Modern agriculture has achieved remarkable productivity, producing enough food and fibre to support a global population of more than eight billion people. But that success has come with mounting pressure on land, water and nutrients.
Agriculture today accounts for about 50 per cent of global land use, 73 per cent of deforestation, 70 per cent of water use and roughly one-third of greenhouse gas emissions. Intensive cropping and grazing practices have also contributed to soil degradation and nutrient losses.
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Circular agriculture has emerged as a solution, transforming what was once considered waste into valuable inputs.
Across Australia, food producers are already putting these principles into practice: turning crop residues into compost, integrating livestock and cropping systems and capturing energy from waste.
Here, we explore how circular farming is unlocking new value from the resources already in the farming system — improving productivity, strengthening resilience and future-proofing agriculture for a changing climate.
What is the circular economy?
A circular economy is a system of production and consumption designed to keep materials, nutrients and energy in use for as long as possible, in contrast to the traditional linear “take-make-waste” model that depletes natural resources.
Globally, the adoption of circular practices has fallen steadily since 2018 when uptake was first measured, meaning that we’re consuming more new materials than ever.
But in Australia, the Circular Economy Ministerial Advisory Group, the National Waste Policy Action Plan and the Bioenergy Roadmap are seeking to reverse that trend, recognising the important role agriculture can play in achieving a circular future.
What is circular agriculture or circular farming?
Circular agriculture applies the principles of the circular economy directly to farming systems. It seeks to minimise reliance on external inputs, close nutrient loops, regenerate soils and reduce environmental impact, all while supporting productivity and resilience.
Circular agriculture aligns with regenerative agriculture, with both approaches prioritising soil health, nutrient cycling and landscape resilience. Circularity adds a systems-level perspective, connecting what’s happening on the farm to broader environmental and economic outcomes across communities and societies.
Benefits of circular farming
Reduced waste and pollution
Agriculture generates large amounts of organic waste (crop residues, manure, processing by-products and product losses) that can become a source of greenhouse gasses and nutrient run-off if left unmanaged. In Australia, organic waste in landfill generates 13 million tonnes of CO₂-equivalent a year, about 2.5 per cent of the nation’s total emissions.
Circular farming intercepts these nutrient flows, returning biological material to the soil through practices like composting or biofertiliser. This not only helps to mitigate emissions, but reduces the nutrient leaching and chemical run-off into waterways that can be associated with synthetic input use.
Increased input efficiency
Circular systems focus on using what’s already available. By recycling nutrients and water within the farm system, producers reduce dependency on synthetic fertilisers, supplementary feed and fresh water. This lowers operating costs and buffers against input price volatility.
For example, mixed enterprises that reintegrate livestock with cropping can recover nutrients through manure and urine reuse — a closed-loop solution that reduces reliance on synthetic soil amendments to stimulate biological activity and plant growth.
Healthy, productive soils
Healthy soil underpins the circular farming model. Returning organic matter to the soil restores microbial diversity, enhances water-holding capacity and builds soil organic carbon: the foundation of productivity.
In circular practices like regenerative agriculture, soil is treated as a living asset that stores value, sequesters carbon and enhances resilience. Over time, that translates into more stable yields, better water efficiency and reductions in synthetic input use.
Regional resilience and economy
Circularity extends beyond the farm gate. By linking producers, processors and energy systems, circular models can create local bioeconomies: regional networks where waste from one sector becomes the raw material for another. This unlocks new revenue streams (such as biofertiliser production or renewable energy), supports rural employment and strengthens regional energy security, all while decarbonising the agricultural supply chain.
Circular farming in practice
On farm, circularity isn’t about starting from scratch with new production systems. It’s about rethinking how resources flow and where they can be repurposed.
Common circular farming strategies include:
Turning organic waste into valuable inputs: crop residues, animal manures and processing by-products are composted or processed into biofertilisers, returning nutrients to the soil and reducing the need for synthetic fertilisers.
UK start-up LyteGro uses the pulp of waste bananas to produce BacLyte, an organic extract that improves the growth and metabolism of bacterial and yeast species used in industrial processes.
Generating renewable energy from farm by-products: manure, crop residues, or food-processing waste can be converted into biogas or green hydrogen, cutting emissions while lowering energy costs on-farm.
Australian start-up HydGene Renewables uses agricultural residues like straw to generate green hydrogen and fertilisers on-farm.
Integrating production systems: combining livestock and cropping operations allows nutrients from animal waste to enrich plant growth, while precision irrigation and water recycling reduce consumption and improve efficiency.
Australian start-up EcoSystem Farms has developed a soil-less farming platform that integrates plants and fish in a closed loop system where the fish provide the nutrients for plants and plants clean the water for the fish.
Creating regional resource-sharing networks: agribusinesses can exchange by-products or organic materials, for example, using food processing by-products as animal feed, or crop residues as feedstock for insect farming, turning potential waste into economic and environmental value.
Australian start-up Goterra’s modular waste management systems use insects to process food and organic waste, converting it to sustainable protein and fertiliser.
Why circular farming matters for the future
More than a sustainability concept, circular farming is a strategy for resilience. By regenerating soils, reusing nutrients and reducing waste, agrifood producers can strengthen productivity while building long-term resilience to climate and input pressures.