The basics
The way that the environment and land use is valued is changing and through public and private investment, new markets are starting to be developed.
Environmental markets operate on the principle that natural resources and ecosystem services should have economic worth. This introduces the prospect of financial incentives for land managers who can protect or enhance nature that deliver benefits to society or private businesses.
These markets can be structured around financing the many benefits nature provides. For farmers, this could allow them to receive payment for environmental benefits alongside their core agricultural enterprise.
Most focus to date has been on developing markets that reward the delivery of:
- carbon storage
- biodiversity
- water benefits.
These markets could play an important role:
- in helping with agriculture’s ambition to achieve net zero by 2040
- increasing the scale of protecting the natural environment
- providing businesses with a valuable new source of diversified income.
However, these markets are in the very early stages of development. They are still fast evolving with many uncertainties around how to ensure their integrity, fairness and compatibility with other farm income streams, as well as the implications for the broader farm business structure.
The NFU has identified five key principles to ensure that emerging markets are attractive for farmers and growers to engage in with confidence over the long term:
- Environmental markets must work alongside the domestic production of food, energy and fibre.
- Public policy and government initiatives must support the development of private markets.
- Environmental markets require clear rules and standards to allow farmers and buyers to participate confidently.
- Markets should be accessible across a range of farm sizes, tenures and business structures.
- Farmers must be rewarded fairly for the delivery of environmental goods.
Watch again: Biodiversity Net Gain Midlands webinar
This NFU Midlands webinar explored how mandatory Biodiversity Net Gain requirements affect businesses.
NFU Panel Firm Shakespeare Martineau also gave a practical view of BNG legal agreements.
Environmental markets timeline: our work so far
NFU election manifesto
The NFU published its general election manifesto – Farming for Britain's Future – which outlines our key asks of the next government. In it we asked for the development of environmental markets which work alongside domestic food, energy and fibre production, have clear rules and standards to allow farmers and buyers to take part with confidence, are accessible across a range of farm sizes and business structures, and fairly reward farmers for the delivery of environmental goods. Read: General Election 24: Farming for Britain’s environment
Environmental market principles workshop
The NFU convened an industry stakeholder event, bringing together industry figures from farming, project developers, finance and government. Read: NFU hosts first-of-its-kind workshop into environmental markets
Cluster farmer workshop
The NFU hosted a workshop for farmer cluster groups and those working with groups of farmers to look more closely into new economic models.
NFU outlines 5 key principles
At the end of 2021, work began on the principles for successful environmental markets. This major piece of policy work focuses on what is needed to ensure that markets are equitable and accessible for members.
Carbon markets assessment
The NFU commissioned a rapid evidence project on carbon markets looking at their stage of development, the potential for members to get involved and how the NFU could assist.
Our manifesto
Our general election manifesto – Farming for Britain's Future – outlines our key asks of the next government to ensure farmers and growers can continue to deliver for the environment, economy and local communities while producing more of the great British food we all enjoy.