Every few years in the farming industry a new phrase or concept comes along which grabs the headlines and the attention of policy makers.
Throughout the 2000s, in the wake of the foot-and-mouth crisis, there was huge focus on the need for producers to ‘reconnect’ with the consumer.
Five years ago, this was edged aside by the idea of ‘sustainable intensification’, which was a response to the challenges of increasing demand for food from a growing global population in a world where land, water, energy and other inputs are in short supply.
Neither of these issues have gone away. In fact, they are still highly relevant. But there are a couple of new phrases now which farmers should expect to hear a lot more of – ecosystem services and natural capital.
So what are they and why are they of relevance to farming?
You can find lengthy definitions on the internet but, in short, payments for ecosystem services could see landowners enter long-term contracts where they will be paid to deliver the environmental outcomes which Government and others want and need.
These outcomes might be to reduce flooding, offset carbon emissions, improve soil management, raise water quality or boost biodiversity.
What this means on the ground will differ according to the end goal. While many landowners are already investing in the ‘natural capital’ of their farms to produce the desired results, others will have to do more.
As a concept, it differs to existing agri-environment schemes as the contracts can focus on agreed measurable environment outcomes and the payments on offer reflect this, whereas schemes, such as Countryside Stewardship, are based on a standard income-forgone formula.
While the market is still in its infancy, there are already some pioneers showing how it might be done.
For example, in the south west of England, farmers are being paid by a water company to fence livestock away from rivers in order to improve water quality.
Global giant Coca-Cola, a major buyer of sugar from UK beet, has also provided funding in Norfolk for a project which seeks to reduce the amount of sediment running off fields into East Anglia’s chalk streams.If the provision of ecosystem services is to become mainstream, there is still work to be done on working out the appropriate mechanisms.
But there is a belief the ecosystem services sector has the potential to be an important new form of on-farm diversification for landowners. It is an exciting prospect.