Horizon blog: What do the new environmental schemes mean for English farming?

Today (6 January 2022) at the Oxford Farming Conference, Secretary of State for the Environment George Eustice has announced outline plans on the Landscape Recovery (LR) and Local Nature Recovery (LNR) schemes, which will sit alongside Sustainable Farming Incentive. Our trade and policy analyst Jess Corsair looks behind the headlines to examine what the new schemes may mean for farming in England.

Details of LR and LNR schemes have been eagerly anticipated as farmers plan their businesses around reduced direct payments and a more challenging trading environment.

The overarching aim of the schemes is to ensure that government can meet its environmental targets, which it can only do by incentivising production of public goods. It needs farmers to engage in order to succeed and has adopted a collaborative approach to help drive uptake of the new schemes. But why should farmers participate?

The new schemes encourage a continuing shift in mindset from farmers that gets them to think about these public goods as outputs – just like any other farming output, except that it will be rewarded by government rather than by the market. It is important that farmers examine the new schemes carefully, when Defra releases the details, to weigh up the costs and benefits of participating. My colleagues here at AHDB have looked closely at the Sustainable Farming Incentive and calculated what it is likely to mean for the bottom line across a range of farm sizes and types. We will be publishing our analysis shortly, so watch this space! As for LR and LNR, we will be doing the same for these schemes as soon as more detail is announced in order to ensure our levy payers can make informed decisions as to whether or not to participate. This is crucial, as in the face of declining levels of support, as well as a host of new global trading relationships (see our previous blogs), now is a great time for farmers to review their businesses and ensure they are fit and ready for the challenges ahead. AHDB is offering businesses a free business review to support them in this, with those farmers involved so far giving us some fantastic feedback.

So in today’s announcement, Defra has stated the schemes will play a role in halting decline in species, bring 60 per cent of England’s agricultural soil under sustainable management by 2030 and restore up to 300,000 hectares of wildlife habitat by 2042.

The Local Nature Recovery scheme has been described by Defra as ‘the improved and more ambitious successor to the Countryside Stewardship scheme’. It focuses on local level actions and working collaboratively to tackle issues such as water pollution, mitigating flood risk and creating wildlife habitats. The scheme will pay farmers for these and other targeted actions, such as planting trees and hedgerows or restoring peat and wetland areas. This scheme is also set to complement and work alongside the Sustainable Farming Incentive, so farmers will be able to enter into both schemes. This scheme is set to be trialled in 2023, with a full roll-out across the country in 2024, so I expect that more information about the trials and potential pilot will be announced in due course.

The second of the schemes, Landscape Recovery, will support changes on a larger scale, including land-use change and habitat restoration. These changes may be focused on establishing new nature reserves, restoring floodplains or creating woodland and wetlands. It has been announced this morning that applications will open soon for the first wave of Landscape Recovery projects. There will be up to 15 projects within the first wave and these will be focused on recovering threatened native species and restoring rivers and streams. There are huge expectations from these pilot projects alone, including carbon savings equivalent to taking 12,000 to 25,000 cars off the road, as well as improving the status of threatened species.

It is evident that government is creating schemes in order to reward action that will benefit the environment, support nature recovery and work towards net zero. The new scheme focused on landscape-level projects is aligned with industry developments and focuses on working at a landscape-level to impact water and biodiversity. George Eustice has described the Countryside Stewardship scheme as a bridge to the Local Nature Recovery scheme, which is encouraging for farmers already in, demonstrating potential continuity, along with expected improvements and changes, between the two. But with both of these schemes, time will tell. As more information is released on the projects and practices involved within the schemes and crucially the payments, there can be further discussion on how these schemes compare to previous ones and what impact these could have on businesses and sustainable food production.

Another welcome announcement from the Oxford Farming Conference is that Countryside Stewardship payment rates will be increasing by up to 30 per cent to both those already involved and those who are yet to apply. This significant increase in payment, alongside Countryside Stewardship being described as a route into the new scheme, has positive impacts for those involved and for new applicants.

The key next step for levy payers is to decide whether to get involved in the 15 projects running in the first wave of the Landscape Recovery scheme this year. As more information on this pilot is announced, Defra will be encouraging both individual and groups of landowners and farmers to send in applications for landscape-scale projects, defined as between 500 to 5,000 hectares, in order to feed into the development of this new scheme. So it may well be worth getting together with the neighbours to discuss over a cuppa – or maybe even a pint.

Happy New Year to all our readers.