HomeNatural environmentThe Sustainable Farming Incentive is spending public money but for what public good?

The Sustainable Farming Incentive is spending public money but for what public good?

This post is by Dustin Benton, policy director, and Lydia Collas, policy analyst, at Green Alliance.

We are five years into England’s Environmental Land Management Scheme (ELM), which has been touted as a major benefit of Brexit and key to the transition from unjustifiable subsidy for farming to a new and profitable future for the countryside. ELM’s basic logic remains sound: paying farmers and land managers for the public goods they provide is a smart way of getting the wide range of things we need from the land, from wildlife and carbon, to access, recreation and, of course, good food. 

But things aren’t going well: last week the Climate Change Committee raised large red flags, noting that “in agriculture and land use, emissions are essentially unchanged from a decade ago” and that the recent Carbon Budget Delivery Plan had seen “a reduction in ambition in the land use sector.”  

For those who make their living from the land, things aren’t going any better: this year, upland farms are expected to earn £16,000. This is a little down on the pre-Brexit norm: in 2016, upland grazing farms averaged £19,000 in income. Lowland grazing farms made an average of £12,000. Reactionary calls to pause ELM’s rollout are growing, most recently from Sir Robert Goodwill, chair of the Environment, Food and Rural Affairs Committee. However, pausing the transition would strand these farms on incomes that are extremely difficult to live off. The original ELM vision would have changed that by reallocating much of the rural payments budget to those farms least well suited to producing food, but which can provide public goods like nature and carbon removal. 

But this isn’t the ELM we were promised. The Department for Environment, Food and Rural Affairs’ (Defra’s) focus on the Sustainable Farming Incentive, rather than the other two strands of ELM (Landscape Recovery and Countryside Stewardship), is the heart of the problem. The solution is to go big on Landscape Recovery and the best bits of Countryside Stewardship. This could easily increase rural incomes and get land use on track to net zero. 

ELM isn’t delivering on net zero
The Sustainable Farming Incentive can’t do this: only eight of the 23 measures in the 2023 Sustainable Farming Incentive have any potential to reduce emissions. According to the government’s own figures, if these eight measures were taken up according to the government’s projections in its Carbon Budget Delivery Plan, they’d deliver only 2.6 per cent of the UK-wide emissions cuts needed from the farming sector from 2023 to 2027; and four per cent of those needed from 2028 to 2032. Yet it is this scheme that the government wants most farmers to apply for, and is the one which risks mopping up most of the ELM budget.  

The second arm of ELM, Countryside Stewardship existed before Brexit and was designed without emissions reduction in mind. Last year, the government said it would stay approximately as it is. This is a problem because its incentives are all wrong. For example, why would a farmer maintain woodland, paid at £350 per hectare per year, when they could for earn £544 per hectare a year instead by creating wood pasture, which stores fifty times less carbon? Countryside Stewardship has the potential to play a big part in net zero, nature restoration and supporting vibrant rural communities, but it can’t without reform. 

Landscape Recovery, the third arm of ELM, has the greatest potential to deliver public good and value for money. But it’s being starved of budget and rationed to just a few farmers: just £12 million was paid through the scheme last year, less than half a per cent of the budget. Because it’s being kept so small, it will only be able to deliver just 2.5 to five per cent of the UK-wide emissions cuts needed from land during 2023 to 2032. Landscape Recovery schemes have been oversubscribed: farmers and land managers want to get involved, but Defra’s not letting them.  

ELM needs reform to live up to its promise
If Defra wanted to achieve the vision behind ELM, it could. But payments for new woodland, wetland (particularly on peat) and other semi-natural habitats must be urgently scaled up so the least productive ten per cent of land in England can be managed for environmental benefit by 2030. This would deliver England’s full land-based contribution towards net zero in every year for the next 15 years. That would require opening up Landscape Recovery to any farmer who wants to join the scheme rather than rationing it and changing what Countryside Stewardship is paying for. It would mean accepting that the Sustainable Farm Incentive, as the lowest value for money strand of ELM, shouldn’t dominate, as it has over the past three years. 

We are publishing new research soon which shows that doing this would dramatically increase farm incomes in the least productive areas, supporting struggling farmers, as well as help to address the climate crisis, which is good politics. After all, 74 per cent of people are worried about climate change. It’s late, but over the next 15 months, the government could still give us the ELM we were promised.  

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Green Alliance is a charity and independent think tank focused on ambitious leadership and increased political support for environmental solutions in the UK. This blog provides space for commentary and analysis around environmental politics and policy issues as they affect the UK. The views of external contributors do not necessarily represent those of Green Alliance.