Land use change offers opportunity – but don’t lose control – CAAV

Farmers should beware losing control of their land use options amid conflicting demands for natural capital, public goods and food production.

According to the Central Association of Agricultural Valuers (CAAV), farmers are facing a generation’s change in just one decade, with the removal of support payments combining with Brexit, the drive to net zero and changing political and public demands.

Those pressures drive new competition for rural land use with potential for massive change in the coming years and more varied enterprises to meet all these needs.

But it’s vital to assess the options to retain control rather than being locked into long-term plans, warned Jeremy Moody, secretary and adviser to the CAAV. “Farmers will need trusted advisers to work through this.”

Speaking at the Oxford Farming Conference on January 5, Moody said two-thirds of the retargeted Basic Payment money in England will go to changing habitats, while Scotland is aiming to increase forestry, restore peatland and reduce farm emissions by 31% by 2032.

“Such policies might help or hinder farmers but the real decisions over land use are theirs to take. This decade offers the transition period in which to manage this major change.”

Moody discussed five general routes for farming to develop:
  • Commodity production by good farmers focusing on efficiencies;
  • Higher investment, higher return farming of vegetables, fruit and livestock under cover;
  • Controlling value with specialism, branding, adding value, etc;
  • Combining agriculture with environmental outputs;
  • Focusing land use mainly on the environment, from ‘re-wilding’ to forestry and solar, with little or no agricultural production.

Farmers should be aware of the obligations and restrictions of some environmental land use agreements – they could tie them into restrictive management for 30 years or more, according to Moody

In some cases – like solar leases – that might be attractive, but agreements based on outcomes rather than actions would be even more limiting.

“If you’re paid to provide services that’s one thing, but once the buyer takes control of the carbon, biodiversity or other outcomes you may have lost control of the farm, with restrictions and penalties to protect what the buyer has bought.”

Carbon paradox

“Carbon is also a paradox: It is very important to the farm but has a trivial market value,” said Moody.

“Selling carbon credits looks to handicap farmers who will be expected to reduce their own carbon footprint; it is counter-productive as the farmer will then have to find that carbon reduction again.”

Farmers are also unlikely to be wooed by forestry, given the permanent land use change and loss of options it involves. But new markets for biodiversity net gain and nutrient neutrality could be potential options in future.

However, biodiversity net gain agreements are set at over 30 years, and nutrient neutrality could take even longer.

Given rapidly advancing scientific knowledge and technology, as well as evolving natural capital markets, the agricultural world could be a very different place in 30 years, warned Moody.

Farmers and landowners should therefore take balanced and trusted advice to understand the implications before signing on the dotted line.

“These are very big decisions that are as critical as any that we’ve faced in living memory. Be sure to do things on the right terms for the right reasons and the right money.”