How can we fairly fund farmers to deliver the work that needs doing to reduce flood risk on the River Culm? Slowing down water on farmland during floods is an essential way to reduce damage to property, but how can we calculate the value of this “ecosystem service”?
That’s the question we’ve spent the last year working on, thanks to a grant from DEFRA’s Natural Environment Investment Readiness Fund (NEIRF). Our project was called “Connecting the Natural Capital of the Culm” and we used the funding to develop a “Natural Capital Evaluation Tool”. This tool costs up all the farmland measures identified in our hydrological model, like improving soils, tree-planting, installing bunds and creating new wetlands. It also identifies which ones have the greatest benefit for flood risk reduction. What’s more (and this is a really wonderful tool, we have to say, and all credit to FWAGSW for devising it), it also looks at what funding is already available for these measures from the public purse (eg ELMS) and what the shortfall is, taking account of the lost income that farmers will have in the long term from changing the land use to make their land better for flooding.
We also calculated that not all farms are able to access all the funding that’s available. This is sometimes because schemes are competitive, and some farmers won’t be able to get the funding even if they apply for it. Or a farm may be too small, or in the wrong place, to be able to get the funds. We assumed that on average, 25% of farms seeking funding from public sources won’t be able to access it.
The results of these calculations are very revealing. As you can see in the first table below, we show the storage benefits of various measures (known as PAIRS or Potential Areas of Improved Resilience), and the total costs of implementing them if they were rolled out across the whole catchment, according to our model.
In the next table you can see our calculations of how the PAIRS could be funded. Most items show a shortfall in the funding likely to be available, and this means that without additional funding, farmers are unlikely to opt to change their land use at the scale that we need. This is where green finance kicks in! In the case of flood-risk reduction we can add private funding sources on top of public sources (this is called stacking) to create a package that is attractive to farmers.
This means that, on top of public funding, we need to find £5m of up-front capital funds and annual payments of up to £2.3m, over a period of around 25 years. These are big numbers, but through the NEIRF project we’ve also been talking to funders across the country to find out their level of interest in helping secure these outcomes for nature and people.
Our consultants, Cornwall-based Terranomics, led this work and their report is available on request – just email us and we can send you a copy. They found that, subject to further development of the details behind our tool and our business case, private funders would be interested in the Connecting the Culm project.
Next steps for this work are to fill in that detail on our business case, continue talking to farmers to build a pipeline of fundable projects on the ground, and in parallel continue conversations with funders.
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