Unless you’ve been isolating under a rock of late, you will have heard the agricultural industry discussing the period of immense change the sector is set to undertake. A key aspect of the discussion surrounding UK agriculture's evolution is natural capital, the value attributed to our natural assets - our soils, trees, water, and ecosystems.
Building natural capital through sustainable practices can bring huge environmental benefits, such as improving biodiversity, water and air quality, sequestering carbon, and reducing greenhouse gases. Naturally, with 70% of UK land being farmed, farmers are in the middle of this debate - adding to the surmounting pressures this period of change is already bringing.
For the vast majority of UK farms, building natural capital requires land-use change - converting less productive farmland into natural assets through methods such as planting forestry, building wetlands, or restoring peatland.
Among the growing challenges faced by farmers, natural capital presents a real opportunity. As we know, area-based subsidy payments, on which so many UK farms depend, are on the way out - being replaced by the ELM Scheme.
This scheme is likely to help recuperate some of the loss from the subsidy shift, but for most, is unlikely to achieve anywhere near the same level of funding. The monetisation of natural capital is almost a certainty in the near future, whether it be through carbon credits, carbon offsetting, or some other form.
The recent report presented by the Green Alliance at the Oxford Farming Conference is an excellent summary of the likely impact of this policy implementation for British farms across differing soil, production types and economic situations.
We would summarise the practical steps farmers and advisers can take now as:
Figured lends itself well to this opportunity, with the ability to quickly and accurately assess the profitability of farm enterprises, and an array of planning tools to forecast future scenarios.
We’re already seeing UK farms and their advisers starting to plan for potential land-use changes for this very purpose. If you’d like to find out more about how Figured can help your farm or your client's farms, feel free to reach out for a chat.
This article originally appeared on cla.org.uk.