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Business, Land Use and Finance

The Future Role of Land Managers in a Global Context

In January this year the World Economic Forum published a report highlighting major global risks that the world will face in the next 10 years. This year, for the first time, this report was dominated by environmental risks. ‘Climate action failure’ and ‘Extreme weather’ are the two risks that are seen as those with the biggest potential impact and most likely. These are closely followed by ‘Biodiversity loss’, ‘Natural disasters’, ‘Cyberattacks’ and ‘Human-made environmental disasters’. In addition to these environmental risks, ‘Water crises’ is also included but is categorised as a ‘Societal’ risk. When shown in the context of ‘Financial failure’, which sits somewhere in the middle of this scale, and ‘Terrorist attacks’, which is placed even lower on the scale, the relevance of this major shift in perception of risk cannot be underestimated.
Given this global outlook, it is no wonder that we are being increasingly informed in the press about the importance of taking better care of the planet, whether this is through climate change mitigation, biodiversity conservation or waste management. At a domestic level we have already seen a relatively recent focus on ‘Natural Capital’ and are increasingly hearing terms such as ‘public money for public goods’, especially so with the arrival of the Agriculture Bill (which paves the way for this). Put simply, the term ‘Natural Capital’ describes the stocks of nature that we value in society: for example, soil, forests, rivers and biodiversity.
The term ‘Natural Capital’ frames these stocks as assets which provide a series of benefits to society that are referred to as ‘ecosystem services’. These include a range of services that we already understand well and value: for example, food production, timber production, medicine, minerals and clean water. However, there is increased attention on these services which might not traditionally be as highly valued or understood. In this category we have things like floodwater management, air quality and carbon sequestration (storage) as well as more abstract concepts such as mental health services, education and inspiration for art and poetry. All these ecosystem services have an inherent value, but not all of them have a market.
Where there is a market (e.g. food production), the value is well understood, though is not always satisfactory for producers. Historically, other ecosystem services have been incentivised by government agri-environment schemes (e.g. Countryside Stewardship) with payments based on ‘income foregone’ and have largely focused on promoting biodiversity and water quality in a broad-brush approach.
The next round of agri-environment schemes (Environmental Land Management or ELM) will likely continue this approach but will see some welcome changes. However, it must be acknowledged that the government is not the only customer who can foot the bill for these services. We predict a rapidly growing private market for some ecosystem services. For example, corporates looking to offset their greenhouse gas emissions will look to land managers and farmers to assist them in this, and this can be achieved by improved soil management or afforestation. Another example is floodwater management, with the Environment Agency potentially making payments to landowners to allow land to flood rather than incurring the more expensive alternative of urban flood defence and flood mitigation.
There is a shifting emphasis on the role of land managers, and farmers must not be offended by what seems like a shift away from food production. Whilst food production will continue to dominate land use across most of the country, other markets will evolve to coexist alongside agriculture and, with this, opportunities for additional income streams will sprout.
Watch this space: you might find yourself sending invoices to British Airways or Persimmon Homes sooner than you thought!
To discuss the opportunities, please contact Will Davies on 01536 213175 email will.davies@berrys.uk.com.

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