate culture is to donate to charities and causes that are close to the hearts of our employees, including in the communities in which we operate.
Applying RFM’s agricultural expertise in Cambodia
In May 2019, RFM committed to providing resources to establish an agricultural project in the Cambodian village of Tahen in the Battambang prefecture of western Cambodia (approximately 350km north west of the capital Phnom Penh). RFM’s commitment includes the provision of both agricultural expertise and financial resources to improve farming practices in the village.
Battambang is known as the rice bowl of Cambodia, and agriculture is the main industry in Tahen. The village is also home to a boarding school that provides lodging, food, and education for around 120 children, some of whom are orphaned. The agricultural nature of the village, together with the location of the boarding school, make this village an ideal site to benefit from RFM’s agricultural expertise.
The need to fund education and mentoring services here is very high. The standard of education is slowly improving; however, the country is still affected by the devastating impacts of the Khmer Rouge regime and the mass genocide of the country's citizens between 1975 and 1979.
The agricultural project is being implemented in conjunction with Catholic Mission, which has a permanent presence in the Battambang prefecture. Catholic Mission manages several projects designed to improve the standard of living of each community where it operates, with a focus on social engagement and employment opportunities. The common underlying aim of each project is to become self-sufficient after a period of external funding, and consequently deliver a permanent, sustainable improvement to the lives of those involved.
The aim of the Tahen project is to educate local farmers to develop sustainable and diversified agricultural enterprises, and RFM has committed to providing A$1 million over three years, as well as ongoing advice and support to achieve this aim.
Improving rice production – Tahen’s main staple
Rice is the main crop grown in Tahen. One of the key objectives of the project is to increase production by improving farming practices. It is critical to the success of the project that local farmers permanently adopt the updated farming practices and to assist with this aim, some fields are being farmed under the traditional practices, with adjoining fields being farmed with updated practices. This simple, visual comparison generates clear evidence of how updating practices can provide positive outcomes for the village. RFM is directing funds to employ a full-time agricultural engineer, as well as provide access to expertise from a locally based agronomic consultancy firm comprised of two experienced Australian agronomists who are overseeing the rollout of updated farming practices.
RFM’s funding has also enabled structural changes to farming operations, such as farming co-operatively in larger areas rather than operating small individual blocks. The aim is to increase the number of rice crops grown each year and thus the amount of rice produced.
RFM has funded new equipment to assist with the planting and maintenance of rice and other crops. Machine planting has already reduced the seeding rate from 120 kg/ha to 80 kg/ha and the crop is also benefiting from the mechanised application of herbicide and fertiliser. These strategies aim to increase the yield from 1.5 t/ha to 5.0 t/ha.
Other agricultural and community impacts
Previously unutilised land has been planted to forage crops, attracting significant local interest. These crops will be consumed by newly purchased cattle via a cut and carry system. An additional area has now also been planted to legumes, similar to those planted on RFM’s Queensland cattle properties, to increase carrying capacity and weight gain.
Other agricultural operational improvements are planned to benefit existing banana and mango production.
RFM’s management team receive a monthly report outlining project developments and budget reporting enabling RFM to maintain an ongoing and active involvement in the project. By providing education, mentoring, expertise and funding, it is hoped that RFM can provide sustainable economic and social benefits to the community. Opportunities are now arising for locals to provide services, such as laser levelling, to the farm.
Although the structure and funding of this project is designed specifically for the Tahen village, RFM hopes that the lessons of this project can also be applied to other communities.
RFM looks forward to providing ongoing updates to our investors on the key achievements of this exciting project.
Rural Funds Group (ASX: RFF) is Australia’s first ASX listed diversified agricultural Real Estate Investment Trust (REIT).
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