Farming Smarter: Investing in our future

By Jane Campbell

25th March 2021

As the world begins to emerge from the constraints of the pandemic, the upcoming UN Climate Change Conference (COP26) will focus minds on ways the UK can lead global change in tackling the climate, health, nature, and economic crises.

Today FFCC publishes a new report, Farming Smarter: Investing in our future, urging government to establish an Agroecology Development Bank which would serve a distinct and specialised role in agricultural and rural transformation. It provides a ‘win-win’ for UK governments by helping deliver against climate and nature ambitions and, at the same time, helping the agricultural sector to thrive.

Governments have, in the past, kickstarted transitions to cleaner energy, housing and transport, acknowledging that the market alone is rarely capable of making the bold moves needed to accelerate change. The same shift is now needed for agriculture.

Agroecology works with nature, and harnesses innovation and green technologies to improve climate and health. This approach to farming is increasingly being adopted by farmers who, in addition to wanting to farm more sustainably, see its potential to improve profitability given the huge reductions in input costs.

But there remain significant barriers to change – particularly for young and new entrants, tenant farmers (40% of the sector) and horticulture businesses - due to a lack of the right kind of private finance available at the pace and scale required.

Farming Smarter: Investing in our future suggests that a new bank, complementary to the British Business Bank, the newly established National Infrastructure Bank, the Scottish Investment Bank and Development Bank of Wales, could be game-changing in terms of encouraging rapid change and meeting UK climate goals.

What could a transition to agroecology mean for UK nations?

Agriculture and land use change account for almost a quarter of global emissions and are among the biggest drivers of biodiversity loss. These bleak statistics could be reversed by a transition to agroecology which would:

  • help avoid increasing global warming beyond 1.5C above pre-industrial levels
  • contribute to the UK becoming carbon net zero by 2050 (reducing greenhouse gas emissions from agriculture by at least 38% with potential to offset 60%+*)
  • enable UK countries to grow more of their own food (thus improving food security)
  • create a sector filled with knowledge intensive jobs among many other benefits.
How can an Agroecology Development Bank support this?

Farming Smarter: Investing in our future considers how public and private finance can be unlocked to meet the challenge of an agroecological transition. The report sets out prospective arrangements for an Agroecology Development Bank to overcome the barriers some farmers face in accessing funding and some of the issues particular to this moment in time. It proposes that, in addition to being the primary institution for innovative financial products tailored to support a rapid transition to agroecology, the bank would have the remit to generate, curate and share knowledge on agroecology, in particular outcome measurement and verification in order to underpin finance – and to contribute to government’s environmental objectives.

Has the UK established a financial institution like this before?

The report draws comparisons between the investment made in offshore wind farms pointing out that – like agroecology – offshore wind was economically viable but was an early-stage technology with minimal financial track record or historical performance data. The Green Investment Bank acted as a centre of expertise, crowding private sector finance to support profitable but unproven projects. The barriers were similar (skilling up staff, developing technical expertise, collating data and evaluating risk) and broader than just a question of availability of capital at the right price.

Unlike wind farms, agroecology has multiple yields and impacts, extending beyond food products to timber and textiles, and across environmental outcomes from carbon sequestration to biodiversity restoration. All of this adds weight to an argument for an institution capable of managing the complexity of the opportunity agroecology offers the UK.