Why largescale tree planting may threaten productive farmland
© Jevanto Productions/Adobe Stock Buying up farmland for largescale tree planting is being seen as lucrative by some investors and companies wanting to offset carbon emissions.
In 2015, the land area applied for by landowners covered around 700ha. Last year, it was close to 3,000ha. Wales and Scotland are seen as particularly attractive markets.
What changed in that intervening six years was the acceptance that climate change is real and the onus was put on every sector – from energy providers to airlines – to negate their carbon emissions.
A big surge in new carbon offsetting companies followed – businesses looking to profit from the carbon offset.
There was a massive shift in government priorities, too, including financial incentives for tree planting.
See also: Productive farms being sold to investors for planting trees
In Wales, as of October 2021, contracts offered under the Glastir Woodland Creation scheme were worth £9.3m – and £1.3m of that total is being paid to businesses registered outside the country. These management payments are for 12 years.
All tree planting covering 50ha or more must first have an environmental impact assessment (EIA), to decide if that afforestation would have a significant effect on the environment.
Tax exemptions
The tax system also favours trees. Income generated from commercial forestry is exempt from both income tax and corporation tax, and any increase in the value of timber is exempt from capital gains tax.
Forestry which is managed commercially qualifies for 100% business property relief once held for two years.
According to the Strutt and Parker English Estates and Farmland Market Review for 2021, the proportion of farms and estates bought by farmers had dropped to 52% – the lowest level since the survey started more than 20 years ago.
Meanwhile, the number bought by lifestyle buyers and private investors rose to its highest level – accounting for 47% of sales, the company reported.
Union concerns
In Scotland, private investment funds and asset managers have become increasingly active in the land market.
Union leaders have raised their concerns with the Scottish government that planting incentives and unregulated carbon markets have created a “dream ticket” for land agents, consultants, speculators and investors seeking to buy land for trees.
NFU Scotland (NFUS) vice-president Andrew Connon says that clamour for business has resulted in high levels of cold calling, including sales calls to tenant farmers who don’t even own the land.
The issue is very much a live one in Wales too. The devastation on communities from the closure of the coal mines is still very real and one that could be repeated if farming families are forced off the land, says John Davies, former president of NFU Cymru.
“You only have to travel down through the valleys of Wales to see the legacy of coal mining in the past, and how that was taken out overnight and the impact on those communities. We can’t suffer that once again here in Wales,” he warns.
“If we see the wholesale afforestation of communities, it will rip the heart out of those communities.”
Wales and Scotland
Have Wales and Scotland now become convenient places to grow trees to offset carbon use?
Devolved governments have ambitious tree planting targets – the Welsh government is committed to planting 86 million trees by 2030 to meets its net-zero target by 2050.
So, how can this be delivered if farmland is to be protected from afforestation?
“I would not be in favour of farms being taken wholesale to be planted,” Mr Davies insists.
The way forward, he believes, is to have a policy integrated into every farm going forward. This “right tree in the right place” approach, first suggested by NFUS, is now being widely supported across the industry.
England stasis
While there has been a lot of activity in the Scottish and Welsh land markets linked to tree planting, that doesn’t appear to be the case in England.
The unknowns of the new farm support schemes mean there is very little land changing hands overall.
Judicaelle Hammond, director of policy and advice at the Country Land and Business Association (CLA), says there is not enough detail for landowners to be making decisions on land sales and, consequently, they are sitting tight.
“We are not picking up a trend of farm owners selling land to corporates,” Ms Hammond suggests.
“We know there is demand from investors and corporates who want to offset, but not at the moment. Because buying land on the potential that it will be suitable for afforestation is risky, you have to jump through a lot of hoops to get there and it all takes time.”
The environmental impact assessment regulations are there to ensure that afforestation is not created without direction or planning, she adds.
“The EIA has a lot of requirements and one of those is for public consultation with community concerns taken into account. If someone wants to plant trees on productive farmland, that would be picked up during the EIA.”
Increased competition for farmland is undeniably frustrating for farm businesses wanting to expand – it makes the cost of financing expansion higher or prices them out of the market altogether, Ms Hammond acknowledges.
“But on the flip side, it offers farmers who want to retire opportunities; it gives them options,” she suggests.
Worldwide trend
There is a clear trend worldwide of carbon investors purchasing land for tree planting, including New Zealand, and that could reflect what might lay ahead for the UK countryside and farmland.
FUW policy officer Teleri Fielden urges the Welsh government not be “complacent” about these threats, such as the impact on rural local communities and reduced opportunities for new and young farmers to produce food and care for the environment.
She fears the drive for afforestation for carbon offsetting will happen regardless of government targets and wants political intervention.
“The government can prevent companies and individuals from outside Wales accessing taxpayers’ money for tree planting and maintenance by applying ‘change of use’ limits to recently purchased land, or stricter EIAs to ensure tree planting is appropriate,” she says.
Tree planting is a ‘convenient pantomime villain’, says minister
In Wales, deputy climate change minister Lee Waters says claims of mass applications for tree planting from outside Wales were “wide of the mark” and likened them to a “trickle not an avalanche”.
Of the 1,121 customers in the first 10 windows of the Glastir Woodland Creation scheme, 35 had registered addresses outside Wales.
These included small projects and schemes by organisations such as the Woodland Trust, but also companies.
“We are not seeing any evidence of an avalanche, it is a trickle of applications,” says Mr Waters.
But climate change is an emergency, he says, and that means changes to the status quo.
“We have to change the ways we do things, including how we farm,” insists Mr Waters, who has suggested that tree planting has become a “convenient pantomime villain” for those railing against the change.
He quoted the UK Climate Change Committee’s figure of 5,000ha of woodland that would need to be planted in Wales every year to 2030 to sequester carbon.
If every farm in Wales planted half a hectare on its land, Mr Waters calculates that “we would be halfway to that target”.
It would require a 10% change in land use, which he describes as “modest”.
He insists it is not a threat to the future of farming, but requires a change of approach.
Although there are big concerns about vast tracts of monocultures of conifers, these species are needed because they grow quickly, says Mr Waters, and the timber provides a valuable income stream for the Welsh rural economy.
He admits that in the past, the government has made it “far too difficult” for farmers to plant trees and, as a result, they had been disincentivised.
But systems have since been reviewed and the process is now easier, he insists.
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