Environmental Land Management Schemes - an Introduction

Key information
  • The Government will roll out 3 new Environmental Land Management Schemes in various stages from 2022, aimed at all levels of land from single parcels up to 5,000ha projects
  • Local Nature Recovery Schemes will replace the Countryside Stewardship scheme from 2023
  • The Landscape Recovery Scheme aims to develop and fund the largest-scale eco projects, in order to create at least 20,000ha of wilder landscapes and habitats

The composition of our land is vital to the ongoing fight against the climate emergency. Green, wild and natural spaces all contribute to the reduction of emissions, whether by carbon sequestration or through the restoration of key habitats. The UK, however, is one of the most heavily farmed countries in Europe, and has numerous large urbanised areas. In order to redress the current, untenable imbalance between farmed and natural land, the Government is implementing a series of schemes to incentivise landowners to literally 'recover nature'. Aiming to bring up to 60% of England's agricultural soil under sustainable management by 2030, the Schemes will cover a huge amount of land and affect a huge number of landowners.

Much like the English countryside, the current legislative landscape can seem like a confusing patchwork quilt of Acts, schemes and initiatives. This guide will take you through the three main environmental land management schemes, whether you're eligible and how payments will work if you are.                           

What is an Environmental Land Management Scheme?

In short, an Environmental Land Management Scheme (ELMS) is the government providing financial incentive or support for landowners to make changes to their land that produce environmental benefits. They help the government implement environmental outcomes that might not otherwise occur if the farming industry was left to navigate the free market on its own.               

Farmers and landowners, as well as managing their own businesses and supporting their own families, have the power to do plenty of public good with their land. Sustainable domestic food production; improving water quality and biodiversity; driving the adaptation to climate change, all of these are achievable through correct land management. Balancing environmental benefits and the economics of farming, however, can be tricky, and the government's schemes empower rural economies to make choices that benefit both them and the environmental recovery.  

Government intervention to fund the actions that have the greatest possible impact to mitigate the impacts of climate change will come in the form of three main schemes, each operating at a different scale. 

  • The Sustainable Farming Initiative (SFI): targeted at individual holdings or even parcels within holdings
  • The Local Nature Recovery scheme: paying for local-level (e.g. single land manager and up, though sometimes multiple working together) actions to make space for nature in the countryside and on farmed land   
  • The Landscape Recovery (LR) scheme: intended to help fund long-term and large -scale projects such as the creation of new wetlands.       

Why are ELMS being implemented?

For the past 50 years, the diversity and robustness of the UK's natural environment have been declining. In order to increase domestic food production and meet the demand for quality food by the public, more and more land has been given over to agriculture. Since 1970, a 41% decline in species has occurred due to the loss of key habitats, with 80% of the land area in the UK being intensively used for either food production or urban development. As part of its wider pivot to address the climate crisis and meet its ambitions on climate change, including net-zero by 2050 and halting the decline in species by 2030, the Government is rolling out a host of nature-based solutions. The flagship Environment Act 2021 makes these targets legally binding and is the cornerstone for wider guidance from government to achieve positive environmental outcomes, whilst balancing its commitment to supporting farm business. 2022 will see the rollout of the three new Environmental Land Management Schemes designed to provide solutions to climate issues, as well as create green yet profitable farming businesses in the wake of Brexit. 

The Landscape Recovery scheme

The 'top-tier' of the Government's three ELMS, in that it aims to create the largest-scale green projects, the Landscape Recovery Scheme will provide support works that are long-term (20+ years in their duration) and large-scale (500ha to 5,000ha sites). The scheme is open to any individuals or groups who want to work together to deliver such projects. Rather than supporting smaller-scale actions (e.g. creating a single wildlife habitat on a farm) the Landscape Recovery Scheme will provide a platform for more ambitious activities, such as whole ecosystem restoration. The first round of projects aims to focus on projects that both or either:

  • Recover threatened native species and improve species abundance; restore priority habitats and improve habitat quality
  • Restore streams and rivers 

As well as providing long-term funding for these projects, the Scheme will act as a focal point for any landowners who want to work together to create large restoration schemes (e.g. multiple landowners who own land along the course of a river and want guidance on how to restore wetland habitats across their holdings). Unlike the smaller-scale Local Nature Recovery Scheme or Sustainable Farming Incentive, Defra will not set a prescriptive list of actions that it will pay for, and their payment rates. Instead, it will work with the project's stakeholders to negotiate bespoke payment agreements - these will aim to balance value for money with delivering significant climate outcomes whilst attracting private finance to augment government payments. 

Applications for the first round of schemes (~15 projects, with a total project development budget of £7.5 million) opened on the 1st February 2022 and will close on the 24th May 2022. For more information or to apply, go to the Gov website

The Local Nature Recovery scheme

The Local Nature Recovery scheme will pay for landowners to take actions that create space for, and improve, nature on land they own. These comprise a range of paid, nature-positive options, so land managers can choose the right options for their land. The "improved and more ambitious successor" to the Countryside Stewardship Scheme, the Local Nature Recovery scheme aims to reduce bureaucracy, reward collaboration (e.g. between farmers in a local area) and be more precise (e.g. by incentivising for coastal restoration in areas with plenty of coastal habitats). Some examples of actions that the scheme will pay for:

  • Increasing scope for wildlife on arable farms (e.g. by creating shelter or breeding areas
  • Managing, restoring or creating species-rich grassland or other grassland habitats
  • Managing, restoring or creating lowland heathland
  • Measures to support the reintroduction or recovery of certain wildlife species
  • Nature-based solutions for water: creating buffer strips or swales to reduce runoff and create natural flood management
  • Restoring rivers and other riparian habitats 

Though most Local Nature Recovery scheme agreements will be between Defra and individuals, farm clusters can also collaborate and enter agreements to increase efficiency. The projected timeline for the scheme is as follows:

  • 2022: testing. The scheme is to be tested across the year by ~500 land managers, only some of whom will be in existing agri-environment schemes
  • 2023: limited availability. Following initial testing, the scheme will be opened to more participants, to continue testing and tweaking
  • 2024: national rollout. The scheme will be opened to all landowners in England, with provision for them to transition from existing schemes like Countryside Stewardship.

Local Nature Recovery Strategies

Note: the Local Nature Recovery Scheme should not be confused with Local Nature Recovery Strategies. Defra and Natural England communications will often refer to 'Local Nature Recovery' but not specify whether they're talking about the former or the latter. 

Local Nature Recovery Strategies (LNRS) are the broadest-level plans that Government have to shape action for nature. Much like Local Plans apply planning principles from the National Planning Policy Framework at a local planning authority level, LNRSs implement national environmental goals on a regional scale. Each Strategy area will form a node in the wider Nature Recovery Network, a nationwide system of interconnected, wildlife-rich spaces.  Designed for large areas, ~50 Strategies will cover the whole of England, with no gaps or overlaps, and each will, chronologically:

  1. Assess that area's current state of nature and then agree priorities for nature's recovery within the area
  2. Create a map of nature, identifying the most valuable areas, in terms of biodiversity and other metrics
  3. Make specific proposals for creating or improving acres of habitats, in order to meet ambitions for nature.

A collaborative scheme, each Strategy will coordinate action between public bodies, land management businesses and the voluntary sector by setting an overarching plan and having each stakeholder work closely with the authority in charge of the Strategy. By setting a tailored, top-down plan for different areas, responsible parties can draw on collective expertise and coordinate more efficiently. Environmental land management schemes, such as those listed in this article, are an element of the Strategies, as are things like Sites of Special Scientific Interest, or Biodiversity Net Gain.                       

The Sustainable Farming Incentive

The Sustainable Farming Incentive (SFI) is "aimed at farmers, paying for actions that [make farming more sustainable]". The most accessible of the agricultural subsidy schemes, the SFI is aimed at all commercial land holdings and will comprise quarterly payments. Not even the entirety of a holding has to be included in the scheme - the SFI operates on a land parcel (individual field) level so farmers can act with precision, making the best choices for their land, with scope to increase coverage in the future (achieving further green outcomes through land use).

The payment rates of the SFI are based on 'standards' (the category of action being taken) and 'levels' (the extent of that action). There are three standards in the initial rollout beginning in 2022, all aimed at improving soil quality, with more to come:

1) the Arable and Horticultural Soils standard

Introductory level: £22 per hectare.
- test soil organic matter
- 70% winter cover to protect soil
- addition of organic matter to soil 

Intermediate level: £40 per hectare
- test organic soil matter
- 70% winter cover, including land with multi-species green cover covering at least 20% of the land
- addition of organic matter, including multi-species green cover.

Advanced level: to come in 2023 and potential include no-tillage techniques 

2) the Improved Grassland Soils standard

Introductory level: £28 per hectare
- 95% green cover to protect soil (no more than 5% bare ground over the winter months)

Intermediate level: £58 per hectare
- 95% green cover to protect soil (no more than 5% bare ground over the winter months)
- Establish or maintain herbal leys to improve soil health on at least 15% of the land in the scheme

Advanced level: to come in 2023

3) the Moorland and Rough Grazing standard (currently still in the proposal stage)

Introductory level: £10.30 per hectare plus a one-off £265 payment per agreement
- Verify and record soil types, including peatland or associated vegetation
- Evaluate public goods potential and condition of the moorland
- Identify opportunities to maintian or enhance public goods

Intermediate and advanced levels to be rolled out between late 2022 and 2024.

All farmers who are eligible for the Basic Payment Scheme are eligible for the SFI. SFI agreements will last for 3 years, with the opportunity to amend every 12 months, including the ability to increase ambition and coverage (though with little scope to reduce). The Incentive launches in June 2022, with no deadline for applications thereafter. You can use the Addland Professional map layers to research your land and learn everything from soil type to nitrate vulnerable zones, potentially key information when deciding what element of the scheme to apply for.   

Timings and payments

  • Landscape Recovery Scheme: first round of applications to close May 2022
  • Local Nature Recovery schemes: limited rollout in 2023 and national rollout scheduled for 2024
  • Sustainable Farming Incentive: launching nationally in June 2022, with 3 standards. More standards, covering other aspects of farming, will be introduced incrementally between 2023 and 2025.
  • For a complete timeline of Defra's numerous projects, see this government table

The business of environmental land management is complex and draws on expertise from across the land industry, as well as involving a huge range of land types. Thankfully, Addland is the single destination to find, buy, sell or research land. From finding land to apply for payments on, to keeping abreast of key legislation, you can do it all on Addland.com. 

Published: 19 April 2022
Last updated: 06 February 2023

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