How much income can nature provide on a commercial farm?

Oxfordshire farm manager Julian Gold is contemplating whether nature can provide the 750ha Hendred Farm Partnership with an income.

Conscious that until now many farming businesses have failed to maintain their natural capital, he is putting that right.

However, he points out that farming doesn’t make enough money in most years to be able to divert some funds back into the environment.

“It hasn’t mattered up to now, but that’s changing,” he says.

“Using a factory analogy, we run a food production line alongside ecosystem services – our factory premises – and we need to maintain those services and put something back, while still operating the production line.”

See also: Biodiversity net gain – legal issues for farmers

Natural capital is variously defined as the elements of renewable and non-renewable natural environment resources (such as plants, animals, air, water, soils, minerals) which offer benefits to society.

Having looked at how the farm is performing, Julian has been able to compare that with what’s on offer in terms of income from agri-environment schemes, carbon trading and biodiversity net gain (BNG).

That information is helping him decide how and where changes are introduced, as well as showing that it is possible to help the business, nature and wider society.

His figures show that pulse crops are inconsistent and drag down the overall arable margin.

“When you look at how spring beans have performed here, for example, giving us a margin of just £27/ha, it’s clear that payments from environmental schemes such as the Sustainable Farming Incentive [SFI] and Countryside Stewardship [CS] give us the opportunity to replace these low-margin, risky crops,” he says.

“By bringing in legume fallows or winter bird food actions in their place, the environment will benefit and so will the business. They have a margin of £400 to more than £500/ha, depending on which ones you opt for and how you combine them.”

Other SFI or CS options are used to complement existing cropping, such as cover crops, companion planting and no use of insecticide (see table “SFI and CS actions”).

“We don’t use insecticides on this farm, so that’s going to be worth £30,000 to the business,” Julian says. “And cover crops, once the seed and establishment costs have been deducted, will give us £29/ha clear profit.”

However, each action must be considered carefully, he warns. “We’ve had AB8 in-field wildflower strips on the farm for a few years. They cost £776.02/ha, which includes the opportunity cost of the lost crop. 

“The SFI and CS payment rates are less than this, so these in-field features are costing the business around £100/ha.”

That said, there is anecdotal evidence these strips are starting to provide agronomic benefits, such as reduced slug pellet use in oilseed rape, he says.

“It’s possibly due to the predation of slugs by beneficial insects using these habitats.”  

Julian makes the point that thoughtful integration of SFI and CS is possible. With more SFI actions coming later this year, he is confident there will be much more he can do.

“In the last few years, we have also used hedge planting grants and headland buffer strip payments to link habitats effectively, with minimal sacrifice of crop area.”