In these uncertain times, it might be tempting for farmers to put the brakes on investment in sustainability but now is the time to ensure the British agriculture sector is at the centre of a green economic recovery, and the support for farmers is out there, says Lee Reeves, head of agriculture at Lloyds Bank.
When the NFU announced stretch targets for the agriculture sector to be Net Zero by 2040 at the start of the year, no one could have envisioned where we would find ourselves just six months later.
And now, as the grip of the global pandemic starts to loosen, and the lockdown in parts of the UK begins to ease, farmers across the country will no doubt be reviewing their own sustainability goals from a very different standpoint.
Just prior to the UK lockdown coming into effect at the end of March, we conducted research with 200 UK farmers from across the regions and all farm types, about their plans to invest in sustainability initiatives in order to meet the NFU’s net zero by 2040 target.
The findings were sobering. 9 in 10 (87 per cent) did not know what their farm’s carbon footprint was.
And yet, two thirds (62 per cent) said they would be able to meet the NFU’s target.
Just 3 per cent are already at net zero.
There is no doubt that farmers understand the importance of the challenge ahead – more than two thirds of those we polled agreed that agriculture must fundamentally change its operating model if the UK is to meet net zero targets.
But there is certainly some confusion about how to actually make the change happen.
Now, three months on, the situation is even more stark. An entire quarter of progress on sustainability has been lost to the Covid-19 pandemic and its effects show no sign of letting up any time soon.
It would be entirely understandable if investment in sustainability was slipping down the agenda, but this would be at a time when action is more sorely needed than ever.
Investing in renewable energy was the most popular tactic in the move towards net zero among the farmers we spoke to, with a fifth (22 per cent) saying this formed part of their future plans.
But even though such investment can help reduce costs in the long run, and anything which can help manage costs is welcomed during times like these, the initial outlay is invariably costly.
It is unsurprising, then, that the cost of investing in green tech and sustainable solutions is a big barrier, in fact, two fifths (42 per cent) of the farmers we spoke to said it was the biggest risk to their business.
Here we see another disconnect between farmers’ fears and their knowledge about potential solutions. Not only does a vanishingly small minority, just one per cent, currently use green finance solutions, but more than half (58 per cent) report never having heard of green finance at all.
It is vital that the sector’s partners, from the Government to banks and lobby groups, work to close this gap in awareness and make sure farmers are equipped with the right guidance and support to reach the NFU’s target.
For our part, through our Agri teams at Lloyds and Bank of Scotland and through AMC, making us the largest lender to the sector, we are committed to working alongside British agriculture to help it invest in green initiatives.
A major part of that is lowering our lending limit from our Clean Growth Finance Initiative where now lending over £25,001 can qualify, making it easier for smaller operators or those with lower investment needs to access more manageable chunks of finance.
We are also widening the criteria for what sort of initiatives we will fund, including agri-tech solutions, soil health and peatland protection, because we know that all farms have individual needs.
But help does not just come in the form of finance. We are also helping farmers to access carbon measurement tools to support the 9 in 10 farmers who do not currently know the carbon footprint of their farm, by partnering with three market-leading tools: Cool Farm Tool, Farm Carbon Toolkit, and Agrecalc.
A partnership with the Cambridge Institute of Sustainability Leadership will give our agricultural experts even better training and understanding of the challenges the sector faces.
And, on a practical level, we are heavily subsidising the planting of one million trees a year, the majority of which will be on agriculture land to help absorb damaging carbon dioxide emissions and help provide protection against extreme weather.
The pandemic presents a chance to carefully re-start the economy in a sustainable way with green thinking at its heart, and all the signs suggest that this will continue to be reflected in consumer sentiment, which has been increasingly focused on green issues for the past few years.
The farmers we spoke to are well aware of the potential business impact of changes in consumer demand and pressure from climate groups and activists to be more sustainable, with almost two thirds (63 per cent) perceiving both as risks to their business.
It is clear that becoming more sustainable is not just a matter of meeting the NFU target, but about future-proofing the farming sector, and so the imperative to address the sector’s carbon emissions has arguably taken on a fresh urgency.
Farmers must keep this front of mind as they look to their future plans – safe in the knowledge that supportive and guiding partners in sustainable thinking are right there by their side.