How Does the Environment Act Impact Farmers?
The new Environment Act, building on the regulations previously implemented by the EU, has been two years in the making. It’s a revolutionary change to the regulations that hold the UK government, farmers, and others accountable over environmental issues.
Land Based Underwriters have outlined some of the key areas of concern or opportunity for farmers, particularly in terms of environmental liability.
Water
- Abstraction licenses: The Environment Agency (EA) will be able to amend or revoke licenses without liability or compensation from 1 January 2028.
- New objectives and targets: The Government is setting targets to reduce pollution from agriculture, wastewater, and abandoned metal mines, and to reduce water demand.
Biodiversity Net Gain
- Increasing demands on land: Competition for land to farm will increase as the UK Government’s new Biodiversity Net Gain targets aim to deliver biodiversity and forestry.
- Sustainable Farming Incentives (SFI): Changes to Basic Payment Scheme (BPS) payments will be the key driver for delivering agricultural Biodiversity Net Gain targets.
- Conservation covenant agreements: These agreements will now need to be executed as deeds, giving Net Gain or even carbon sequestration opportunities a greater legal standing.
- Biodiversity reports: Reports on actions taken and their impact to deliver Net Gain and nature recovery networks will need to be created every five years by local authorities.
Air Quality
- New targets: The first of the Government’s air quality targets will aim to reduce the annual average level of fine particulate matter (PM2.5) in ambient air, which can be produced by ammonia from agriculture.
- Beef and dairy permits: From 2025, ammonia permits, which currently apply to the intensive pork and poultry sectors, will come into place for intensive beef and dairy herds.
Waste & Waste Crime
- Single-use plastic charges: New charges for single-use plastics are likely to apply to all products and could include on-farm plastics such as silage wrap and crop cover. The Act will encourage the use of plastics with a recycled content or non-plastic alternatives.
- Waste crime: Measures to ensure agencies and authorities work more effectively to combat waste crime will come into force, and these are long overdue for many farmers and land managers.
How Can Farmers Prepare?
We recommend that environmental insurance brokers relay the following advice to their clients:
1. Review your abstraction licenses. If licenses are not being used, you should consider giving them up voluntarily. However, if they are needed to irrigate crops or to provide water for livestock, to help understand your usage patterns and support licensing requirements, it may be worth fitting simple flow meters.
2. Make sure your opinions are heard. You could provide input on the new legislation through anybody that collectively represents you at a national level.
3. Understand the impact of the changes. Investigate how changes to BPS payments and the new SFI scheme could impact your business and identify opportunities for funding for nature recovery activities.
4. Ensure robust records of your farm business. Make sure records for beef and dairy herds are robust, in preparation for new permitting rules becoming law.
If your clients are concerned about the impact of the Environment Act on their business, Land Based Underwriters offer environmental insurance policies which can protect them against this new legislation. For more information about our insurance policies, please get in touch.