The Need to Understand the Financial and Climate Impacts of Regenerative Farming

It’s often cited that there’s limited, robust evidence for the financial and climate impacts of adopting more regenerative farming practices. This article explains our recent work to explore the evidence base and conduct financial analysis on regenerative farming practices.

Context

The UK market for ecosystem services, including carbon offsetting, has been developing rapidly over recent years in response to the growing urgency of the climate crisis and rapid loss of biodiversity¹. With 70% of the land mass in the UK under agricultural production², farmland managers are being encouraged and incentivised towards more nature-friendly farming practices. As such, new revenue streams are opening up, from public and private sectors, which are looking to meet statutory or voluntary greenhouse gas emissions and nature restoration outcomes³.

Yet, it is still often cited that there is limited, robust evidence for the financial impact of adopting more regenerative farming practices. This uncertainty poses a significant obstacle to more widespread adoption⁴. Alongside the lack of robust evidence around the financial impacts of many regenerative farming practices, there is also often a knowledge gap which affects the effectiveness of practice adoption. This gap is being addressed as practitioners learn more, share their experiences, alongside greater research that’s happening on how best to implement these practices. It is certainly true that research into the impact of these practices in the UK is in its infancy, with farmers often leading the way in investigating their impact in the field.

What we did

To respond to this challenge, SOS-UK commissioned the Farm Carbon Toolkit, using funding from NEIRF, to conduct financial modelling on the costs or benefits to farm businesses of adopting a range of regenerative farming practices. This work supports SOS-UK’s Farming for Carbon and Nature Project, providing a better evidence base to explore ‘carbon insetting’ opportunities for university and college farmland across the UK. Carbon insetting describes the approach when actors within a value chain collaborate to reduce the total greenhouse gas emissions, and may involve interventions in the financial relationship or transactions between those actors.

This work builds on previous work that’s explored the financial implications of shifting to regenerative or agroecological farming (such as the Cumulus report for the Soil Association⁵) in two key ways. First, it gives granular data on specific regenerative farming practices, whereas previous modelling work was based on farm-level or food-systems level outcomes. Secondly, it incorporates payment rates for the recently confirmed Sustainable Farming Incentive in England (January 2024 rates).

FCT approached this task through:

Evaluating the most up-to-date and comprehensive research into the carbon, climate and financial impact of the adoption of an agreed suite of farming practices considered as “regenerative”.
Developing farm models for three key farming systems – dairy, arable and lowland beef and sheep farms based on data within the Farm Carbon Calculator database which enabled us to identify the impact on farm greenhouse gas emissions from adopting more regenerative farming practices and systems.
Developing partial budgets for the adoption of key regenerative farming practices using information from key industry sources and innovators in this space.

For the first time, we have been able to bring in real-world data from the Farm Carbon Calculator to demonstrate the impact of practice change on-farm GHG emissions.

Click here to read the report in full

In the next two articles on this topic, we explore: