Environmental markets – the NFU’s 5 key principles

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The NFU has been exploring the scope of environmental markets as a potential source of diversified income for members for the last two years. Find out about the 5 key principles we've outlined as essential for success in these markets. 

There is much discussion in farming around the potential of environmental markets, ranging from the confused to the hopeful and the highly optimistic.

The NFU has been working for the last two years to bring some clarity to these rapidly developing markets. You may have heard NFU President Minette Batters talk of market opportunities for water management projects, biodiversity and of course, carbon storage.

Carbon markets assessment

Over the course of 2021, the NFU commissioned a rapid evidence project on carbon markets looking at their stage of development, the potential for members to get involved and how the NFU could assist.

This provided a good understanding of the complexities inherent in new markets with multiple players, where there are many questions yet to be answered.

5 key principles

At the end of 2021, we established 5 key principles necessary for successful environmental markets. These principles are underpinned by detailed policy recommendations:

  1. Environmental markets must work alongside the domestic production of food, energy and fibre.
  2. Public policy and government initiatives must support the development of private markets.
  3. Environmental markets require clear rules and standards to allow farmers and buyers to participate with confidence.
  4. Markets should be accessible across a range of farm sizes, tenures and business structures.
  5. Farmers must be fairly rewarded for the delivery of environmental goods.

Collaboration through cluster farmer workshop

In July 2022, the NFU hosted a workshop for farmer cluster groups, and those working with groups of farmers, to look more closely into new economic models.

Members shared their experiences of entering environmental markets where baselining, project development costs and the need for land sharing solutions as opposed to an exclusive focus on land sparing were key areas of discussion.

Environmental market principles workshop

In November, the NFU convened an industry stakeholder event, bringing together industry figures from farming, project developers, finance and government.

The event aims to explore the opportunities and challenges for agricultural businesses and investors which must be addressed in the design of new markets and to drive some consensus on solutions for policy, investors, intermediaries and farmers.

Keep checking this page for more updates on how we are exploring these markets on behalf of farmers.

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