The Farming Profitability Review and SOILSHOT+NATURE

The Farming Profitability Review by Baroness Minette Batters was published on 18 December 2025.  At 154 pages, including appendices, it’s a chunky piece of work.  The Review provides 57 separate Recommendations for action.  With this amount of effort going into it, the Review is well worth reading, and a link to the full Review is here:   farming-profitability-review.pdf

This is one of a number of articles looking at particular Recommendations from the Review that catch the eye.

SOILSHOT+NATURE is one of the trickier concepts in the Farming Profitability Review, but it demonstrates an ambition to recover ground lost by productive farmers, and recognises the importance of alternative income streams for farming.

It covers Recommendations 7 to 12.  Of those, a couple stand out:

Recommendation 7:  Defra Secretary of State should lead “SOILSHOT + NATURE” taskforce to explore development of a new funding stream to achieve payment rate in line with S&P* comparison to median household earning.  Taskforce should include the NFU, Country Land and Business Association (CLA), Institute of Grocery Distribution (IGD), Banks, Defra Green Finance Team and HMT** where appropriate.

Recommendation 10:  Defra must mandate nature reporting for corporate businesses in the UK via TNFD***. 

                                                                                               Farming Profitability Review – M Batters, 2025

[*Strutt & Parker, **HM Treasury, ***Taskforce for Nature-based Financial Disclosures] 

In broad summary, the idea is to deliver environmental outcomes through the farmed environment, so farmers can benefit from enhanced income matching the median household income (£34,500 pa in the Review).  That will be delivered through standards measuring farm-focused environmental outcomes (soils, hedges, trees, year-round cover).  And demand will be driven by mandating nature reporting for businesses, especially those in the supply chain.

There is a lot around this and within the details are some points that may end up being very controversial.  Here are some points that appear key, with related quotes from this part of the Review:

• This is seen as an opportunity to capture a different source of income that may not presently be capitalised on by farmers, and instead go to others producing environmental benefits, but not as part of growing food.  Looked at in that way, this is an ambitious set of Recommendations, aiming to grab the environmental market.  And linked to that is the aim to set some measure of farm profitability connected to household income as an express target for the outcome of this policy, which may be intended to become a prevailing measure for farm incomes and aim of farming policies: 

On the evidence I have family farms in England are at serious risk. Analysis undertaken by Strutt & Parker (S&P) estimates that for profits to be economically sustainable they should be able to support a family and allow reinvestment into a business, and it would need to be more than £250 per hectare.  For a typical farm size of 140 ha, their analysis suggests that profits would need to be ∼  £34,500 per year, which is similar to the median household income for the UK.

• The lack of a single clear standard for environmental enhancements on most land (ie for projects that fall outside the Woodland and Peatland carbon codes) has been a concern for a lot of farmers and landowners, and is often regarded as a drag on the development of an effective environmental market:   

There is a common theme that is aligned to farmers concerns on the need for a standardised approach to define how carbon, soil, water and biodiversity outcomes can be measured.  Achieving a common approach will then allow farmers to measure the benefit of their management practices with confidence.

• These Recommendations are looking to firmly plant a flag for farmland at the heart of environmental schemes.  They can be seen as a concerted effort to regain the initiative for farms and secure what has the potential to be a large and valuable income source for the future.  What is clear is that the Review is looking to channel support into environmental outcomes alongside food production, not instead of it.  For that reason, this element of the Review is likely to be widely supported by farmers: 

Rather than keep putting more funds into the non-food producing areas what’s needed is investment that will deliver a multi-faceted return:  building on-farm resilience, de-risking the financial sector and providing an affordable option for corporate businesses to fulfil their commitment to the TNFD.

As a first step I recommend establishing the SOILSHOT + NATURE Taskforce to ensure BSI standards support standardised measurement of farm focused environmental outcomes from:  soils, hedgerows, trees and year-round green cover. … These can then be used to market and sell the environmental benefits through insets and offsets.

• This series of Recommendations are in a complex part of the report but help to give an impression of at least one view of the direction of travel, and instinctively (and anecdotally) it feels like a lot of these points would have broad support through the sector.  A previous article looked at the proposals around boosting exports (The Farming Profitability Review and Exports - Burges Salmon) but here we also see the other side – encouragement for trade barriers to protect against imports: 

…we should not tie farmers to a market access standard while allowing imports to come in without an equivalent standard.

• And where is the demand for environmental credits to come from?   

…it is also essential that those throughout the supply chain who benefit from resilient domestic farming are obliged to invest.   … Mandating nature reporting would be an opportunity to drive engagement and deliver a business benefit to larger corporate businesses who are currently unable to invest in a high-integrity scheme with scale to deliver.

A long-term theme of discussions in the rural sector is how farmers can secure greater incomes for themselves in a country where rising food prices are a cause of angst.   This approach may have been suggested as a means of trying to avoid that direct connection between farmers and higher food prices, while achieving the desired outcome of enhancing farm income.   

Additional research by Lucy Mostyn

Previous articles in this series:

• The Farming Profitability Review and the Active Farmer - Burges Salmon

• The Farming Profitability Review and Farm Tenancies - Burges Salmon

• The Farming Profitability Review and Exports - Burges Salmon