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Introduction toNature Markets Assessing landopportunities Working withother farmers Baselining,planning andmeasuring Workingwith buyers Farm businessplanning Liability & riskmanagement Using repayablefinance Signing legalcontracts Public sectorfunding & policy Tenancy &ownership
  1. Groundwork
  2. Market Engagement
Introduction toNature Markets Assessing landopportunities Working withother farmers Baselining,planning andmeasuring Workingwith buyers Farm businessplanning Liability & riskmanagement Using repayablefinance Signing legalcontracts Public sectorfunding & policy Tenancy &ownership
  1. Groundwork
  2. Market Engagement

 

What market opportunities are available to me based on my land and goals?

 

This milestone will guide you through an initial assessment of your land as you determine what your broad vision is in relation to nature and help you to identify what opportunities might be available to you to attract private sector finance.

The actions taken at this stage can be taken before you’ve made the firm decision to engage in nature markets. The considerations presented in this milestone will help you determine whether nature market participation makes sense for your goals, the condition of your natural capital and your farming business.

You can also apply many of these considerations to develop a broader vision around your natural capital and other potential funding sources – such as government grant schemes or philanthropic funding.

 

What do I need to know about nature markets to begin with?

 

This section of the Toolkit provides a brief overview of nature markets in England and how they relate to farmers. It is designed to answer some of the early questions that farmers may have around nature markets. All Toolkit content, including this Introductory section, will be updated regularly.

 

What market opportunities are available to me based on my land and goals?

 

This milestone will guide you through an initial assessment of your land as you determine what your broad vision is in relation to nature and help you to identify what opportunities might be available to you to attract private sector finance.

The actions taken at this stage can be taken before you’ve made the firm decision to engage in nature markets. The considerations presented in this milestone will help you determine whether nature market participation makes sense for your goals, the condition of your natural capital and your farming business.

You can also apply many of these considerations to develop a broader vision around your natural capital and other potential funding sources – such as government grant schemes or philanthropic funding.

 

Will I need to partner with other farmers, and if so, how?

 

Once you have a vision for your farm, the environmental enhancements or changes you want to make and a sense of the related income opportunities, you may want to consider joining up with other farmers in your area to implement your outcomes at scale to attract buyers.

Aggregation models, often started among  farmer clusters or as farmer cooperatives, bring together multiple farmers or landowners to collectively participate in nature markets. These models aim to harness the combined efforts and resources of farmers to maximise environmental benefits and economic opportunities. This section will introduce the factors that may influence your decision to join up with other farmers and some of the key considerations to keep in mind when setting up and participating in such a group.

 

How do I measure the environmental outcomes that I can produce in a robust way?

 

At this stage you will have developed an overarching vision for your land and a rough plan for what you want to improve. You will now want to make robust baseline measurements of the condition of your land and develop a detailed plan for interventions and intended outcomes. Plans will also include how you intend to maintain your interventions, measure the impact you are having and verify your outcomes in order to sell them.

 

How should I identify and approach buyers for my outcomes?

 

During your initial project scoping, you may have identified potential buyers of the environmental outcomes you are planning to deliver. Now that you have a project plan and a robust baseline, you will be ready to approach and engage buyers more formally.

Buyers will vary in their expectations and requirements. This milestone will help you prepare for initial conversations with potential buyers to ensure you are empowered to ask the right questions and present a project that will attract a fair price. Your buyers may be within your own supply chain such as retailers and businesses, or organisations who benefit directly from your ecosystem services such as water companies or firms who seek to offset their own environmental impacts.

 

How would this project fit in with my current farming business model?

 

Nature market projects are often just one part of a farmer’s wider business. Some people compare building nature market projects to developing ‘micro businesses’ for the farm. As such, much of the content you see here will be familiar to you.

However, these projects also have key features that separate them from the businesses that farmers usually engage in. For example, the longer timeframes associated and the current uncertainties relating to how nature market projects (and the deals that result) can be blended with government schemes.

Below is a list of questions that will help you think through how to incorporate these projects into your current farm business plan. This includes considerations on building a cashflow or partial budget, but also the less quantifiable factors, such as the potential drawbacks and opportunities to your wider farm that sales of present.

 

What kind of risks should I be aware of and how can I manage them?

 

Like with any aspect of a farm business, risk management is critical – especially for nature market projects that can run over several years. As the landholder, you may be leading the development of the project, be part of a wider group of farmers, or be working with a third-party project developer that is taking the majority of the risk.

In any case, it’s advisable to have a clear understanding of the likelihood of the risks involved, what will happen if the risk materialises, what you as the landholder might be liable for, and how the risk is being managed to prevent this liability.

This Milestone sets out the different types of risks that nature market projects (and the deals that result from them) often carry. The last section covers the types of legal entities that farmers might form, as these can help to manage certain risks and benefit the overall operations of the project.

 

Is it possible to use repayable finance upfront to meet any of the costs?

 

Repayable finance from investors – typically debt or equity – is not always necessary in nature markets if upfront costs can be met by the buyer or through grants.

It’s also important to note that, even when repayable finance is needed, farmers do not necessarily have to secure this themselves.

In the UK, there are very few examples of individual farmers taking out loans and no examples of farmers issuing shares to use specifically to finance a nature market project. Typically, the upfront capital required is organised by a third party – for example, a third-party project developer, a broker etc.

However, as nature markets develop further, and in the case of larger farms, there is potential for farmers to secure repayable finance and meet up-front costs, as with other parts of their business.

The below therefore sets out some questions that farmers (and, more likely, third party project developers) could ask themselves to secure repayable finance from lenders and investors, whether that’s taking on finance independently, or as part of a larger group or partnership.

 

What do I need to be aware of when signing contracts?

 

This Milestone is about the legal contracts you will use and sign to officially commit to the project and transition it to a fully fledged deal. As business owners, farmers are familiar with contracts and understand the need to carefully review the details before signing any such agreements.

Any nature market deal is likely to involve legal agreements that will be tailored to each set of circumstances. However, for ease this Milestone sets out what contract set-ups are used in this space, common contract types, and other key considerations to ask yourself at this stage.

Disclaimer: The information in this Milestone does not constitute any form of legal advice but instead serves as practical advice that has been written by speaking with lawyers, farmers and other practitioners. We recommend that appropriate legal advice should be taken from a qualified solicitor before taking or refraining from any action relating to your contracts and projects.

 

Can I participate on tenanted land?

 

The tenancy and ownership structure of land can have significant implications for farmers engaging in nature markets in the UK. The rights of tenants in relation to nature markets is still not entirely clear in the UK and may differ on a case by case basis. Below are some key considerations which can help both tenants and landlords in asking the right questions when considering engaging in nature markets as policy and legal frameworks develop. Further guidance prepared by the Tenant Farmers Association and the Country, Land and Business Association can be found here. 

 

How do public sector funding and policy align with nature markets?

 

In England, the role of public funding and support to farmers is undergoing change on a scale not seen in decades. The government hopes to strengthen the link between environmental and farming practices to meet its climate and nature restoration targets, while maintaining food security and the viability of farm businesses across the country.

This section offers a summary of how government is working with farmers to access nature markets, and provides guidance on:

 

  • How nature markets might work with public subsidy schemes,
  • What development funding is available for farmers to explore their opportunities,
  • What ‘market infrastructure’ the government is supporting – including Standards and Codes.

Groundwork

 

We have separated out these Milestones into ‘Groundwork’ and ‘Market Engagement’ to indicate which Milestones you will want to read as you consider and/or prepare for nature markets (Groundwork) and those you will move through if and when you decide to become a seller of environmental outcomes (Market Engagement).  

We recommend all farmers read through the Groundwork Milestones in addition to the Introduction to Nature Markets in order to understand better whether nature markets are for them, and how they can, at the very least, explore and baseline their farms so they are ready for any opportunities that may arise later.  

Market Engagement

 

We have separated out these Milestones into ‘Groundwork’ and ‘Market Engagement’ to indicate which Milestones you will want to read as you consider and/or prepare for nature markets (Groundwork) and those you will move through if and when you decide to become a seller of environmental outcomes (Market Engagement).  

We recommend all farmers read through the Groundwork Milestones in addition to the Introduction to Nature Markets in order to understand better whether nature markets are for them, and how they can, at the very least, explore and baseline their farms so they are ready for any opportunities that may arise later.  

 

This milestone contains five subsets of considerations that farmers may want to explore at this stage. Click on each of these to the right to read more.

You can also read case studies of farmers that have addressnatued the activities set out in this Milestone, along with other useful resources and a checklist summary of the considerations covered for ease.

Case Studies

Checklist

Useful Links

Next Milestone
Reviewing my land’s current use and condition

Reviewing my land’s current use and condition

 

A broad assessment of your land’s current condition and productivity will help to guide your thinking about what sort of changes you may want to make. Reviewing the land’s history, ecological condition, habitats and social or recreational significance can help guide your thinking and also determine what is possible. There are many tools and software programmes available to farmers to conduct this initial assessment before you formalize measurements through baselining which is discussed in Milestone 3.

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What is my land currently used for and how productive are different parts of my farmland?

Before generating your vision for your land and determining whether nature markets make sense for you, you’ll want to take stock of your land and see what you have to work with. The current use and productivity of your land will inform what types of environmental improvements are possible to deliver. It can be helpful to start by asking yourself why you farm certain livestock breeds, or grow certain crops, and to review the farming operation.

Some key questions you can ask yourself are:

  • Why am I farming these crops or this type or livestock?
  • Is there any unproductive or difficult to manage land on the property?
  • Are any areas of the farm degraded or am I noticing productivity declines?

You may consider what ecosystem services the land currently provides and whether you could take action to improve these ecosystem services to increase your profits. For example, if a field is next to a waterway, a change in management practices or an intervention such as tree-planting or leaky dams might decrease flood risk downstream or help improve water quality.

If your natural capital is already in good condition this is great, and you will need to consider the concept of additionality which stipulates that you can only sell an additional environmental benefit to that which you already provide, and one that you are making only because there is now private payment for it.  I.e You cannot sell something that already exists or that you would have done anyway. The concept of additionality is still being debated as whether it has a place in nature markets, but at this stage it is worth considering the extent to which you can make additional improvements.

There is typically always room for uplift, however which a natural capital account or ecological survey, along with natural capital baselining explored in Milestone 3, may identify. For example, your farm’s soils may be close to saturation level for soil carbon preventing any opportunities in soil carbon sales, but there may be opportunities for biodiversity improvements or reducing nutrient runoff into waterways as a means of providing income.

 

What sorts of habitats do I have and what condition are they in?

At this stage you will also want to note the different types of habitat you have. You can then determine if there are obvious environmental improvements you can make, such as restoring a wetland or connecting multiple habitats. You can do this on your own or refer to external resources such as UKHAB to help identify and classify different habitats.

Is the size of my land relevant to developing an environmental project?

Typically, larger tracts of land are required to generate the volume of ecosystem services that would appeal to private buyers. Buyers of ecosystem services prefer to buy at a scale commensurate with the impact they are seeking (such as offsetting their carbon footprint).

That said, small areas of land can still attract buyers for ecosystem services. There are woodland creation sites selling carbon, for example, that are less than five hectares in size, and wetlands of one to three hectares delivering nitrate reductions.

More information on increasing the scale of your offering by working with other farmers can be found in Milestone 2.

 

 

What is the land’s history?

The site’s history may reveal key insights that inform your project’s design, as well as potential risks. For instance, if a river previously flowed through an area of land, then you may want to prioritise a project with hydrological impact, such as wetland creation. Similarly, if soil fertility has been depleted through extensive pesticide use, you may consider changes in management practices to increase soil organic carbon and provide environmental uplift and co-benefits for agricultural productivity.

 

 

Does the site have any social or recreational significance?

There are some instances in which farmland may have social or recreational significance which might be considered when developing your project. For example, community members may feel strongly that walking access should be maintained through a restored woodland, though access routes may need to be altered to make sure newly-planted areas aren’t damaged. On the other hand, increasing the social value of a site may bring in potential revenue streams through ecotourism, and attract buyers who are looking to support social impact, for example through connecting the local community to nature through the provision of wild camping sites, or educational tours.

 

What tools and datasets can help me learn more about the ‘natural capital’ on my land?

There are a variety of tools and software programmes available to farmers to map sites and assess their conditions and key features with varying levels of detail. Many programmes are targeted specifically to farmers by incorporating considerations of crop or animal productivity, crop type and other agricultural factors into their models. Some offer the ability to design a land management plan while identifying potential revenue streams, including the sale of carbon and biodiversity credits. Others offer access to groups of potential buyers themselves, with monitoring protocols built in for these buyers once initial work is complete. A selection of available software programmes are discussed in the case studies throughout this toolkit.

If you do not know what types of ecosystem services your land provides or what kind of project you want to design, a Natural Capital Account measures stocks of natural capital and what benefits or ecosystem services those natural capital assets provide. For instance, a natural capital account may reveal the carbon sequestration potential of your soils or species richness across a landholding.  A full natural capital account is not imperative to start selling ecosystem services, however. You may not need a full ecological survey if you know with certainty what ecosystem services you want to sell, or if initial project funds are limited.

Many online tools and software programmes offer a free, limited version of their services, and these should be utilised to the project’s benefit as much as possible. However, if a farmer is considering paying for a certain software package or natural capital accounting service, thought should be given to costs relative to the potential revenue generated from the credits. At this stage, keeping costs down is always helpful!

 

Setting your vision for your land

Setting your vision for your land

 

You will be looking to align potential changes with your vision and overall goals for your farm. Getting clear about your goals at this stage will help you determine whether a nature market project will help you in achieving that vision and in identifying appropriate interventions.

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What is my vision for the land?

Setting out your vision for your land should take place before engaging with external experts to develop your management plan. After taking stock of your land and practices, consider what changes you would like to see, such as improved water retention in your soil, a decrease or change in livestock mix, or a reduced reliance on fertiliser or pesticides.

You may want to improve the profitability of less productive land. Although some nature market interventions will involve making changes to how productive land is farmed, such as agroforestry or silvopasture, you could also prioritize unproductive land for the development of a nature-enhancing project like planting a wildflower meadow or woodland on marginal land.

You may also want to consider where you have noticed environmental or productivity decline on your farm. You could use your project to both generate saleable credits and improve the environmental condition and resulting productivity of your land, by increasing soil organic carbon for example.

It’s helpful to also develop a long and short-term vision for your land. What sorts of changes would you like to see in 5, 10, or 30 years? It is good to recognise now that some improvements will require long-term commitments. For example, if you are considering improving the biodiversity on a piece of your land to sell Biodiversity Net Gain (BNG) units, you will have to consider how a 30-year contract will be maintained if you sell your farm or pass it down to a family member.

More information about long-term maintenance can be found in Milestone 3. You may also consider what sort of contribution you’d like your farm to make to the wider landscape, such as improved habitat connectivity or better water quality in towns downstream. This process can help guide you toward specific interventions and ensure that your future project will help you achieve your goals.

 

What habitats or sites are connected to the site that I may want to work with?

You may want to consider the areas immediately surrounding your farm to see if there are potential ‘synergies’ with nearby sites that can deliver greater improvements to natural capital. For example, a farmer might collaborate with a neighbour to create a ‘biodiversity corridor’ by connecting two neighbouring woodlands, which could deliver a higher number of Biodiversity Net Gain (BNG) units for sale. Incoming Local Nature Recover Strategies may also help you to identify changes you might make on your land which will have wider benefits for your area.

Working with Sites of Special Scientific Interest (SSSIs) and Areas of Outstanding Natural beauty (AONBs) may also open up access to grant funding to support the early stages of your partnership.

Note: many mapping technologies include scientific analysis on where best to place interventions in relation to neighbouring sites. You may also consider discussing your project with local catchment partnerships, local councils, local planning authorities and eNGOs to identify further synergies.

 

What is the ideal land use change for the site(s) and what are the specific interventions that will deliver this?

After assessing the current state of your natural capital and getting clear about your long-term vision for your land, you will be well placed to begin thinking about potential interventions which will deliver your environmental goals and provide income opportunities. Some ‘easy win’ examples include allowing hedgerows to grow out, establishing grass field margins and taking awkward field corners out of production for biodiversity. There may also be opportunities to change practices that provide ecological improvements and income opportunities that are not generated by nature markets directly – such as ecotourism, or higher premium products. Nature markets are just one tool for farmers to access new income streams.

Once you’ve decided on your high-level goals, you’ll need to get more specific on what interventions will deliver those goals, how best to incorporate them into your farm and where they are best placed to deliver the most value. For example, for natural flood management projects, leaky dams and hedgerow planting are separate types of interventions that will have different impacts depending on where they are used. Likewise, if you are considering planting a new woodland then you will need to consider the correct species mix and planting technique for your land to maximise impact and permanence.

To be certain your proposed interventions will deliver their intended outcomes, seek out external advice from someone with ecological training and expertise, ideally with understanding of the farming landscape.

Often you can find free advice from eNGOs, public bodies, land agents and local partnerships, or from learning from other projects. You can also pay an ecological surveyor or consultancy, which you might have already used to assess the current state of your site.

 

Legal ability to change land use and tax implications

Legal ability to change land use and tax implications

 

There may be tax or legal implications of engaging in nature markets depending on the classification of your land, your tenancy and ownership status, and the types of interventions you plan to make. It is important to get tax advice from a qualified agricultural accountant or tax expert.

Note: The information in this Milestone does not constitute any form of legal advice but instead serves as practical guidance on how to manage engagement with lawyers and the process of contract development.

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Is the site under any classification or protected status on the site(s)?

If the site is under such pre-existing legal environmental obligations, this can affect the additionality of any environmental outcomes that the project is claiming it will deliver.

If such environmental outcomes are expected under an existing legal obligation, then the project will not be delivering ‘additional’ environmental outcomes and will not be credible to buyers, investors and other financiers.

Examples of legal obligations include site classifications and subsidy agreements. Relevant site classifications include Areas of Outstanding Nature Beauty (AONBs), Special Areas of Conservation (SACs) and Sites of Special Scientific Interest (SSSIs) and others. You can find out if your land is under any site specification by using Defra’s MAGIC Maps tool. Landowners and managers may have already entered into legal agreements to deliver certain interventions in exchange for subsidies or other benefits. A common example is Countryside Stewardship (CS).

Note: existing legal obligations on a site do not automatically exclude nature-based projects. However, the full scope of the project should be discussed with all parties of both the existing legal obligation and the new project to confirm additionality and maintain integrity. If uncertain, you may seek legal advice on these topics from advisors with experience in this sector, such as law firms or land agents.

 

What if my site up is signed up to other agri-environmental schemes?

If you have already signed up parcels of land to other agri-environmental schemes, you may still be able to access nature markets using the same parcels. As of September 2023 in England, farmers can access private markets on the same land dedicated to Landscape Recovery, Countryside Stewardship and the Sustainable Farming Incentive. It is important for farmers to keep up with emerging guidance around those agri-environment schemes and to clarify your approach with potential buyers.

 

 

Do I need permission for changes in land use from anyone?

Some nature-based projects will require environmental permits or planning permission. For example, to build a treatment wetland that removes nutrients from a waterway, a particular permit is needed from the local planning authority. Before designing your project, you will want to consider whether you will require planning permissions or permits to deliver your interventions. These processes will take time and may incur additional costs and should be integrated into your overall timeline and financial model.

If unsure of whether you need specific permits or permissions, farmers should check with the their local planning authority or local Environment Agency office.

If you are a tenant, you will also need permission from your landlord to make substantial land use changes and to engage in nature markets. More information on navigating nature markets as a tenant can be found in the Tenancy and Ownership section of the toolkit.

How will this land use change affect my tax position?

A key consideration for farmers engaging in nature markets is how changes in land use will impact their tax position. Removing land from agricultural production will make the land ineligible for Agricultural Property Relief (APR). As an example, an arable field taken out of production for a wetland can no longer be used to apply APR. On the other hand, some biodiversity projects are maintained through agricultural management techniques such as grazing and can remain eligible for APR. His Majesty’s Revenue and Customs (HMRC) held a consultation on the tax implications of participating in nature markets from March – June 2023. The results of this consultation have not yet been published as of November 2023.

 

 

How will this land use change affect my land values?

It is not yet clear how developing nature market projects on farmland will affect land prices. The roll out of Biodiversity Net Gain (BNG) may result in increased demand for land. Defra estimates that 5,400 ha of land will be needed annually for habitat creation to account for BNG and that 75% of that may be able to be delivered on site. This would mean 1,300 ha of offsite land would be required annually.

On the other hand, tax implications of taking land out of production and long-term maintenance contracts which need to be taken on by new buyers of land may decrease values. Although there is no clear answer to how nature market participation will impact land values, it is something to bear in mind at this early stage. Speaking with other farmers who have engaged in nature markets in your area may help clarify potential impacts of your own project.

 

Will regulation require me to deliver these changes any way in the future?

It is likely, given government commitments globally to reduce climate change and halt biodiversity loss, that farmers will be required through their supply chains to deliver on environmental outcomes in the future. Farmers should engage with their supply chain to understand what they may be expected to deliver down the line.

This is important to know because farmers may be required by their supply chains to be net zero in the future – and if farmers have sold carbon credits beyond their own on-farm emissions, farmers may be not meet net zero requirements.  It is therefore recommended that you only sell credits above what it would take to offset your own emissions. In this way, you can ensure you can demonstrate that you are ‘net zero’, while still selling additional carbon sequestration to external buyers.

 

I’m a tenant. Can I participate?

Tenant farmers can participate in existing nature markets in England with their landlord’s permission and pending certain conditions. Tenants will need to ensure that their tenancy contract shows that they have management control of the land for the entirety of the environmental market contract period. Tenants may also want to develop plans with their landlord for when their tenancy ends to ensure permanence of the environmental benefit of the project. Some key considerations for tenants will be further explored in the Tenancy and Ownership section of the Toolkit.

 

Assessing market opportunities

Assessing market opportunities

 

Once you have developed a broad vision for your land and have identified the types of improvements you hope to make, you will want to determine what market opportunities there are to help you deliver those changes.

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Who might benefit from my change in land use? Could they be willing to pay?

You will want to consider early on whether there are potential buyers for their nature credits or unite. Buyers will typically be beneficiaries of the land use change, or those seeking to mitigate their environmental impact. For instance, if there are businesses downstream of you that suffer from flood, then there may be an appetite for you to provide natural flood management risk reduction. If you live in an area where housing development is planned, then you may have demand for BNG units. If you want to deliver soil carbon improvements you would want to scout about now as to whether there is a demand for that. A ‘beneficiary analysis’ could entail a simple online desktop research, conversations with potential buyers and brokers, or more in-depth interviewing.

Are there already markets and mechanisms that can channel these payments?

The potential markets for ecosystem services available to farmers are laid out in the Toolkit’s Introduction to Nature Markets section.

How certain or developed are these markets, and should I engage now?

Nature Markets are relatively new in England, however the UK Government is committed to scale up these markets to help deliver on their climate and nature targets. The Nature Markets Framework, published in March 2023 provides some clarity and guidelines around stacking and bundling of different benefits, additionality, and blending public funding such as ELMS payments with private finance through nature markets.

It will be up to each individual farmer to decide whether to engage in nature markets now, or to wait for further development. Some markets, such as those for woodland and peatland carbon are more advanced in their development and have clear rules set out in the Woodland Carbon Code and the Peatland Code. These markets may be attractive to farmers who wish to take part in more established markets.

As mentioned in previous considerations, farmers are likely to be expected to deliver environmental outcomes through evolving legislation or through their supply chains in the future. Private nature markets offer an opportunity for farmers to be paid to shift their management practices and land use before delivering on environmental outcomes potentially becomes a ‘license to operate’.

Taking part in nature markets will not be for everyone, however, nor are they the only way to improve profitability. Farmers should carefully consider the benefits and drawbacks of nature market participation, engage with their supply chain on emerging expectations and talk to other farmers who have or are considering developing nature market projects. More information about working with other farmers can be found in Milestone 2.

 

Should I speak to buyers and beneficiaries now?

You may not need to engage buyers until a later stage when the design of the project and full modelling of benefits is near completion. For example, the sale of carbon credits via the Woodland Carbon Code is an established process and many project developers approach buyers when they have a confirmed number of credits they can deliver.

However, it’s a good idea to open conversations with some potential buyers early on. For example, you may want to contact your Local Planning Authority and enquire about demand for BNG units. You may also want to contact your regional water utility to see if they are looking to engage farmers around within the catchment to make environmental improvements.

 

Has this been done before? Are other farmers exploring this idea?

Many farmers across the United Kingdom are beginning to engage in nature markets which can offer opportunities for shared learning. The Natural Environment Investment Readiness Fund (NEIRF) Community of Practice offers resources, project summaries and guidance which may be useful when developing your project. The case studies within this toolkit can also help you understand what other farmers are doing and identify key challenges and opportunities.

More information about working with other farmers through aggregation models can be found in Milestone 2.

Conducting initial budgeting

Conducting initial budgeting

 

Before implementing any changes to your land or engaging external service providers to conduct baselining and measurement, you may want to get a rough idea of the potential costs of your project and make an initial budget. Project development costs (those costs of developing a project plan, engaging other farmers in an aggregation model and some initial measurement) are separate to the implementation costs of the project. Grants and philanthropic funding can often be helpful in this initial phase.

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What should I be budgeting for in this initial stage?

Although at this stage you may still be deciding on whether to engage in nature markets, there are some costs you should keep in mind. The following are early costs that may be incurred to help you understand the current condition of your land, develop a broad vision for what you want to accomplish and understand what the legal or tax implications of your project may be.

  • Software programmes
  • Natural Capital Account
  • Accountant or Tax Lawyer fees
  • Farm Advisor
  • Land Agent
  • Ecologists

You will not need all of the above services but they should all be kept in mind as you are moving through the first three Milestones. Finding ways to limit costs at this early stage is important as baselining and project implementation costs can be high.

 

What funding is there for me to explore and develop this idea now?

There may be public funding available to aid in the development of your project plan. The Natural England Investment Readiness Fund (NEIRF) Round Three is focused on aiding farmers who are working collaboratively to access private finance for environmental projects. You may also find grant funding through your local authority or eNGOs. Accessing funding for up-front costs can significantly reduce the overall cost of your project.

 

How much should I ask for?

Obviously ask for what you need, but it helps to be realistic. Local funders will likely only donate £1,000 or so, whereas corporate funders will want to put more to work.

Funders typically want to fund a defined piece of work (a research piece, baselining etc) rather than core costs also – which can be a challenge when marketing, legal and staff costs are needed. Consider pro-bono support where funding is not possible.

 

All Case Studies
Checklist

 

 

You can download a Word copy of the Milestone 1 Considerations as a checklist here, to help with your own project planning.

Alternatively, you can find a simple list of the Considerations below:

 

 

  1. Reviewing my land’s current use and condition
  • What is my land currently used for and how productive are different parts of my farmland?
  • What sorts of habitats do I have and what condition are they in?
  • Is the size of my land relevant to developing an environmental project?
  • What is the land’s history?
  • Does the site have any social or recreational significance?
  • What tools and datasets can help me learn more about my ‘natural capital’?

 

  1. Setting the vision for your land
  • What is my vision for the land?
  • What habitats or sites are connected to the site that I may want to work with?
  • What is the ideal land use change for the site(s) and what are the specific interventions that will deliver this?

 

  1. Legal ability to change land use and tax implications
  • Is the site under any classification or protected status on the site(s)?
  • What if my site up is signed up to other agri-environmental schemes?
  • Do I need permission for changes in land use from anyone?
  • How will this land use change affect my tax position?
  • How will this land use change affect my land values?
  • Will regulation require me to deliver these changes any way in the future?
  • I’m a tenant. Can I participate?

 

  1. Assessing market opportunities
  • Who might benefit from my change in land use? Could they be willing to pay?
  • Are there already markets and mechanisms that can channel these payments?
  • How certain or developed are these markets, and should I engage now?
  • Should I speak to buyers and beneficiaries now?
  • Has this been done before? Are other farmers exploring this idea?

 

  1. Conducting initial budgeting
  • What am I budgeting for the following initial costs (note: you will not necessarily need all these services):
      • Software programmes
      • Natural capital accounting / early baselining
      • Accounting, tax, legal advice fees
      • Farm Advisor / Facilitator
      • Land Agent
  • What funding is there for me to explore and develop this idea now?
  • How much should I ask for?

 

 

Farming Toolkit Question

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