£1m fund rewards farmers for reducing emissions

• Cash to combat climate change

• No need to sell carbon credits

• Major ‘step forward’ for farmers

An innovative programme enabling food supply chains to reward farmers for reducing greenhouse gas emissions is now open for applications. 

Farmers participating in the scheme can earn £60 for each tonne of CO2e (carbon dioxide equivalent) reduced annually, with half of payments provided upfront to help fund their transitions.

Developed by Soil Association Exchange, the Exchange Market operates as an insetting fund. This means it makes payments to recipient farmers who reduce emissions without them having to sell valuable carbon credits.

The fund been developed with a farmer steering group and farmers will receive funding for cutting emissions by adopting action plans that work for them – supported by a range of companies who are backing the fund.

Support to develop the scheme has been given by Lloyds who have helped to convene key retailers and landowners including the Co-op, Lidl, Tesco and the Church Commissioners for England to contribute to the fund.

Payments

Co-developed with technical experts Finance Earth, farmers can receive payments for actions that include reducing fertiliser usage by introducing nitrogen-fixing companion crops, better fuel efficiency and investing in solar.

Soil Association exchange chief executive Joseph Gridley said: “Exchange Market is about creating real, measurable change within farming systems while empowering farmers to make decisions that work for them.

“This carbon in-setting programme demonstrates that delivering true environmental outcomes can go hand in hand with financial resilience when farmers and businesses collaborate to build a sustainable future for food and farming.”

Mr Gridley added: “It represents a major step forward in aligning farming activities with climate goals and demonstrates the power of what can happen when businesses and farmers work together.

More impact

“Collaboration like this enables greater scalability, affordability, and ultimately more impact in reducing agricultural emissions and advancing positive environmental outcomes.”

Importantly, farmers who are already lowering emissions will be rewarded – as well as those who are making new steps to reduce carbon. They will be eligible for maintenance payments, supporting them to continue their progress to date.

Suffolk farmer James Hay, of Barton Place Farms, near Bury St Edmunds, is a member of the farmer steering group. Created in collaboration with farmers, the scheme provided financial support to try new ways to reduce our emissions, he said.

“The fund offers the flexibility we need to do the right thing for our farm. As subsidy funding changes in the UK, schemes like Exchange Market give our business further resilience by offering new income streams from private markets.”

Farmers can join Exchange Market by completing a baseline assessment and submitting a emissions reduction plan – with support from Soil Association Exchange advisors. Annual payments are based on verified results.

For more details visit:
www.soilassociationexchange.com/exchangemarket

Why food retailers are backing the scheme

The £1m funding pot was secured from food retailers and other businesses who are required to reduce their Scope Three emissions – indirect greenhouse gas emissions generated through their supply chains, or their rental or lending footprints.

Payments

Lloyds Banking Group head of agriculture Lee Reeves (pictured right) said: “As the UK’s largest finance provider to agricultural businesses, we play a critical role in supporting  the sector in its transition to a more sustainable future.”

“Our ambition focuses on a holistic view of farming’s environmental impact, rewarding farmers in ways that work for them to become more resilient, while securing long-term profit.”

Elizabeth Beall, Managing Director from Finance Earth, which helped devise the scheme, said farmers were on the front line of climate change and should be incentivised and rewarded for reducing emissions.

“We’ve designed a mechanism which enables both to happen – private finance is mobilised, farmers get paid, while businesses can share costs in reducing emissions in their supply chains.”