Researchers found if a farmer invested in dam renovations like fencing, revegetation and strategies to limit stock access, there was more than a 70 per cent chance they would see a cost benefit from stock weight gain.
The average per-farm Benefit-Cost Ratios based on deterministic assumptions was 1.5 for New South Wales (NSW) and 3.0 for Victoria in areas where rainfall exceeds 600mm annually.
Researchers' analyses suggested cattle on farms in NSW and Victoria would need to experience additional weight gain from switching to clean water of at least 6.5 per cent and 1.8 per cent per annum respectively, to break even in present value terms.
Researchers recommended localised experiments to assess the impact of improved water quality on livestock weight gain in Australian conditions, to confirm these expectations empirically.
The researchers say incentive schemes for these kinds of projects could benefit both farmers and biodiversity.
• The study was part of the Sustainable Farms initiative at The Australian National University. Funding for the work was provided by grants from the Australian Department of Agriculture, Water and Environment, the Ian Potter Foundation, and the William Buckland Foundation.