Financing a Farming Transition

If we hope to meet the UK’s environmental improvement and net zero targets, the majority of farmers will have to transition to nature-positive and low-emission farming practices in the decades ahead. This transition must not threaten the UK’s food security, and it must also maintain or improve the profitability of farmers.

Changes in subsidy schemes, such as the Environmental Land Management subsidy schemes in England, that will pay farmers and land managers to deliver climate and environmental improvement interventions alongside food production will help support the 70% of farm holdings that the new schemes are hoping to cover, but there is a need for greater financial support for the farming transition

As part of a work package commissioned by Defra, the Green Finance Institute has been working with the finance, agrifood and farming sectors to support the flow of private sector finance to farmers be that through banking products, payments from food retail and manufacturers, or through payments for ecosystem services such as carbon sequestration or biodiversity net gain.

In March 2023, GFI launched the Financing a Farming Transition report – the culmination of a six-month exploration with a Strategic Working Group to identify barriers and provide recommendations to unlock private sector finance at scale. The Group identified four key enablers in addition to a broader set of recommendations. The report can be found at the bottom of this page.

Based on the success of the Investment Readiness Toolkit, and to support the recommendations of the report, the GFI has now developed a Farming Toolkit – providing guidance for farmers considering entering into natural capital markets. It accompanies NEIRF Round 3 – a funding pool from Defra for England’s farmers to develop projects that access nature markets (also a request from our report).

Co-Chairs

Mark Suthern
Non-Executive Director of the Environment Agency and the Rural Payments Agency and Chair of the Farming Community Network. Previously the Managing Director for Agriculture at Barclays UK

Stuart Roberts
Cereals, beef and sheep farmer at Hammonds End Farm in Hertfordshire. Former deputy president of the National Farmers Union. Prior work in the Ministry of Agriculture, Fisheries and Food, the Food Standards Agency and DEFRA