As world leaders, private jets and aviation fuel smog disappear into the skies over Glasgow, we reflect on COP26. Was it a cop out there, a fair cop or a copulate?
There was a lot to applaud, but the confusing “phase-down” messages made it difficult to decide which Amazon villain was the target of the reduction.
Was it extreme capitalist behavior, like Jeff Bezos soaring into space, or “catch-up capitalism,” like Brazilian President Jair Bolsanaro destroying “his” rainforest?
As a proponent of conservation agriculture, COP26 left “my” arable sector largely alone.
This is not the case for those who raise beef and lamb. You have every reason to be extremely upset and to feel poorly represented by participants, journalists and the media in general.
Basically, COP26 threw Brazilian feedlot-raised beef and pasture-fed British cattle into the same “blah, blah, blah” basket.
See also: How tenants could benefit from natural capital initiatives
But despite all the talk, the global temperature reduction promises start with all of us doing our part. I’m not going to switch my Land Cruiser to a Tesla yet, but we’re looking to reduce fertilizer use by 20%.
So what about our production methods? Will a carbon footprint encourage change?
It is much easier for me on grade 3 clay with flints to switch to a conservation approach of no-till farming, cattle grazing and cover crops, and being rewarded with credits of carbon than it would be for a farmer in Fenland who grows root vegetables or leeks. .
I was led to believe that the carbon market was full of sellers of snake oil, and setting standards was “like trying to nail something to jelly.”
But, despite all my skepticism, I found the audit process straightforward and the credits not too difficult to claim.
However, all of my research into the pitfalls, exit clauses and warnings made me reflect on how the results of COP26 and carbon may influence the future of much of UK farmland, but can -be not the way you might think.
While Brewdog can turn the Scottish Highlands into a carbon offset forest, planting trees is not the only solution.
Arable land and meadows are finally recognized as a future carbon credit klondike. For owner-occupiers, it’s simple, but for sharecroppers like me, there’s an added complexity
Arable land and meadows are finally recognized as a future carbon credit klondike.
For owner-occupiers, it’s simple, but for sharecroppers like me, there’s an added complexity.
Entering land into a program to create a high-quality carbon credit may require permission from the owner.
But what if the owner decides that in order for the tenant to meet the carbon offset values of their estate, they must cultivate in a way that captures the credits?
No soil inversion and a cover crop requirement could be imposed.
The credit value could be fractionated, but it is conceivable that how we farm becomes the owner’s choice.
On a more positive note, carbon credits could spell the end of short-term leases for farm businesses, with the owner requiring longer-term leases to benefit from 10-year carbon programs.
With the disappearance of the basic payment scheme, a potential income of two or three credits per hectare worth $ 29-33 per credit cannot be overlooked.
Indeed, software mogul Bill Gates claims the true value of carbon is closer to $ 200 / t. I might be able to afford the Tesla after all.
Ian pigott
Farmers Weekly Opinion Writer
Ian Pigott operates 700 ha in Hertfordshire. The farm is a demonstration unit of the Environment and Agriculture Liaison. Ian is also the founder of Open Farm Sunday.
How tenants could benefit from natural capital initiatives
Tenancy agreements mostly rule out long-term environmental schemes such as tree planting and rewilding.
However, generating an income from carbon offsetting and sequestration, nutrient neutrality units, biodiversity and third-party access is possible in some cases.
Although there are restrictions on how tenants can capitalise on the natural capital assets on their farms, Philip Meade, director at Davis Meade Property Consultants, said there is a widely held misconception that environmental initiatives are based on long-term agreements that rule out tenant farmers.
“This is not necessarily true, especially if you have a good landlord/tenant relationship that you are prepared to work on. But even if you have a fractious relationship, there are still opportunities to be had,” he said.
See also: Natural capital on farms – what it is and how to value it
“There are things you have to be careful of with tenanted farms, but it doesn’t mean that all natural capital opportunities must be completely written off.”
What natural capital opportunities exist for tenants?
Carbon offsetting schemes can be as simple as changing a crop grown – for example, switching from growing winter wheat to spring oats can significantly reduce a farm’s carbon footprint in a year, Mr Meade explained.
“Spring oats are not as profitable as winter wheat in many senses, but if there is a local business that is prepared to pay a farmer to grow them and take credit for that carbon offset then there is an opportunity for a relatively short-term contract that a tenant might sign up to.”
A voluntary carbon market for individuals is also gaining traction.
“The Greta Thunberg generation, who are very conscious about their carbon footprint, are more likely to pay to offset their carbon – for example, someone who wants to fly to New York for the weekend but feels guilty, might pay a farmer or landowner for carbon offsetting to offset their conscience,” said Mr Meade.
This could take the form of paying a farmer to grow different crops or minimising tillage operations.
Another possibility is nutrient neutrality – landowners and farmers in certain catchment areas can be paid to reduce nitrogen and phosphate run-off into a river to offset any increase caused by development.
What terms do I need to be aware of in my tenancy agreement?
The tenancy agreement will stipulate what is permissible and should be the first port of call when considering a natural capital opportunity.
Look for the term “user clause” in an Agricultural Holdings Act (AHA) tenancy or a farm business tenancy (FBT); this typically states that the farm can only be used for agricultural purposes.
“The growing of trees, with a few minor exceptions, is probably not going to be allowed and neither is turning the whole of the farm over to rewilding,” said Mr Meade.
But growing crops will usually meet that requirement, although modern tenancies often state that a crop must not have a cycle of longer than 12 months.
The “alienation clause” is another one that will apply in this situation.
Mr Meade gave an example of how this might apply, citing an actual agreement in which a GP surgery had paid a farmer to convert a block of woodland into an area for reflection for its patients.
“This wouldn’t necessarily breach the alienation clause of ‘part with possession of’ which covers subletting,” he said.
However, it might be in breach of the user clause, although Mr Meade emphasised that it is always worth tenants having the discussion with their landlord.
The rules of good husbandry are often written into farm tenancies and require tenants to undertake good husbandry as set out in the 1947 Agriculture Act.
Rewilding, in which nature is allowed to take back large areas of your farm, would not be compliant with good husbandry and so would risk breaching a tenancy agreement.
Mr Meade said farmers should seek advice if they are unsure of how to interpret these terms.
Do I need to involve my landlord?
Engaging and involving the landlord is always preferable to working against them, especially as buyers of natural capital assets will want a long-term commitment that a tenant often cannot give.
“If you are constantly looking over your shoulder and worrying that you are in breach of a tenancy agreement and your landlord is looking for ways to catch you out and serve you with a notice to remedy or notice to quit, then it is going to be very hard to get any natural capital investor interested in partnering up with you as a tenant, so engage and involve your landlord, if possible.”
If not, there are still opportunities, but they may be more limited, he added.
Can a scheme result in a rent rise?
Mr Meade said it is reasonable for landlords to expect a return on capital, usually in the form of an additional rent payment, if they are prepared to work with their tenants on projects and provide capital expenditure.
However, if a tenant is paying for the investment and doing the work to get the natural capital opportunity in place to replace what is being lost under the Basic Payment Scheme (BPS), then it will be harder to justify an increase.
Under the terms of an AHA tenancy, the question will be “has the productive and related earning capacity of the farm increased?”. These are definitions in the 1986 AHA Act that are key to any rent review.
“If the BPS has gone down by 50% and you are just replacing that with an opportunity to partner up with your local doctor’s surgery, then if the overall productive and related earning capacity of the farm has not really changed, then just because you are making a bit of money in a different way, is that an excuse to put the rent up? I think the answer is generally no,” said Mr Meade.
“There is little reason to expect significant rent increases unless the landlord is making a significant contribution as well.”
Can my succession rights be at risk?
Applicants for succession under an AHA must have earned their income from agricultural work on the holding; if the farm becomes hugely diversified and there is little agriculture involved, that could jeopardise a succession application, unless agreement is reached in advance with the landlord.
Document what is agreed
The advice in this article covers tenancies in England and Wales.
Where an activity is prohibited by the terms of a tenancy agreement, the documentation to vary it must be in the form of a licence from the landlord.
Where there is no absolute prohibition, then a letter from the landlord to give permission for an activity or change will normally suffice, says Philip Meade. In either case, professional advice should be taken, he warns.
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