In recent years the Government has put increasing effort into environmental measures, with agricultural policy focused not just on food production but on delivering environmental benefit with ‘public money for public goods’. The Environment Bill became an Act on the 10th November 2021. This created a range of powers aiming to assist the Government in meeting its long-term, legally-binding environmental targets to improve air and water quality, protect wildlife, increase waste recycling and reduce plastics.
Whilst it is important to retain the most productive agricultural land in food production, the conversion of agricultural land for community and environmental benefits, particularly on poor quality land allows for a wide variety of ecosystem services based on Natural Capital. Land may be used to deliver on a wide range of policy objectives and climate pledges.
The ‘natural capital’ of a holding now includes a range of potential income sources from carbon, sequestered from soil, woodland and peatland to the enhancement or creation of new habitat (of interest to developers who must now contribute to a 10% net gain on biodiversity on developments).
The Government envisage a situation where public and private sector work together to establish a market for these ‘environmental goods’/services and push each other to improve the environment whilst still being able to complete projects necessary to society.
The pledge of being ‘net zero’ by 2050 may require the agricultural industry to have their emissions measured and to offset their carbon footprint to reach net-zero status. Many supermarkets may also require produce to be net zero going forward, for example Morrisons have stated “by 2030 we aim to be supplied by ‘Net Zero’ carbon British farms as a whole” with others expected to follow. As such, it is important to consider the need to offset the farm’s own carbon footprint before deciding to sell carbon and other environmental credits on the open market.
Along with the Agriculture Act 2020, the Environment Act will affect the agriculture sector both directly and indirectly in several significant ways.
- Removal of direct payment subsidy BPS for Environmental Land Management’s ‘public money for public goods’,
- The creation of a market for environmental credits: carbon, biodiversity, and nitrate offsets,
- Projects involving combined environmental services on land,
- Local vs imported food: accounting for the whole supply chain when considering the carbon footprint of one’s food.
The phasing out of BPS leaves a gap in many farms budget and alternative revenue streams must be explored. The ELM scheme replaces it to an extent but is unlikely to completely fill the hole. However, the actions it pays participants to achieve may contribute to other avenues that a canny farmer would look to add to the overall farming operation.
Many of these opportunities may interlink to produce multiple positive outcomes. Whilst it is important to be aware of ‘double-counting’, the actions of some projects will produce several income streams, for example converting land out of agriculture will lower nitrogen output for nitrate offsets, if woodland were planted appropriately, it could also assist in flood management schemes, sequester carbon, and increase biodiversity. Some of these actions may be sponsored by government grants and schemes others by private sector companies interested in providing social value, giving back to the wider community, or simply offsetting their own footprint. There are an increasing number of additional services that people are willing to pay for and these new “markets” should be considered by anyone looking to increase the options of what they can do with their land.
The trading of Water Abstraction Licences links intrinsically into the water quality of our rivers and waterways. This market is well developed and is increasingly being encouraged by the Environmental Agency. See here for more details.
Another consideration is the awareness the public now have for carbon footprint in the food supply chain. We have seen from COP 26 how the carbon footprint of a locally produced bacon butty can be less than a croissant. This could well lead to a preference for our homegrown sustainably produced food that hasn’t travelled halfway around the world travelled, plus the increased importing costs following Brexit could well increase food prices in favour of home grown, more sustainable food. If food prices increase in favour of UK based farmers, then combined with the emerging markets for environmental credits, then life after BPS may be much more positive than previously feared.
What we can do for you:
- Natural Capital Surveys
- Whole Farm Survey
- Sustainable Farming Survey
- Environmental Land Management planning
- Woodland Planting Survey
- Woodland Budget Planning
- Nitrate Budget Calculations
- Biodiversity Metric 3.0 calculations
- Nitrate Vulnerable Zone Regulations Compliance
- Ecological Surveys