How UK’s Sustainable Farming Policy Is (Or Isn’t) Shaping Farmer Success

When I get Ben Adams on the phone, a passing car nearly drowns out his voice. As usual, he is shuttling between farms and conference rooms for consulting projects and speaking engagements. Through his work, Ben is always engaged in hands-on work with farmer across the UK — the learning from which shows up in his prolific diffusion of farming information online. When I was looking to get the pulse on recent changes to UK sustainable farming policies, Ben was an obvious first call.

Ben is blunt. The past few years could have gone better. Instead of laying out a clear plan for British farming, the UK’s Department for Environment, Food, and Rural Affairs (Defra) has been “drip feeding information” to farmers in a way that did not instill confidence. In the nearly eight years since the UK voted to leave the EU, the agriculture sector lacked clarity from successive governments (five prime ministers, seven finance ministers, and eight Defra secretaries). Farmers were subject to a cycle of consultations, draft proposals, and false starts on a number of policies. All the while, the UK maintained a cross-compliance status-quo with the EU Common Agricultural Policy (CAP). Farmers were able to continue receiving a subsidy through the Basic Payment Scheme, but were unaware of what the next government would ultimately adopt as domestic farming policy.

Farmers were not the only ones left in the dark. Post-Brexit uncertainty also seeped into sustainability regulation in the financial sector. High-level government policy documents on Sustainable Investing and Mobilising Green Finance continually reference the UK Green Taxonomy, a document that is aiding in market creation by providing clear definitions of what counts as “green” and “sustainable.” Reference as they might, the foundational UK Green Taxonomy does not exist. The government missed its initial deadline to publish a taxonomy in 2022, then promised an update in early 2023, and most recently failed to publish a draft for consultation this past autumn.

Nebulous policy developments also ail UK non-financial disclosure requirements. Confirmed late last year, the UK Sustainability Disclosure Requirements (SDR) is described as the “most significant UK sustainability legislation to date” (Johnson and Hunter, 2024[1]). To utilize one of a series of sustainability labels, the SDR requires at least 70% of assets to be in accordance with sustainability objectives. These objectives must be defined against a “robust, evidence-based standards.” In lieu of a UK Green Taxonomy that should supply such standards, the SDR suggests employing a series of high-level international policy documents, the most concrete of which is the EU taxonomy for sustainable activities. While this might be useful for a number of sectors, the reference is null for agriculture, as the EU is yet to define a sustainable taxonomy for the agriculture sector.

The landscape for corporate sustainability disclosures is not dissimilar. The UK’s Transition Plan Task Force (TPT) established a Disclosure Framework with specific guidance for the food and beverage sector (which covers food and beverage producers – a.k.a. agriculture). The language on producer disclosures is weak, suggesting that “an entity should consider disclosing” plans that “may” include activities such as:

  • improving grassland management,
  • ensuring that soil health is proactively and positively managed, or
  • integrating trees into pastureland. (ibid; p. 23).

These three examples, and the whole list under section 2.1, could send producers to farm for the health of the soil and for the benefit of adjacent ecosystems. However, with only suggestive language and without more specific details on what constitutes sustainable farming practices, the disclosure guidance is too malleable and abstract to translate into material change from financial institutions and big corporates.


The Farmer Experience

To understand where British farming is headed and grasp what opportunities might be available for regeneratively focused investors, we have to look to farmers. After eight years of uncertainty, Defra settled on two new programs: the Sustainable Farming Incentive (SFI) and Countryside Stewardship grants. Following two years of pilot schemes, SFI comes into full force to replace the BPS this year (2024). Ben Adams, who also participated in the pilot, is using the SFI to its full extent. He is placing 13% of his land under permanent options such as wildflower meadows, grass margins, and winter bird food cover. The rest of his farm will see a five-year rotation of winter wheat, whole crop, winter bird food with legume fallow in springtime, winter wheat again, and cover cropping before spring oats.

Not only does Ben think that the SFI is heading in the right direction for long-run environmental benefits, but it is also better for business. This year he is doubling what he used to receive under the BPS. Beyond the increase in payments from the government, Ben is also benefitting from increased margins on the farm by taking unprofitable land out of production and replacing break crops (such as rape) with legume fallow for which he is now getting paid. Before we hang-up, Ben makes one thing clear. While the SFI and CS are making environmentally positive methods more financially viable, it is still difficult to operate a farm as a business in the UK.

Hannah Fraser agrees. Five years ago, Hannah, a doctor by trade, started farming full-time. With her husband, they began converting his family farm for organic certification, and they are employing additional regenerative practices. In the first years, yields dropped significantly. It was Countryside Stewardships grants that allowed Hannah to stay afloat. Today, SFI and CS continue to buoy their activities; without them, she admits, they could not stay in business.

While the SFI and CS allow Hannah to farm in a way that is helping to restore the health her soils, she wants to go further. Thanks to her organic certification and regenerative practices, she was able reduce her reliance on international feed markets and now sells to Wildfarmed, a local milling cooperative (Yorkshire Organic Mills), and directly to a nearby baker. Through these new revenue streams, she also observed the increased value her cereals take on once they’ve been milled. Her next dream is to invest in a mill and the cleaning, drying, and storage equipment necessary to start a small brand to sell locally. The barriers before her are arduous. Not only does she require a large capital investment, but she also feels she lacks the business know-how. After five years learning what it means to run a farm, she recognizes that she still needs to learn what it means to run her farm as a profitable business.

Hampshire farmer John Smith* is facing a similar problem. To keep his family farm in the black, he convinced his father and uncle to embrace the SFI and CS. However, they are hesitant to accept John’s dreams of developing a local brand, launching education programs, and even getting into industrial storage. Coming back to the farm four years ago, John describes the move as “financial suicide.” From John’s perspective, the only viable path forward is to diversify their income streams, but his family is comfortable with their style of operations from the past three decades and hesitant to John’s new approach.

Under the past thirty years of BPS and prior subsidies, the business savvy farmer was given no financial motivation to look after the long-term health of his soil. Instead of using cover crops to help restore a fallow field, it made more sense to try out a more aggressive chemical fertiliser. If the new product worked, they might improve their margins and receive a BPS payment. If the new product failed, they would still receive a BPS payment. If they left a field fallow with cover crops, they would lose out on any potential produce and receive no BPS payment.

Worse, the BPS also endorsed an outlook that entirely separated the ideas of farming and running a business. From his childhood through to his current role as an assistant estate manager, Jim Bliss watched this issue play out in the Lake District. Many upland farmers, Jim observes, farm for “lifestyle and culture” and do not consider their activities a business. Disinterested in making money, they utilised BPS payments to float just above the poverty line.


A Call for Innovative Finance & Investment Solutions

The experiences of Hannah, John, and Jim conjures an image of British farming that at its best lacks support for entrepreneurial young farmers and at its worst actively dissociates the idea that farming is also about running an environmentally and financially viable business. As their experiences demonstrate, such a lack of support and dissociation is incoherent with the reality of modern farming. John Smith returned to his family farm in part due to the pressure of not being the generation that left farming. In order to make farming appealing for his son, he needs a system that not only encourages environmentally sound practices that make sure his land remains fertile but also a system that can match his entrepreneurial spirit, bringing revenue diversification and financial security to his work.

Outside of Britain, this mindset is often already inherent. Traveling across South America and Africa for his Nuffield scholarship research, Jim spoke with farmers who were engaged in a diversity of businesses. Not only did they grow a variety of crops, but many were simultaneously raising multiple species of animals, involved in tree planting, education programs, and local direct to consumer sales. For these populations, successful farming inherently required a diversification of income streams – often without government support. Strikingly, when Jim explained the UK system of upland farming, they found it incomprehensible that a subsidy program supported an inherently failing business scheme to the environmental detriment of the community.

The current gap in British farming policy – that is, the gap between supporting farming as a cultural activity and supporting farming as business – is an opportunity for regeneratively minded investors. Looking at the problem from a case-by-case basis, investors could pair small debt disbursements alongside technical assistance. Though this might eventually take on the shape of a formal incubator like Hectar outside of Paris, it could also mirror the nimble structure of the WRI’s Land Accelerator and TerraFund programs – where participating in WRI run training and technical assistance programs are a prerequisite to even submitting an application for investment. Another similar education and technical assistance program, called Lively Earth, is under development by Fanny Corpert in France.

Popular also in developing markets is an aggregation strategy. Keith Agoda of Producer’s Trust recently discussed this strategy on Koen van Seijen’s podcast, and a similar approach is worthwhile exploring in Britain. The farmer’s I spoke with over the past two weeks all work on farms over 200 hectares, well above the UK average farm size of 81 hectares. Their larger size places Ben, Hannah, John, and Jim into a level of production where a small stand-alone brand could survive. However, nearly half of British farmer work on land less that is less than 20 hectares in size. Aggregating multiple small farms under one brand name would allow these farmers to develop products with better margins and reduce reliance on buyers in national and international markets.

Aggregation could come from the private sector, like that of Wildfarmed. It could also come from government policy such as the EU PDO and PGI regulations – under which local syndicates and cooperatives often form to promote and market their local goods. (Similar approaches were also posited by the Green Finance Institute, p. 67).

For both approaches, Jim Bliss’ experience on the Lowther Estate demonstrates that small, local farm brands are viable in the UK. Returning from his Nuffield research, Jim is working to incorporate more regenerative practice onto the estate. Most successfully, he has introduced an adaptive multi-paddock grazing regime for his livestock. The combination of SFI and CS initiatives and his new AMP program, allowed the estate to develop a new, compelling narrative about the quality of their meat – which they now sell directly to local hospitality partners at a 10%-20% market uplift. Building on this work, Jim and the estate are also seeing initial success with their honey and venison products.

British farming is at an inflection point. The Sustainable Farming Incentives and the Countryside Stewardship schemes are a first and tangible step toward more ecologically positive farming becoming a systematic norm in the UK. Both systems incentivize positive ecological practices, but they are yet to bridge the gap towards making farming financially viable. Alongside this change, there is also a demographic shift. Almost 70% of farm holders in the UK are over 55 years old, with less than 3% under 35 years old. That is to say, the future of British farming rests in the hand and aspirations of farmers like Ben, Hannah, John, and Jim. If this group is indicative of what is to come, then regenerative investors can expect a cohort of young farmers excited about deploying regen methods and who are ready for partnerships to make their business ambitions materialize.

[1] For a more complete overview of the SDR see this overview article from Allen and Overy, 2023).



William Higgins is the program manager at Barka, an impact fund focused on African SMEs in sustainable agriculture and climate resilience. He also runs Convivium, a blog on culture and sustainable food systems.