Is it Time to Embrace a Land Use Framework?
Never before has land been subject to so many competing demands. Could it now be time to embrace the concept of a Land Use Framework? And where does that leave farming, now in a largely unsupported world? Ian Ashbridge, Head of Agriculture and Environment, explores.
Britain is made up of a collection of islands with 73m inhabitants. The land must feed them, provide homes for them at a faster rate than ever before, ensure the recovery of nature and biodiversity, and not only sequester carbon, but mitigate the effects of climate change, such as flooding. It must also, to some extent, generate clean energy.
For centuries, food production’s role as the primary use for land has been unchallenged. Yet today, Britain’s agricultural policy is entirely environmentally led.
Since the Agriculture Act became law in 2020, many have commented that the balance appears skewed with too great an emphasis on the environment and biodiversity, and too little importance placed on farming and food. The Westminster government has stated that it is “confident” that output will be maintained as traditional support is withdrawn and Environmental Land Management is introduced, although no real economic modelling has been published. Never before has government been content to leave domestic food production to the market – perhaps because they do, in fact, expect environmental land management schemes (ELMs) to fulfil the role of farm subsidies by proxy.
Agricultural policy is a devolved matter in the UK. Scotland’s approach has broadly been to continue Direct Payments, although it has been gradually increasing ‘conditionality’ – measures for more sustainable farming or environmental practices. In Cardiff, the Welsh government proposes to introduce a Sustainable Farming Scheme, although pressure from farmers has already seen some features of this watered down. In Northern Ireland, the proposed Farm Sustainability Payment retains many features of traditional farm subsidies such as basic income support, an area-based claim, and supporting ‘entitlements’. Yet in England, in 2024, about 75% of the value of basic payments will be gone, and the removal of all farm support well in sight.
In England, the first tier of ELMs is emerging clearly, although uptake of the Sustainable Farming Incentive remains modest. There is value here, and the scheme is well constructed – although it is no replacement for Direct Payments, and instead rewards farmers for other environmental practices, in a very similar way to Countryside Stewardship. For the first time, the food producing enterprises must stand or fall on their own economics.
At the recent COP28 summit in Dubai, it was notable that among the climate change commitments and historic ambition to ‘phase out fossil fuels’, there were substantial agreements on food production and food security. The official declarations from the heads of state and governments included: “recognising that unprecedented adverse climate impacts are increasingly threatening the resilience of agriculture and food systems”, and “noting that agriculture and food systems are fundamental to the lives and livelihoods of billions of people”.
“We stress that any path to fully achieving the long-term goals of the Paris Agreement* must include agriculture and food systems”.
There was also, for the first time at COP, acknowledgement of the contribution to climate change by agriculture and the uncompromising statement: “We affirm that agriculture and food systems must urgently adapt and transform in order to respond to the imperatives of climate change”.
And the statements seemed to include a summation of our own domestic dilemma in relation to land: “[We must] maximise the climate and environmental benefits - while containing and reducing the harmful impacts associated with agriculture and food systems by conserving, protecting and restoring land and natural ecosystems, enhancing soil health, and biodiversity, and shifting from higher greenhouse gasemitting practices to more sustainable production and consumption approaches”.
Somehow, we must have all these things from a finite resource.
The pressure on land use is intensifying. Many anticipate a change of government in 2024, with the possibility of relaxations to planning laws to accelerate housebuilding. But at the same time, the demand for land used solely for nature may go well beyond the expectations of ELMs or the Agriculture Act.
The international ‘30 by 30’ commitment means that 30% of a country’s land is to be managed for nature by 2030 – only six years hence. In the UK, the devolved administrations have adopted this equally. This commitment is an official target of the 2023 Kunming-Montreal Global Biodiversity Framework, to which the UK government is a participant.
Could it therefore be time to look again at the concept of a Land Use Framework? This was an idea promoted most recently by the Food, Farming and Countryside Commission, and was expected to be adopted by DEFRA in late 2023. Essentially, it provides a documented consensus – a set of principles around which all stakeholders in land use can agree a plan. One critical outcome is that everyone with a need will get a voice – particularly in
food production, which currently has no targets. Yet the idea seems to have lost momentum for now.
In its absence, the challenge to farming is unmistakeably clear. Whatever ELMs earns you - the bottom line - the flow of cash and investment to support the business will be what separates successful farm businesses from others – and with no direct payments to buffer the losses, the risk of business failure will be real. In theory, free-market economists will welcome this as it should cause land to become available and create opportunity. But total food output hangs in the balance.
With no financial cushion to make the difference between a profit and a loss in marginal years, agriculture is now exposed to risks it has not experienced in living memory. Successive lossmaking positions will cause pressures on businesses to become insurmountable, the inability to service debt or borrowings will probably be where the rope begins to fray first and not all farming businesses are able to secure lending on an entirely owned and appreciating land asset.
The economic principle of aggregate incremental gains – perhaps better summarised as the ‘Team Sky’ approach - is that to become 1% better in several areas leads to far greater improvement overall. The challenge for the arable or livestock business will be to identify these areas, work out how to achieve that change, and what it would take to make it happen.
Part of this is understanding where these farms sit in relation to others, and it is more important than ever for farming businesses to understand their performance without reliance on their own perceptions. Performance benchmarking is an established business principle and has only ever found sporadic interest in mainstream farming - perhaps because BPS and other support mechanisms meant this was not necessary.