Farmers are being encouraged to prioritise sustainable farming practices as both regulations and customer expectations are expected to become stricter. Vicky Povey, an agribusiness expert at Fisher German, emphasises that farmers should consider the natural environment when reviewing business strategy/goals and understand how best to utilise their natural capital assets to help meet both long- and short-term business goals.

With major corporations facing tighter carbon reporting regulations, their Scope 3 emissions – those from their supply chains - are also under increased scrutiny.

Consequently, customers for cereals and grains, such as large food producers, are increasingly interested in the carbon footprint of the farm businesses they purchase from.

Recently, cereals and grains from farms that measure their carbon footprint have been rewarded with premium prices. However, it is anticipated that these practices will soon become the industry standard. Will standards get higher and ask that farms not only measure but also look to reduce their carbon footprint by demonstrating regenerative practices?

This shift means providing sustainability credentials will no longer be an added value but a necessity, making it essential for farmers to meet these evolving standards to retain key customers.

While farming is undoubtedly challenging at present, implementing sustainable practices can be seen as an opportunity to make land as resilient as possible and protect it for the future.

Regenerative farming, which aims to build soil health and improve the water cycle, is one method to achieve this. Farms that adopt regenerative practices should increase their soil organic matter levels, making them more resilient to environmental impacts such as extreme weather events which we are experiencing more often.

Soil organic matter is a crucial carbon store, helping to reduce the amount of atmospheric carbon dioxide. Farms can now commission companies to conduct detailed analysis to measure how much carbon is being sequestered in its soil over time.

Some farms may find that their captured carbon equals or exceeds their yearly emissions. If there is a surplus, farms can sell this on the private market to those looking to offset their emissions.

Although providing such information to customers may soon become necessary, soil testing can be a high and seemingly unnecessary cost to many, while the government subsidy through the Sustainable Farming Incentive (SFI) scheme is only £6 per hectare. Therefore, it is clear that the government needs to step up and do more to support farmers in this area.

However, there are also a number of alternative desktop tools which will give natural capital assets a value. Although this doesn’t represent an accurate monetary figure, it is useful when assessing whole business strategic decisions and can be an alternative to soil testing at this early stage when looking to provide customers with the data they require.

Regenerative farming is not just about compliance but also ensuring resilience. Early planning is essential to stay ahead of the curve.