Natural capital brings opportunity for new wealth streams

Posted by LindaStenner on August 12, 2019

Natural capital brings opportunity for new wealth streams

August 12, 2019 at 3:29 PM

Farmers looking for new sources of income could benefit from public and private sector cash for environmental services in the future.

The Environmental Bill announced in December 2018 makes provision for delivering environmental services such as managing land and water for wildlife and cultural and natural heritage; supporting public access; climate change mitigation; animal health and welfare and plant protection.

Kathryn Williams of Davis Meade Property Consultants says the details of how these services will be delivered and the benefits measured and paid for are yet to be determined but farmers and land managers should take advantage of any opportunities to bring in income that could be lost post Brexit.

“It also possible that there will be cash from private sources too in the future, perhaps for opening up your farm to the public or for private events or for planting trees for cash from companies looking to offset their carbon footprint,” Kathryn said.

“For example, in the uplands of Wales you could build a case for environmental services. What if lambs lose support payments and the French export market goes post Brexit, maybe the best thing to do is to plant trees, especially if someone pays for it.”

Utility companies might pay for natural asset management to protect their operational assets, for example a water company might fund changes to farming practices as payment to secure ready supplies of good-quality water.

Farmers might be paid for natural flood management and drainage to protect railway lines vulnerable to weather and flooding.

The government has committed to require developers to demonstrate a 10 per cent net gain in habitat value for wildlife for certain projects. This could potentially involve paying farmers to manage land in longer term environmental schemes.

More recently the government announced it is to enable ‘conservation covenants’, a new form of legal agreement which will secure environmental benefits and bind future landowners as well as the current ones who make the covenant in the first place.

“What price you put on such services is yet to be determined but good advice will be needed to ensure there is a strong legal agreement in place between both parties,” Kathryn said.

“There could be tax consequences too, such as eligibility for entrepreneurs’, holdover and rollover reliefs. And will the land continue to qualify as agricultural and business property for inheritance tax reliefs?

“Tenant farmers will have to make sure they don’t breach their tenancy and we don’t yet know how these new environmental income streams will affect the value of land.

 “We are at a very early stage yet with natural capital. At the moment industry is not obliged to be carbon neutral but when industry does become legally bound to offset its carbon footprint the money could flood in,” she added.

For further details contact Kathryn Williams at Davis Meade Property Consultants, Oswestry on 01691 659658 or email

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