Farms of the future will need to provide public goods from their land, alongside food, if the UK is to meet its climate and nature goals. Only a quarter of England’s farms are currently making a profit from food production alone. Most rely heavily on subsidies to make ends meet.

Land can deliver a range of vital public goods: it can store carbon, provide habitats for nature, prevent flooding and improve water quality. It makes sense that farmers are paid public money in exchange for these benefits, since they flow well beyond the farm to benefit society. This is meant to be the guiding principle behind England’s new Environmental Land Management (ELM) scheme but it is becoming increasingly less clear as ELM is rolled out.

In this analysis, the authors explore what pursuing ELM’s original vision would mean for future farm incomes. Here, they explore future income when farms are paid for carbon sequestration which is just one of the public goods ELM should deliver. They find that all farms could become economically viable through a mix of agricultural income and payments for carbon sequestration, when those payments match the value attached to climate change mitigation elsewhere in the economy. Payments for other public goods could increase incomes further.