In this article, Phil Thompson, CEO of Balance Power, discusses finding financial resolution for farmers in renewables.
The last year has been exceptionally challenging for farmers. They are facing the escalating cost-of-living, energy crisis, and now food inflation, where we are seeing the most significant costs with the ‘three Fs’ – feed, fuel, fertiliser. As a result, farmers are bearing the brunt of this financial pressure.
In such times, it is natural to look to the UK government for a resolution to this omni-crisis.
So when a freedom of information request obtained by The Guardian found that only 224 farmers were paid under the Government’s Sustainable Farming Incentive (SFI) as part of the Conservative government’s plan to replace EU farming subsidies, the industry was dealt yet another blow.
The risk of relying on government support
Post-Brexit, support and accessible subsidies for British farmers has been sparse.
Of the eligible farmers for the SFI, approximately only 0.22 – 0.28% received pay-outs.
In the wake of this, the minister for farming, Mark Spencer, announced an additional £1,000 per year for taking nature-friendly action, aimed at covering the cost of taking part in the initiative.
But this only managed to produce a lukewarm response from the community, with Zoe Leach, East Anglia regional director of the NFU saying the latest move “risks being too little too late”, and that unfortunately, “NFU members know more about what they will lose in direct payments than what they will gain from taking part in these new schemes”.
The message from this is clear: relying on government support is only becoming riskier for farmers.
But this need not leave them in limbo. There are ways in which farmers can diversify their income streams without relying on government support, which thus far has been less than forthcoming.
Resolution in renewables
As farmers face new challenges with our volatile economy and rapidly changing climate, there are new opportunities to consider to lock in reliable income for land.
Per year, a typical crop yield can bring in an average of £1,500 per hectare.
Solar projects, which sit on grade 3,4 or 5 land, can provide comparable yields, whether in place of farming or in parallel with more traditional crop production and grazing.
Beyond solar, farmland also is suitable for battery storage projects, an essential tool as we move away from the unreliable international gas markets and towards more renewable sources of energy.
These projects pay farmers per MW of export capacity and require proportionately little space – typically between 2 and 8 acres of land.
They will ensure that when weather is intermittent, there is sufficient energy to match demand whilst also financially benefitting the landowner that hosts them.
Moreover, the goals outlined by the SFI need not be at odds with hosting renewable energy projects. A commonly held misconception is that renewable energy projects damage their surrounding environment, however, not in the case of raised solar farms.
In fact, this kind of project can sit alongside traditional farming practices, allowing livestock to graze and insects and wildlife such as birds, hedgehogs and field mice to thrive.
Once the tenancy is complete, the project can be removed, and the land can be recultivated or rewilded.
As the climate crisis worsens, extreme weather occurrences become increasingly regular and pose a great risk to our food security, undoubtedly greatly affecting crop yields.
Hosting clean energy projects enables farmers participation in providing a vital solution to climate change and energy security, while securing a long-term returns that will benefit future generations.
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