The sudden closure of the SFI scheme has understandably shocked and angered farmers in England. It has been described as a reset moment by Defra Ministers, who could scarcely be clearer about the competing pressures on the public purse, and need for farmers to be less dependent on taxpayer support in the future. It should be seen as a wake-up call that a sustainable future for the industry does not lie in transitioning to production-limiting, subsidy-dependent regenerative agriculture. Our farming industry must heed the signals from government, and seize the initiative to help shape a more outcomes-focused regime, framed around clear, long-term objectives to increase our domestic food security while reducing agriculture’s environmental footprint. The APPG on Science and Technology in Agriculture has set out a 30:50:50 vision to increase domestic agricultural production by 30% by 2050, while reducing farming’s environmental footprint by 50%. It warrants serious consideration by industry and government alike, argues former NFU and CLA chief economist, Dr Derrick Wilkinson.     

 

Last October, I penned an article for SSA describing Lloyds Banking Group as ‘rather reckless’ for encouraging its farmer customers down an uncertain path of transition to regenerative agriculture, through its support for the Soil Association Exchange programme, which Lloyds’ own report acknowledged would result in much lower levels of food production.

 

Here’s what I wrote:

 

“Surely a major lender in the agricultural sector would instinctively want farmers to be more efficient and innovative, embracing new technology, and above all producing stuff they can sell, rather than backing an agroecology-led agenda, and banking on the bitcoin-style promise of future carbon markets, or on successive future UK governments’ willingness to use public money to support farmers (and landowners), potentially at the expense of health, education, social care etc?”

 

A recent paper in the journal EuroChoices by Yelto Zimmer et al provides further evidence (if it were needed) that most proponents of regenerative agriculture are “massively overselling” its climate change mitigation potential. The authors highlight the importance of accounting for ‘leakage’ caused by the adoption of regen ag systems – where lower yields lead to land conversion and emissions elsewhere. 

 

Significantly, the EuroChoices study also notes that regenerative farming practices are largely dependent on subsidies. It suggests as an alternative that adopting sustainable intensification practices such as improving nitrogen use efficiency “offers stable, measurable results without yield penalties or the need for continuous financial compensation of growers.”

 

I will resist the temptation to say, “I told you so”, but it would be interesting to know what Lloyds Banking Group has to say to those farmer customers who failed to get their Sustainable Farming Incentive (SFI) applications in before the shutters suddenly went down on the scheme, and who now also have significantly less food to sell. 

 

The combination of changes to inheritance tax relief, accelerated cuts in Basic Payment Scheme payments, and now early closure of the SFI scheme, is understandably sending shockwaves through a farming industry accustomed to receiving largely unconditional taxpayer support.  

 

But these are changing times. Defra ministers could scarcely be clearer in the signals they are sending about the competing pressures on the public purse, and that they want farmers to be more profitable in their own right, and less dependent on taxpayer support in the future. 

 

Ministers have also described the sudden closure of the SFI scheme as a ‘reset’ moment for farm policy, with reports that the Labour government is understood to favour a system which incentivises farmers to deliver measurable public good outcomes, rather than the system they inherited which simply pays farmers for adopting certain land use or management practices. 

 

It is timely that a public consultation on a future Land Use Framework for England is also under way. The outcomes of this consultation must be umbilically linked to the future shape and direction of farm support. 

 

When the weight of scientific evidence favours more of a ‘land-sparing’ approach to deliver the best outcomes for food production, biodiversity and the climate – ie optimising food production on as small a land area as possible to leave more room for intact nature and carbon sequestration – it is unthinkable, for example, that future taxpayer support could be used to subsidise lower-yielding farming systems on our most productive farmland.   

 

Phil Stocker of the National Sheep Association was recently quoted as saying: “..it feels like we are approaching our ‘New Zealand moment’ with a potential restructuring of our farming industry and the phasing out of agricultural support.”

 

Well, why not?

 

Sheep farming in New Zealand is a clear example of an industry which has bounced back from subsidy dependence to become one of the most productive and efficient sectors in the world. In the mid-1980s, before farm subsidies were withdrawn, New Zealand’s breeding ewe numbers totalled 70 million. Today that figure is closer to 23 million, yet the country’s lamb production has remained at similar levels.      

 

In place of subsidy payments to individual farmers, taxpayer support in New Zealand has concentrated on supporting the R&D, knowledge exchange and physical infrastructure needed to boost sustainable gains in agricultural productivity, with a core focus on access to improved genetics.    

 

Writing as a former chief economist at both NFU and CLA, I would not advocate the kind of short-term transition which New Zealand underwent in the mid-1980s. But I do believe our farming industry must heed the signals coming from government, and seize this reset moment to help shape a more outcomes-focused regime, framed around a clear, long-term objective to increase our domestic food security while reducing UK agriculture’s environmental footprint. 

 

Speaking as chair of the All-Party Parliamentary Group on Science and Technology in Agriculture, former science minister George Freeman MP called recently for a ‘180-degree, tyre-screeching’ reboot of UK farm policy to help Britain’s farmers produce ‘more from less.’ 

 

More food, with fewer inputs, less greenhouse gas emissions and a reduced environmental footprint.

 

I completely agree. 

 

The next 25 years are forecast to be the most critical yet in the history of global agriculture, with the world’s population set to exceed 10 billion, with increasing pressure on the planet’s finite natural resources, and with heightened urgency to reduce farming’s climate impact. 

 

Farmers everywhere must produce ‘more with less’. There’s no free pass. 

 

Of course, Mr Freeman’s comments came before Defra Ministers announced on 11th March that the 2024 SFI budget was spent up, and that no further applications would be accepted until a new scheme re-opens later in the year, after the June spending review.    

 

This makes a radical overhaul of domestic farm policy even more pressing. 

 

The All-Party Group has proposed a high-level Innovation Agenda for UK Agriculture, with an ambition to increase domestic agricultural production by 30% by 2050, while reducing farming’s environmental footprint by 50% per unit of output, in terms of greenhouse gas emissions, land use, water use and soil health. The 30:50:50 agenda. 

 

The proposal identifies the need for a consistent, science-based approach to the collection and integration of farm-level data to benchmark and monitor progress against the 30:50:50 objectives, and to provide a single metric for consumers, policymakers and the food chain.

 

It will also require major reform of farming and land use policies, more enabling regulation of new agricultural technologies, and a re-organisation of our fragmented R&D landscape to focus on the delivery of innovation and translation into practice against the 30:50:50 objective. 

 

But in these challenging and uncertain times, it is a vision I fully support to help individual farmers optimise their resources to deliver both the environmental and food outputs demanded by society. 

 

It will also provide clear, demonstrable evidence to taxpayers that public money is being used to support the delivery of desired outcomes.

 

Let’s hope both industry and government are listening. 

 

Dr Derrick Wilkinson is a retired UK economist with nearly 40 years’ international experience with the development, analysis, integration and coordination of global trade, environment and agriculture policies. A former chief economist at both the NFU and CLA, he is the author of numerous pioneering papers and research projects published, including in major peer reviewed journals.