I have been asked to write a blog about the new farm support grant, the Environmental Land Management Scheme (ELMS). This is due to replace the current Basic Farm Payment Scheme, aims to incentivise farmers to achieve environmental enhancement and protection and restore and improve natural capital and rural heritage.
Trial for ELMS schemes have just started and will run until 2022. Pilots will then run until 2024 with the scheme currently planned to roll out from 2025. Given the current political uncertainty, and the lack of information being put forward by Defra, there is not a lot one can definitely say on the subject. Six years seems a very long lead in period for a scheme which was first muted back in 2015. I think however that it is well worth considering some of the consequences that this long gestation might have.
The benefits that the ELMS programme aims to achieve include improved air, water and soil quality, increased biodiversity, climate change mitigation, cultural benefits and better protection of historic environments.
The repeated mantra from Defra is that public money will only be used to support public goods. I am going to try and briefly explain what constitutes a ‘public good’ and how the government might direct it’s money to achieve the best results.
Staff at Natural England are currently developing a series of new tools by which public goods can be measured and assessed. An updated biodiversity metric will shortly be available which will enable land managers to measure a gain or loss in biodiversity according to land use changes. This has evolved from the original Defra biodiversity offsetting metric from 2012, but able to detect much more detailed changes to habitats.
Natural England are also developing a more general eco-metric to determine a wide range of other environmental improvements (or losses) resulting from land use changes. Biodiversity net gain (BNG) is a prerequisite to Environmental gain. From next year BNG is to be mandatory for all development projects, so will inevitably become integral for ELMS as well. Some local authorities are already insisting on biodiversity net gain for major schemes.
These are not simple systems and require quite a high level of expertise to use them effectively. However, they allow us to measure and quantify the ecological and environmental improvements which we all want to see. These are the tools which will demonstrate the public goods for which farmers in the future will be paid.
One of the present concerns is how to we set a base line for the current ecological condition of farms from which we can then measure both biodiversity and ecological improvement. We can produce extended phase 1 or UK Habcode habitat maps but there is a fear that some farmers will be tempted to destroy or degrade existing habitats prior to any assessment, so that they can then apply for grant aid to restore the same habitat once ELMS is up and running. This may sound cynical, but the agricultural industry has form when it comes to this sort of thing, and farmers ‘gaming’ the new system is of major concern to Defra.
Improved remote sensing systems are already giving us reasonably detailed habitat information so this may be sufficient to provide a reasonable ecological base line, and these systems are improving all the time, just like the eco and biodiversity metrics.
Given our newfound ability to measure the environmental gains, it will be tempting to award ELMS grants only to landowners who can demonstrate the most benefits and can subsequently deliver them. Payments may be partly on result (a system currently being trialled) with farmers having to demonstrate that measurable gains have been achieved, so improvements will need to be monitored and recorded.
Given the new environmental tools and technology, there is no way that ELMS will be ‘fill in the form and get the money’ type of scheme. It is far more likely to offer significant sums of money to high quality schemes on a targeted and competitive basis. Dieter Helm, an Oxford University Professor, proposes that environmental public goods should be auctioned to ensure that the taxpayer always receives best value. Only those farms which can provide the most benefits for the least amount of grant support will receive the money.
As I have said previously, Biodiversity Net Gain (BNG) will be built into the system and will be a pre-requisite for all schemes. The key then will be adding further complementary environmental benefits such as flood remediation, soil protection and carbon sequestration.
The big unknown will be the value apportioned to the provision of public access. When does a public good (such as a right of way) become a private benefit (such as a commercial cycle trail centre)? We know that demand is higher closer to urban areas and these schemes will certainly be targeted. In many instances ELMS may require applications from groups of adjacent farmers in order to realise the benefits. We have experience of many EU grant applications on this basis. The scope for creating new access routes for pedestrians, cyclists and horses is enormous, and will re-invigorate the countryside leisure market, particularly in areas where agricultural incomes are likely to fall.
ELMS will also need to be integral to the main drive to revolutionise UK agriculture as outlined in the 2017 Industrial Strategy white paper and such things as the recent Farm to Fork initiative. Removing the CAP should hasten the adoption of new precision technologies, artificial intelligence, soil-less production and alternative proteins which will transform food production over the next decade. How the government choose to support these developments (if at all) remains to be seen.
So how do farmers and landowners best prepare for all these changes?
Know your environmental assets. A thorough knowledge of which habitats you have, and their ecological condition is essential. How many farms monitor their protected or notable species populations? It is a good time to start. ELMS payments will be dependent on being able to demonstrate ‘measurable’ improvements in biodiversity. Ecological monitoring will be an essential skill to acquire.
Through co-operation. You are much more likely to be successful in obtaining ELMS if you are able to submit landscape or catchment scale projects with multiple benefits. These require partnerships with landowners, local communities and a wide range of stakeholders. The lead partner may well be the local authority or a voluntary body, enabling smaller farms to get a piece of the action.