Farmers have urged the federal government to create a $1 billion biodiversity trust to help boost the value of their properties and create new income opportunities.
The National Farmers' Federation and KPMG will on Thursday release a report highlighting ways farmers could be rewarded for adopting more environmentally-friendly practices.
Among its recommendations are the establishment of a $1 billion National Biodiversity Conservation Trust, the implementation of a $30 million pilot Agricultural Stewardship Program and the development of a National Natural Capital Policy.
National Farmers' Federation president Fiona Simson said farmers played a critical role in caring for the environment, but better incentives were needed to ensure sustainable outcomes.
"Farmers have always been frontline stewards of Australia's environment, managing 51 per cent of our continent's landmass," she said.
"Unfortunately, efforts to incentivise and reward environmental practices historically have been short-term, or based on ad-hoc grants and programs.
"They have also been interfered with through complex and poorly understood regulatory requirements."
Mr Simson said the NFF's vision of $5 billion in farm gate income from environmental services could be achieved if appropriate policies were put in place.
"We need a comprehensive approach that delivers the right incentives, and the right outcomes for farmers and the environment," she said.
KMPG national food and agribusiness lead partner Robert Poole added that new financial instruments such as green bonds can provide investible agricultural options.
"These options provide a return for the community, environment, investors, farming sector and society at large," he said.