Opinion: Be wary when it comes to natural capital markets

The loss of BPS and the lack of suitable Sustainable Farming Incentive standards for our highly biodiverse Herefordshire farm have forced us to review the business.

We have concluded that our small and much-loved suckler herd of Beef Shorthorns is no longer financially viable.

The reality is that changes to support, and the “income foregone” approach, mean that the finances for a small marginal livestock farm no longer stack up unless we scale up.

See also: Defra adds six new standards to SFI scheme for 2023

About the author

Robert Fraser is executive director of the Real Farming Trust and a Herefordshire livestock farmer.

Here he warns against rushing into carbon and biodiversity offsetting arrangements.

We are therefore selling our cattle and exploring other income sources, including diversification, tree planting, and payments for storing carbon or biodiversity net gain.

Moving away from producing high-quality, nature-friendly food for the local community is soul-destroying.

It’s not straightforward, either.

Farming carbon instead of producing food could lock farmers into long contracts, and out of their land, for 30 years or more – but carbon needs to be stored for at least 100 years to make a difference to global warming, and we must reach net zero by 2050.

Complex problem 

And the idea that carbon emitted by burning fossil fuels, which stays in the atmosphere for thousands of years, is the same as biological carbon stored in trees, which may have a short life span, is a ploy to make offsetting sound attractive.

Carbon and nature credits are sold as simple solutions to a complex problem.

The Food, Farming and Countryside Commission is calling for better regulation to ease the path of new nature markets. But how will smaller and tenant farmers fare? 

Small and medium-sized farms, the best for biodiversity, are being forced to intensify or are giving up, like we have done.

Nature markets will favour big landowners, and allow companies to continue offsetting harmful practices.

Farmers are also being priced out of the land market, as outside investors swoop in.

These new markets, backed by government policy, will force people to the extremes: the only viable options seem to be to intensify or “rewild”.

The idea of selling credits to any company wanting to “greenwash” its appearance is not attractive. The ethics really concern me, and I urge anyone considering it to get good advice.

These schemes are only interested in “new” natural capital, not maintaining biodiverse farms like mine. Natural capital markets are also complex.

Where does the power lie between farmer and investor? Who will own the data? Inevitably, that relationship will be extractive, just like it is in the supply chain.


As farmers, we have a fundamental role in reviving nature and soil health, but I doubt that the heart’s desire of some private investors is the restoration of UK biodiversity, or protecting the livelihoods of small farmers and rural communities.

Some local schemes to improve nutrient management at catchment scale may have value, but generally I think we should tread cautiously.

Investment should be going into agroecological farming – supporting small and medium-sized nature-friendly farms to address the multiple crises we now face across food, climate, biodiversity and health. 

That is how we will build local resilience to climate and food security shocks.

But as it stands, the funding is not there, especially for upland/marginal livestock farmers. Yes, Defra has recently announced payment changes for upland farmers, but much more needs to be done.

Farmers are at the heart of rural life; we have strong ties to the land. This is not just about the money. It is time the flawed concept of carbon and biodiversity offsetting was kicked into the long grass once and for all.

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