Is Harnessing Natural Capital a Sustainable Solution to Land Use?

Farming practices which harness and regenerate natural capital offer widespread sustainability benefits, as well as business opportunities for farmers.

The concept of ‘natural capital’ encourages farmers to place a financial value on environmental assets, which are any elements of nature that directly or indirectly produce value or benefits to people¹. For a detailed definition of natural capital, and farmland examples, read our blog: ‘What is natural capital and how can it be measured?’

In this blog, we hear from Glyn Jones, Head of Science (Plant) at Fera and Guy Thallon, Fera’s Strategic Business Development Manager, on the current state of natural capital in the UK and the opportunities available to farm businesses investing in natural capital.

The current state of natural capital

According to the Natural Capital Committee’s (NCC) most recent report, many aspects of natural capital in the UK are on a downward trend¹.

Using a red, amber or green rating, the NCC has classified soils, flora, fauna and habitat assets in England as red, meaning they’re currently deteriorating in quality and volume.

Natural capital is like any other capital – if you don’t reinvest in it, it will degrade to the point where the ability to gain a sustainable revenue is lost.

As it stands, the UK government is not on course to achieve its objective to improve the environment within a generation with the current proposals it has in place, which is why investment in natural capital is so vital.

Benefits of investing in natural capital

Farming practices which harness natural capital, such as regenerative agriculture, have huge potential to reinvigorate ecosystems.

Long-term farmland experiments are starting to see positive indicators of sustainability and biodiversity trends. For example, the Allerton Project has been a pioneer in nature-friendly farming, proving that land can be managed in a way that is productive yet also creates habitats and improves biodiversity.

By investing in natural capital, farmers can support the evolution of pretty much every ecosystem. Regenerative principles help to store carbon, enhance biodiversity, aid flood protection and improve water and air quality. These benefits are most visible locally, but carbon sequestration has widespread positive effects on a much bigger scale.

Growing farm business opportunities

There are increasing incentives for farmers to invest in natural capital. With the introduction of ELMs and more private funding sources coming through, there’s a growing market for farmers to generate income through these new ‘products’, such as carbon and biodiversity.

The most appropriate option for natural capital investment depends on unique land factors and the ultimate goals of a business. One size doesn’t fit all when it comes to making future land use decisions. For example, if a grower has just built a potato store, they will clearly want to produce potatoes long-term to get a return on investment, rather than using the same land parcels to plant trees.

However, if you’ve got grade 3 or 4 agricultural land, or an area of land that’s constantly wet due to flooding, alternative land use scenarios such as woodland creation, may be a strong consideration.

When it comes to making future land use decisions, farmers need to be aware of the range of options that are available or what is possible with the land assets they have, as well as considering what’s right for their business long-term.

The LAND360 package helps farmers to understand exactly what natural assets they have, providing an evidence base to make decisions on which options for harnessing natural capital make financial sense.

Improving farm sustainability and profitability

Harnessing natural capital can bring direct value to a farm business, as well as secondary value for the environment.

From a scientific perspective, it’s well-understood that if you’re working to improve your soil health, you could see direct returns in the quality and the cost of production of your crop.

However, the shift to harnessing natural capital on-farm is a ‘system change’ which takes time. The important element, which is emphasised with LAND360 Ecosystem+, is the long-term, strategic planning required to enable the correct decision to be made.

The widespread benefits won’t be immediate, they can take years – but in time, farmers can get to a win-win situation, where investment in natural capital is helping to futureproof farming businesses and create a positive legacy.

Click here to find out more about the LAND360 package and how it could benefit your business.