28th March 2023
As Jeremy Clarkson has found on his hit TV show, farmers can improve sustainability in ways that generate income.
Notoriously outspoken Jeremy Clarkson hasn’t always been a champion of measures to combat climate change. He once admitted to having “a disregard for the environment” and previously called campaigner Greta Thunberg a ‘spoilt brat’.
But viewers of his TV series, Clarkson’s Farm, have seen him mellowing on the topic as he experiments with sustainable practices such as planting crops to improve soil health, using natural predators to control pests, and reducing the use of synthetic fertilisers.
Meanwhile, the financial landscape has become dramatically more challenging for farmers. The phasing out of the Basic Payment Scheme (BPS), rising interest rates, very high energy prices and inflation in input costs are combining at a time when producers are under pressure from their customers to keep prices low.
The programme underlines how this hostile backdrop has a huge impact on the ability of rural businesses to turn a profit. In one episode, Clarkson is seen choosing crops based on how profitable they are – but there are other options that can generate income for farmers while being kinder to the environment. These broadly fall into two categories – those that attract Government funding or grants, and those driven by the markets as developers seek to offset the environmental impact of their activities.
A series of Government schemes are in place or on their way to reward farmers for actions that have a positive environmental impact. The Government’s new Environmental Land Management (ELM) scheme is a partial replacement for the Basic Payment Scheme, which is being phased out following the UK’s exit from the EU. The ELM scheme rewards farmers for sustainability measures, as do the Countryside Stewardship and the Sustainable Farming Incentive (SFI) schemes.
Farmers could receive up to a further £1,000 per year with the Sustainable Farming Incentive, for the first 50 hectares of farmland. This rewards actions on hedgerows, grassland, arable and horticultural land, pest management and nutrient management.
Farmers with a Countryside Stewardship agreement will see an average increase of 10% to their revenue payments, covering ongoing activity such as habitat management. The NFU also recently announced £168million in grants will be available to farmers as part of the Farming Innovation Programme (FIP) and Farming Investment Fund (FIF).
This encourages farmers to practice managing hedgerows for wildlife, planting nectar-rich wildflowers and managing crop pests without the use of insecticides.
Examples of sustainable activities that will be rewarded include:
1. Planting cover crops
A green technique for farmers is to keep ground covered with “cover crops” during times when it is not being used to grow harvestable crops. Cover cropping is the practice of planting certain crops as part of the crop rotation, purely for the purpose of improving soil structure and nutrients.
In the long run, this could lead to the potential for an increased number of harvestable crops, which of course could bring more money into the farm and help to reduce production costs.
Crop rotation can also help preserve nutrients in the soil and keep weeds under control. Grazing livestock on these areas also saves on the cost and environmental implications of using animal feed. The NFU has included this practice in its pillars in reaching net zero greenhouse gas emissions across the whole agricultural sector in England and Wales by 2040.
Integrated Pest Management (IPM) focuses on the long-term prevention of pests using biological controls (natural enemies, e.g., predators, pathogens), cultural controls (e.g., changing irrigation practices) and mechanical and physical controls (e.g., traps for rodents or mulches for weed management).
Practicing this can provide economic benefits to farmers due to increased productivity and reduced pest damage, while improving quality, health, and welfare of the environment.
3. No/min till
No tilling or minimum tilling farming can improve the health of soil by using a direct drill to plant crops instead of cultivation machinery. This reduces soil disturbance, helps to keep water and nutrients in the soil, reduces labour and fuel costs, and cuts greenhouse gas emissions from cultivation.
4. Watercourse buffers
Watercourse buffers protect water from agricultural run-off. They usually contain long grasses, trees and shrubs and trap and filter runoff to improve water quality of rivers by helping to prevent nutrients, sediments and pesticides from reaching them.
Farmers can receive grants to introduce these as part of the Sustainable Farming Incentive (see above).
It is important for farmers to take advice about whether these schemes are beneficial for them as there may be more lucrative opportunities through new and emerging private markets such as nutrient neutrality (see below) and biodiversity net gain.
Market-based environmental opportunities
New markets have recently been emerging for landowners to benefit from environmental improvement, schemes. These include:
1. Nutrient neutrality and water neutrality
Many important and sensitive habitats are considered to be in unfavourable condition due to pollution from excess nutrients, or water abstraction.
Excess nutrients are mainly considered to be the result of nearby sewage treatment works or certain agricultural activities (eg. intensive livestock operations, cultivation practices or the spreading of fertiliser. The pollution raises levels of nutrients like phosphorus and nitrogen, which can speed up the growth of algae in water – which harms wildlife and reduces quality of water.
Under the Habitats Regulations, and following recent case law, developers who want to build houses within the catchment of certain protected sites which are in unfavourable condition are required to demonstrate that the development is ‘nutrient neutral’– so the impacts of their development will not harm a protected site.
In practice it is very difficult for developers to mitigate any impact on-site, so they will likely need to consider off-site mitigation. This means farmers and rural landowners, who are in a position to change farming activities on their land or close down an intensive livestock enterprise, can provide that mitigation.
For example, if they have an intensive livestock business which generates a substantial volume of phosphates each year, it may be more profitable for a landowner to close down this farming operation and be paid for the mitigation instead. Alternatively, a landowner may consider constructing a wetland to help remove excess nutrients from watercourses on their land, and let the existing farm enterprises continue as normal.
In the case of water neutrality, recently, a local developer was able to rely on water infrastructure upgrades at a nearby dairy farm to mitigate the water consumption impacts on a protected site of a large residential development and obtain planning permission.
In addition, if the mitigation provided also frees up agricultural buildings, the landowner may then be able to exercise their permitted development rights to convert those buildings to houses (Class Q) or storage and distribution (Class R) for example.
To secure the mitigation, the local planning authority will require the landowner to enter into a legal agreement (often referred to as a s106 agreement) with their local planning authority.
2. Biodiversity Net Gain
This is a way to contribute to the recovery of nature while developing land. New planning rules, which will become mandatory across England later this year, means developers must demonstrate a 10% improvement in biodiversity after the development has been completed.
In some cases, developers will need to offset the impact of their activities by purchasing biodiversity credits from landowners who have registered their sites on the offsite biodiversity gain register. The biodiversity gain site register records biodiversity enhancement for registered off-site biodiversity gain. The core purpose of the register is to record allocations of off-site biodiversity gains to developments to make this information publicly available and prevent double counting.
Habitat created or enhanced after 30 January 2020 will be eligible for registration and sale of the associated biodiversity gains provided it meets the other criteria of the biodiversity gain site register.
Before registering a biodiversity gain site the landowner will need to carry out habitat enhancements under a conservation covenant or planning obligation which requires the maintenance of the enhancements for at least 30 years after the completion of those works.
The register will not act as a marketplace for biodiversity units, nor will it assess the ecological suitability or additionality of proposals. Natural England aims to open the register for new biodiversity gain sites by November 2023 and is expected to announce further details soon.
The Government has also announced recently that landowners will be able to ‘stack’ payments allowing the sale of both biodiversity units and nutrient neutrality credits from the same enhancement on the same parcel of land.
This now represents a potentially very lucrative opportunity for those landowners and farmers who are able to deliver nature-based interventions such as the creation or enhancement of a wetland or a woodland on the same parcel of land..
3. Suitable Alternative Natural Greenspace (SANG)
Suitable Alternative Natural Greenspace or SANG, are green spaces created for recreational purposes – a country park, for example. In order to offset the loss of a particular site as a result of development, developers can purchase agricultural land to be dedicated as SANG.
This has strengthened the value of agricultural land and means farmers who are considering sale, could sell at a high price.
4. Carbon offsetting
The process of capturing and storing carbon dioxide in soil is important for farmers to reduce their overall emissions and carbon farming is only now becoming more profitable for farmers thanks to funding schemes.
For example, the £50m Woodland Carbon Guarantee Scheme, introduced in 2019, pays landowners who create new woodland for the carbon credits they generate over a 35-year period.
5. Water company schemes
Water companies across the country operate various schemes that not only help to improve water quality but benefit the bottom line for farmers.
Anglian Water, for example, has an innovation grant that offers farmers £250,000 of funding to develop innovative solutions to tackle water quality challenges. It also offers a training grant and cover crops grant.
Southern Water runs a farm capital grant scheme as part of its Water for Live programme. Funding can cover up to 50% of the purchase cost, up to a maximum value of £10,000 and is targeted at reducing nitrate and pesticide risks to water quality.
6. Producing renewable energy
Farming is very energy-intensive, so finding ways to minimise the use of electricity from fossil fuels is one of the biggest changes farmers can make to reduce the carbon footprint of their activities.
This can be as simple as choosing an electricity provider that generates its power from renewable sources or growing crops (such as Maize) for a nearby anaerobic digester.
Farmers can make a much bigger difference by generating their own electricity on their land using photovoltaic (solar) panels or wind turbines and selling that electricity to the National Grid. However, the availability of a grid connection and the planning process can be very challenging issues to navigate and specialist advice will be vital.
The Thrings Agriculture team has been chosen by the NFU to act for its members in more counties than any other firm. Find out more about how we can support farmers, food producers and rural communities on our Information for Farmers page.