New opportunities for environmental payments

With the Basic Payment Scheme being phased out, many farmers are looking for alternative income sources. A blend of payments for environmental work from the private and public sectors may therefore be appealing, says Gary Rumbold.  

Companies looking at their corporate social responsibility are beginning to offer to buy carbon and biodiversity credits from farmers, or to invest in tree planting schemes and similar. “Developers are starting to pay for biodiversity net gain through projects such as the creation and maintenance of ponds for great crested newts, as a way of mitigating against habitat loss elsewhere.”

Water companies are paying farmers for various measures including cover crops and natural flood management, but these are very localised opportunities, he explains. “They have commitments and duties to meet water quality standards, so working with farmers in drinking water catchments can be a win-win for both water companies and farmers alike.”

“With the environmental land management schemes also in the picture, soon there will be a mixture of private and public funds for this work over the next 10 to 20 years. Some aspects of the private market are very much in their infancy. I expect it will be much more regulated in the future, but we are not there yet.”

Carbon codes & commitments

FWAG South West is currently leading a consortium of organisations developing a UK Farm Soil Carbon Code. Funded by Defra’s Natural Environment Investment Readiness Fund (NEIRF), the resulting code will include a set of formal protocols. This will allow farmers to quantify and verify reduced greenhouse gas emissions and/or soil carbon capture as a result of adopting regenerative farming practices. It will be applicable for different ‘carbon accounting’ purposes, whether carbon capture converts to income or not.

Other organisations and groups are doing the same for carbon accounting standards in areas such as hedgerows. “A lot of money is being invested by Defra to see how these markets can come to fruition. It is very exciting, but I would urge caution, because apart from the well-established Woodland Carbon Code, some aspects of other markets are still at an early stage.”

Some of the projects are a long-term commitment, Gary warns, and the selling of carbon credits may threaten a farmer’s own ability to reach net zero in the future. “Outside established carbon accounting codes and verification processes, it is not entirely clear how the sale of carbon credits in the voluntary market might impact a farmer’s ability to mitigate their own carbon footprint. It’s complex, but I am confident regulation and consolidation in these markets will follow as the markets develop.”

Gary advises farmers to take advice from a trusted source. “Find out what is available in your local area, and do your own research about what is best for your business. Make sure you are completely happy with the investment decision before you commit.”

In the meantime, he reminds farmers that the Countryside Stewardship Mid Tier Scheme has two further application rounds in 2022 and 2023, with agreements starting in 2023 and 2024. Those wanting to apply must act soon, Gary urges - applications for 2023 close in July.

About Gary Rumbold

Gary Rumbold joined FWAG South West in 2013 after a successful business career. He has a BSc Hons in Environmental Science and is passionate about sustainable British food production and the conservation of wildlife, with a particular interest in tackling waste and reducing the impacts of climate change.

FWAG SW has a team of 48 advisers across Cornwall, Devon, Somerset, Dorset, Wiltshire and Gloucestershire. The charity has offices in Cornwall, Somerset, Dorset and Gloucestershire. For more information, visit www.fwagsw.org.uk