Australian consumers are demanding more sustainability from the agricultural sector, according to a major report by financial group PwC.
The analysis found that while farmgate output is on track to hit $100 billion by 2030, expectations are growing around transparency for traceability and production as well as supply chain footprints.
The "measuring for success" report provides 21 recommendations, which include the need for producers to generate data to measure and manage their natural capital.
Agricultural natural capital includes soil, water, pasturelands and croplands, riparian areas, remnant native vegetation, agroforestry and environmental plantings and animals.
"The key is to focus on verifying outcomes," said Jeremy Thorpe from PwC.
He said it's consumers who are driving change.
"Younger consumers particularly we see are changing their spending patterns and their demands," Mr Thorpe told AAP.
"We're already seeing multinationals ... demonstrably showing that they're more sustainable."
The report found "farm-scale data will be critical for producers to realise the economic gains from demonstrating the provenance and sustainability of their produce".
Among the recommendations is a call to set up a national verification scheme for sustainable agriculture that is cost effective.
Mr Thorpe said Europe is leading the way in the field, and Australia will be left behind if it doesn't keep in step.
"Policymakers and producers from overseas all emphasise that this is the direction they're heading ... making sure that agricultural products are not just sustainable but proven to be sustainable," he said.
The report cites examples of requirements set by the European Union which have invoked change by Australian producers, including canola exporters adjusting their use of the chemical omethoate to meet EU standards.
Mr Thorpe warned farmers need a better way to measure sustainability.
"Farmers need to be able to measure their behaviours so they can demonstrate it," he told AAP.
"It's not just a farmer that needs to demonstrate the food is sustainable, that the fibres are sustainable, it's an entire supply chain.
"The key issue is being able to have a common definition for farmers to know what they need to be able to achieve so they can tell consumers that it is sustainable."
The report was commissioned by Farming for the Future, which is a research arm of the philanthropic group Macdoch Foundation.
Farming for the future's Sue Ogilvy said a consumer driven trend has emerged demanding improvements around the environmental performance of agriculture.
"The overarching message is that pressure on agriculture to improve environmental performance is real and is increasing," Dr Ogilvy said.
"We also want to make sure that when we look at these pressures for improved environmental performance, that we understand that farmers need to be equipped to respond to that."
She said the report will help to inform government and industry.
"The key issue is being able to have a common definition for farmers to know what they need to be able to achieve so they can tell consumers that it is sustainable."
Australian Associated Press
