Mon 23 May 2022
Rural specialists at Shouler & Son are cautioning farmers and landowners against the short term appeal of the mini-industry of carbon offsetting that has sprung up in the current climate of Basic Payment Scheme (BPS) uncertainty.
The warning comes from the firm’s rural services experts who have observed a ramping-up of campaigns by businesses who are targeting farming and landowning interests this autumn in seeking to acquire parcels of land quickly and offering streams of income from various offsetting uses.
While these businesses are offering legitimate services and alternative revenue streams are going to be attractive in a time of farming and economic uncertainties and climate change environmental pressures, Shouler & Son is advising landowners not to act in haste.
In acknowledging the attraction of a ‘quick-fix’ scheme for selling-on offsetting interests, the firm’s rural services professionals are keen that farming, estate and landowners take a less short term view of any potential ‘offsettable’ land assets.
As Shouler & Son points out, the term such ‘offsettable’ assets does not just refer to land used for farming operations but also wetlands, peatlands, hedgerows and trees.
Angela Wood, professional associate, explains, “It would be folly in the prevailing rural climate not to factor-in offsetting landholdings in any business management plan.
“All indicators do point to it as a growing market of assets that will only increase in value.
“However, it is a relatively new area of business when it comes to significant revenue streams and farmers and landowners should always look to the longer term.
“The market is not yet developed to a point of sophistication and city investment institutions have yet to get to grips with it as a formal and proven, bankable asset class.
“In explaining our present advice to our agricultural clients, we draw a parallel in asking the question whether they would sell their forage or feed barley if they needed it.
“The considered view of professional peers is that all foodstuffs, products and services associated with the countryside will, at some point, be subject to a carbon footprint rating in satisfying wholesale or retail requirements.
“If carbon or other natural capital has already been sold on, then the carbon status of the farm or estate business could be considered less than positive - neutral at best - under current units of carbon status measurements.
“This could leave operators exposed in those business terms.
“Farmers and landowners who can resist the initial impulse to sell now - however attractive the current offer from offsetting seekers - will be better placed to capitalise on the offsetting values of their business holdings in the future.”
For more information on Shouler & Son’s rural services and professional advice, contact see shoulers.co.uk/pages/agricultural-services.