Changing how livestock are bred and fed and vaccinating them to reduce methane production are among the proposals in an EY report commissioned by Farmers for Climate Action.

It recommends shifting to renewable energy and electric-powered machinery, re-foresting less productive land and restoring degraded farmland so CO2 can be better sequestered in soil.

Compared to a business-as-usual trajectory, the report predicts the $67 billion-a-year agriculture sector can cut emissions by 40 per cent by 2030, 65 per cent five years later and achieve net zero within two decades.

Farmers for Climate Action believes the changes will boost farm productivity and profits by scaling up initiatives, including around land use and management, already under way.

"Farming families should be able to diversify to use their land to grow profitable, productive carbon and biodiversity crops which provide them rare drought-proof payments when and where they choose," the group's chief executive Fiona Davis said.

Methane produced through livestock digestive processes accounts for a significant source of on-farm emissions.

Feed supplements, including a seaweed additive, have the potential to reduce this, as does selective breeding of sheep and cattle.

The report also points to work on a vaccine to influence methane-producing microbes in livestock.

It touts the potential for electricity to power tractors and heavy machinery as well as a shift to renewable energy used farms.

A case study looking at the southern Queensland region of Maranoa models how ramping up carbon abatement could increase revenue by up to $2.4 billion and create between 14,000 and 17,000 extra jobs over a decade.

The report also urges the sector to look beyond net zero by 2040 so it can amass and sell carbon credits to other sectors seeking to decarbonise.

"The carbon offset surplus past net zero is a value bank. The speed at which the industry can achieve net zero will help determine the value that farmers can access," it said.

The agriculture sector accounted for nearly 15 per cent of Australia's emissions last year, equating to around 70 million tonnes of CO2 equivalent.

Australian Associated Press