COMMENT: Dr Abigail Barker of Natural Capital Research says the far-reaching reforms will replenish depleted natural capital reserves and provide a baseline for net-zero carbon strategies

The Agriculture Act 2020 lays out ambitious plans for the food supply chain in England, outlining clear decarbonisation and regenerative agriculture objectives. Farmers, landowners and land managers will need to comply with the new regulation and provide evidence of the effectiveness of their measures. While the onus may seem high, the benefits to the food supply chain are significant, and well-performing farms may even be able to make better deals with commercial players by leveraging their net-zero carbon and biodiversity credentials.

New policies are certainly bringing about changes to the way that natural capital assets are regarded, and to their treatment over time. Improvements in natural capital will play a critical role in ensuring that farmers and landowners continue to receive subsidies in the future. The Agriculture Act sets out the new post-Brexit approach for agriculture support in England and represents the biggest change to the subsidy regime since the 1970s, with the EU’s per hectare basic farm payment being superseded by the principle of “public money for public goods” and the transition to the environmental land management scheme (Elms) in 2024.

Without a rock-solid baseline it will be increasingly difficult to develop and track ESG, biodiversity and net-zero carbon strategies

Under Elms, farm management will be required to provide robust, accurate evidence of the enhancements they are bringing with their measures, an outcome that relies on a solid initial baseline report. There will be three tiers: tier one will pay farmers for actions they take (going beyond regulatory requirements) to manage their land in an environmentally sustainable way; tier two aims to incentivise the management of land in a way that delivers locally targeted environmental outcomes (local networks) and tier three aims to deliver land use change projects at a landscape scale to deliver environmental outcomes (nature networks).

To meet the requirements for these tiers, farmers will need to demonstrate the current state (baseline) and how this can be improved or enhanced over time. Farmers are therefore turning to tools and systems that enable them to make accurate measurements of carbon sequestration, the impact of their cultivation regimes, and on the emissions produced by connected processes. Being able to identify and measure natural capital assets in the landcover, soils, water and topography accurately, down to just a few meters, is the foundation for the development of ESG, biodiversity and net-zero carbon strategies.

Elms is just one policy in a changing regulatory environment that aims to improve overall natural capital resources in England by tackling, for example, water table depletion, low flows in rivers, diffuse pollution of air and water, and loss of floodplain capacity, as well as restoring wildlife and habitats that have been severely depleted over the last 40 years, according to the National Biodiversity Network’s State of Nature 2019 report.

Elms aims to restore habitats as well as tackle water table depletion and low river flows. (Credit: Wozzie/Shutterstock)

Biodiversity net gain is another policy that aims to maintain or demonstrate net gain in biodiversity stocks. Within this framework farmers and landowners must be able to efficiently and effectively identify their natural capital assets and the ecosystem services provided by those assets (carbon storage and sequestration, flood risk reduction, soil erosion protection, pollination services and biodiversity), measure them and then report improvements over time.

Without a rock-solid baseline it will be increasingly difficult to develop and track ESG, biodiversity and net-zero carbon strategies. With a natural capital baseline it is possible, then, to look at the opportunity to enhance the environment. Accurately modelling the natural capital benefits that land could provide if enhanced by planting of particular species and communities is thus a key element for successful environmental change.

A robust, evidence-based understanding of environmental impact is becoming critical to securing subsidies

When it comes to measuring net-zero carbon initiatives, there are a number of market prices, such as the new UK emissions trading scheme. It becomes necessary to take a range of carbon price scenarios and associated discount rate into account for the capitalisation over future periods, partly dependent on a company’s overall ethical approach to the future generations, its interpretation of its stewardship duty and its net-zero objectives.

A robust, evidence-based understanding of environmental impact across crops, woodland and permanent pasture will not only help plan an optimal use of land but is becoming critical to securing subsidies. It could also prove an asset in securing improved contracts with commercial entities that are increasingly interested in the environmental credentials of their suppliers. Suppliers that can prove the impact of their net-zero carbon and biodiversity strategies are an asset to commercial players that serve an increasingly environment-conscious market.

Dr Abigail Barker is chief operating officer of Natural Capital Research. For further information and to find out more about Natural Capital Research’s NatCap Map, visit:

Main picture credit: Reimar/Shutterstock
regenerative agriculture  sustainable farming  Agriculture Act 2020  ELMS  National Biodiversity Network  soil erosion  farming subsidies 

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