Natural Capital - what is it and how can it be measured on farmland?

Nature is an intrinsic part of any farming business. The focus on protecting and improving the countryside environment has sharpened in recent years, with farmers and landowners facing increasing pressure from the government, and the public, to achieve sustainability objectives.

Policy changes, such as the introduction of ELMS, are also presenting funding opportunities to farmers who invest in ‘natural capital’.

What is natural capital?

The term ‘natural capital’ often crops up in conversations around sustainable land management. It is a wide-ranging term used to describe any element of nature that produces value or benefits to people, directly or indirectly.

The concept of natural capital encourages farmers to place a financial value on environmental assets, in the same way other farm business assets are valued – e.g. farm buildings or machinery.

Examples of natural capital on farmland

Natural capital includes environmental elements which provide practical benefits to people, such as:

• Clean water and oxygen
• Biodiversity of plants and animal species
• Carbon-capturing plants
• Fertile soil which enables food production

Natural capital also includes elements with social benefits, such as positive effects on people’s mental health and wellbeing:

• Public access to the countryside
• Historically significant land
• Views of the landscape

Why is natural capital important?

As custodians of the countryside, farmers and landowners have a huge role to play in protecting and enhancing natural capital. Farmed land forms a habitat for many species of animals and plants, and protecting biodiversity is beneficial for both farmers and wider society.

For example, a wildflower margin planted on farmland supports invertebrate populations, which enhances the area’s biodiversity. It also benefits the farmer with positive effects for pest management, soil health and pollination.

Financial rewards for nature-friendly farming are also on offer, particularly as more organisations view it as an option to help offset carbon emissions.

Understanding the natural capital and value of this on your farm will be vital going forwards, not only to make the most of government schemes, but also to help future proof your business and land for future generations.

Measuring natural capital

To understand each farm’s environmental assets and the opportunities they present, the first step is measuring natural capital.

There are numerous tools available to support farmers with measurement, including Natural England’s Biodiversity Metric 3.0 which uses habitat features to assign a biodiversity value. This process involves assessing current biodiversity units, such as woodland, hedgerows or streams, and comparing how different land management decisions would impact biodiversity.

Fera’s LAND360 Mapping+ package combines the latest software and the expertise of multidisciplinary scientists to set a baseline for farmers. The comprehensive service involves producing an accurate digitisation of farmland, using 30cm satellite imagery, alongside samples and interviews.

To add detail to this baseline, LAND360 Scoring+ package goes further to understand the quality of the natural capital of the landscape.

Scoring+ takes the information from Mapping+ and assess the quality of this natural capital to give farmers and landowners a clearer picture of the assets they have on-farm. It uses proven scientific methods through detailed ecological and biodiversity scoring to help build a stronger picture of the quality of natural capital.

Understanding the extent and quality of environmental assets on a farm at the current point in time sets a benchmark and forms a vital foundation for exploring opportunities to improve natural capital.