After more than a decade of tinkering with the concept and its design, Martin Royds has had five moated dams constructed on his farm, Jillamatong.

While they're still filling up with water, the idea is to catch fertile silt in the moats, which contain water plants and act as a filter for water flowing into the dam.

The moats prevent the silt from sitting inert in the middle of the dams, meaning it can instead be used to grow water plants that can be harvested and used as feed for stock during droughts.

Mr Royds said trapping sediment outside the dam and having water plants like phragmites and cumpungi around the edge reduced evaporation, keeping the dam more full while also keeping the water clear, oxygenated and more inviting for stock.

"These moated dams will only cost a few hundred dollars, but you’re going to get a few thousand dollars in benefits," he said.

"You’re catching your sediment, which leads to reducing the evaporation, increasing the water quality and utilising that sediment instead of letting it sit in the dam for 10 years doing nothing.

"You’re also saving having to go in there and clean the dam out every 10 years, which can cost $500 to $1000, you’ve got the plants you can harvest and you’ve got clean water.

"This way the mud’s outside the dam, so [the animals] won’t get bogged in it and they can come in and get the clean water."

Mr Royds takes a holistic management approach to his 457-hectare farm, where he has not sprayed chemicals for nearly 30 years.

He tries to work with the land rather than against it, and while his more traditional farm dams are dry or close to it because of the drought, the new moated dams have started filling up.

He also has 14 weirs – which he describes as "a $10,000 plug" in the four-metre deep erosion gully that runs through his farm – that remain full of water.

"On the same sort of day that I’ve had here where we’ve lost two centimetres of water off a muddy dam, it’s two millimetres off a clear [moated] dam," Mr Royds said.

An analysis of Jillamatong conducted by Soils for Life last year showed an average yearly profit before interest and tax of $112,258 between 2004-05 and 2013-14.

The analysis showed Mr Royds' profits during the 10-year period were an average 230 per cent higher than the 146 farms in south-east Australia that took part in the Holmes and Sackett benchmarking program. His expenses were just 40 per cent of the average farm's.

Even with his innovative methods, the drought has taken its toll on Mr Royds' farm, where he would usually run 300 cattle.

That number got down as low as 30 last year.

"I had 30 out on agistment, too, and they’ve come back, so I’m up to 60 breeders," he said.

"And I’ve got 60 heifers, so we’re still well under normal carrying capacity."

While recent rain has provided some relief for farmers in the Canberra region, Mr Royds said a few hail storms had caused some damage and left him with some bare ground that had attracted grasshoppers.

But he hopes holistic management techniques like the moated dams will continue to keep his farm ready to withstand the impacts of drought.

"It's another positive process," he said.