Subsidies under the UK’s post-Brexit sustainable farming scheme will be bolstered from this year, while premium payments will also be available for certain high priority action areas, in a bid to encourage more farmers to access the scheme.
Payments for actions made under the Sustainable Farming Incentive (SFI) and Countryside Stewardship (CS) will be increased on average by 10%, with both current and new recipients set to benefit, announced the UK Department for Environment, Food and Rural Affairs (Defra) at the Oxford Farming Conference 2024 (OFC24) last week.
The development comes in the same month as the new mandated Biodiversity Net Gain (BNG) requirements are expected to come into play for developers in England, who will need to ensure a 10% improvement in biodiversity on the sites they develop or to purchase BNG credits equivalent to that impact from land elsewhere – opening up a big opportunity for England’s farming sector to earn BNG credit revenue.
BNG was slated to become mandatory last year, but its three-month delay until Jan. 2024 triggered concern from market actors, who are keenly watching the progression of the law as it could set a global standard for government nature requirements, while creating a market for biodiversity credits that developers have to buy off-site as a ‘last resort’.
The SFI and CS form part of the UK government’s Environmental Land Management schemes (ELMs) that are being rolled out as a replacement to payments provided under the EU’s Common Agricultural Policy, with those payments set to reduce annually from 2021 through 2027.
The SFI pays farmers for carrying out food production in a more environmentally sustainable way and is made up of standards including improved grassland and hedgerows, while the CS offers compensation for environmental work carried out alongside food production, such as restoring wildlife habitat or mitigating flood risk.
IMPROVED ATTRACTION
With just 8,000 farmers having applied last year to the SFI, far below the 82,000 eligible, the changes are intended to improve the attraction of these schemes to agricultural businesses already battling high costs of inflation and low returns.
At OFC24, Environment Secretary Steve Barclay said that the government had “listened to farmers’ feedback and set out the biggest upgrades to our farming schemes since leaving the EU, with more money, more choice, and more trust to support domestic food production whilst also protecting the environment”.
In addition, the government also launched premium payments for actions that do the most to protect the environment and a streamlined application process to encourage more land managers to get onboard.
Some 21 high priority action areas will be eligible for premium payments in 2024 across the themes of arable, lowland heath, lowland peat, agroforestry, grassland, moorland, water, and species, as detailed below.
Source: Defra. Compiled by Ends Report.
As ELMs develop and the market for BNG credits expands, farmers will have to decide which payment opportunity to monetise for which land management context.
Farmers will be able to make use of both schemes for the environmental improvement work they do on their land as long as the same outcomes are not double counted, and effectively paid for by both ELMs and BNG, it is generally understood.
However, there is a lack of clarity surrounding how the different schemes may interact, with Townsend Chartered Surveyors claiming that “the by-product of one scheme may be sold separately to the initial action e.g. creating woodland for biodiversity then selling the carbon sequestered as credits”.
This would “make use of all revenue streams available” and encourage more landowners to take part, Townsend says.
Demand for BNG units from UK farms is already starting to ramp up, with one English farm – the Iford Estate farm in the South Downs National Park – having already confirmed sales for most of its 211 BNG units over 32 hectares of grass and scrubland, according to the estate.
The estate plans to expand its BNG programme to 3,000 units and over 800 ha in total, and originally started the process of developing the credits back in 2020.
Most local authorities in the Sussex area are already looking for building developments to show overall biodiversity improvements, the estate manager told Carbon Pulse.
SOME CRITIQUE
Though the UK BNG framework has been broadly welcomed by ecologists, some have expressed concern about the lack of opportunity for public consultation on the BNG plan, seeing as the draft BNG plan states that net gain would be a post-planning permission matter, with just the biodiversity baseline submitted in the initial application.
Uptake of the BNG scheme is likely to vary nationwide depending on the implementation speed of local authorities.
It is hoped that environmental payment schemes such as ELMs and BNG will help farmers to offset record production costs, from feed to energy to labour, while delivering environmental improvements in line with the government’s 25-year Environment Plan.
By Bryony Collins – bryony@carbon-pulse.com
