New economics for sustainable land use

In this speech, delivered at today’s Westminster Food & Nutrition Forum, Patrick Begg, our Rural Enterprises Director, discusses his ‘three-part recipe’ for the the future of UK agriculture policy.

Farming is in a tough place. I’m not the first and certainly won’t be the last person to say this. Just look at the stark economics. Defra’s most recent stats for 2015/16 show that, on average, only 4 sectors make pure agriculture pay. Poultry, dairy, horticulture and pigs turn a profit; the rest run loss-making agricultural operations and are essentially dependent on a big slug of Basic Payment.

As Brexit looms, the prospect of tariffs and a difficult trading climate makes these numbers look even more unpalatable. Couple this with the very real squeeze in public funding and the future for our countryside – underpinned for decades by European money – looks very fragile.

And how does all this feel if you’re a farmer? For very many, you thought you were doing what the country wants and producing food at cheap prices. But hard as you try, you still need a subsidy just to get by. What a lousy position to be in! You don’t want to be dependent, but you know you are and you can’t see a way out of it…

Highland cattle conservation grazing above the village of Malham, Yorkshire Dales National Park.

So is UK agriculture facing a massive structural upheaval, where efficiency, scale, precision and specialisation – squeezing the last drop of productivity out of the land – trump all else, and the farm business casualty rate mounts up through that process?

I hope not, and I think there are reasons for optimism and ways we can avoid that rather brutal future. We need to be creative and re-draw the nation’s contract with farming and farmers – something we haven’t done properly since 1947. We can chart a better course, and strike a different deal.

The first thing to recognise is the co-dependency of farming and the natural environment. Stable naturally fertile soils, clean water, a vibrant suite of pollinators and the birds and mammals that these support – these are all fundamentals, not nice to have add-ons. Yet that’s exactly how these core pieces of natural infrastructure have been treated to date. Agri-environment has been at best a bolt-on.

But surely there is no long term future for our farming industry and the growing of excellent food if its natural foundations continue to erode at current rates? So my first plea is to keep up public investment and secure as much of the current £3.1billion for our countryside.

However, the deal needs to be re-cut, so that natural assets and their restoration and stewardship take a much bigger share and are properly rewarded. These are genuine and universal public goods that farming can be properly and justifiably rewarded for delivering for all of us and for the long term.

Second, and related, is the broadening of our understanding of who could and should pay. There are real opportunities to develop new natural markets and we have been working with our partners in Green Alliance to work up what and how this might be realised.

Starting with slow, clean water – and working with water companies, other businesses and leading landowners – we’re planning to turn our concept of a ‘natural infrastructure scheme’ into a workable proposition that we’re going to test and develop in a real place.

It’s a multi-seller, multi-buyer idea where farmers, acting collaboratively, can produce catchment-based prospectuses of real, upstream management work that downstream private and public sector players can buy. If we can make this work, there’s potential to develop similar mechanisms for carbon, tourism or public health.

How a Natural Infrastructure Scheme would work.

Third, is to recast the emphasis of policy and at the same time properly turn our farmers on to doing more for nature. The last 20 years or more has been a push and prescribe system: write a list of prescriptions, and pay the farmer to carry them out. Transactional, auditable, granted, but largely a turn off. It’s a robotic way to get things done and there’s very little evidence that it has created a strong sense of shared endeavour between farmer and public purchaser.

It’s striking how much deeper engagement and farmer buy-in has been created by existing experiments in paying for longer term outcomes such as on the Burren in Ireland. So we’re signing agreements with a group of tenants in the Yorkshire Dales this week to trial our own version of this kind of scheme, but with an added edge which is that it is aimed at paying for whole farm outcomes, not just for single, specialised habitats.

This is not a replacement for the tried and tested HLS-type mechanism but it could be a powerful complement which unlocks motivation and long term commitment to and in our farmers. They have all the skills, sympathies and experience to deliver, and a public policy mechanism that invests in and recognises these has an even greater chance of success.

So that’s my very succinct 3-part recipe:

  • keep investing from the public purse, but rebalance the deal away from direct payments to securing fundamental natural assets with long term paybacks for everyone;
  • get creative, and support as far as possible the potential for new private and public sector money to flow, for products that go beyond – but complement – top quality food production. Let’s grow the cake available – not replace slices of it – to help pay for sustaining a more brilliant countryside
  • think long term and engage farmers in the journey: buy outcomes and a
    destination, not just activity.

Patrick Begg is Rural Enterprises Director at the National Trust.

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One thought on “New economics for sustainable land use

  1. Consider alternative opportunities, too. A pilot project on a Cornish dairy farm is apparently making more income from biomethane sales and electricity generation than from milk. NT has installed hydro power at Cragside (and elsewhere??); farmers may have similar opportunities, especially through cooperation with local Low Carbon groups.

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