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Public money for private gain? Dissonance in Defra’s approaches to forestry and farming

Tom Lancaster of RSPB interrogates England's woodland forestry policy, and suggests how this can be improved to support nature's recovery and tackle the climate crisis.

March 2021

Expanding England’s woods and forests is a good thing. Just as with Defra’s reforms to farm payments, it is an aim the RSPB supports, and we recently published some analysis on how it could be done to maximise benefits for nature and the climate. For watchers of both farming and forestry though, there is a curious dissonance emerging in Defra’s approaches to both sectors in England.

Defra’s reforms to agriculture and land management policy in England are well advanced, and centre around the idea of shifting public funding towards the principle of public money for public goods. Michael Gove when he was secretary of state defined these as “…non-exclusionary and non-rivalrous. We can all enjoy them, and as we all enjoy them, no one, if they are enjoying a public good, does so at the expense of anyone else. I am talking about clean air, soil quality and making sure that we invest in carbon sequestration…We all benefit from those public goods, but, at the moment, our farmers are not adequately rewarded for them.”

Timber by this definition is therefore a marketable product, not a public good. Forestry is also a valuable asset class, with one leading asset management company promising returns of 9.2% per year, a rate which compares favourably with other asset classes “even before taking forestry’s significant tax advantages into account”.

And yet Defra are continuing to financially support commercial timber production. You can be paid to plan, to plant, and to maintain a timber plantation. You can get public money for the equipment to harvest the trees and for the roads and other infrastructure needed to get the timber out. As Defra note, you can get ‘additional income’ from selling carbon.

In adopting this different approach to forestry compared to the rest of their land management reforms, Defra risk creating a system not of public money for public goods, but of public money for private gain.

Some might say this is a good thing. Trees do sequester carbon, and fast-growing conifers do it quite quickly. But much of that though is then lost post-harvest, leading to a pattern of carbon peaks and troughs as trees grow, are harvested and turned into relatively short-lived harvested wood products. According to FC statistics, around 60 percent of UK grown timber goes into products with a shelf life of less than 15 years. All that aside though, you can get private funding for woodland carbon, through the woodland carbon code, raising questions as to what added value public money brings?

Woodlands also provide real amenity value. In forestry though, potential amenity benefits are used to justify funding commercial activities on an area basis. In farming, that untargeted approach is one we’re moving away from with the phase out of the Basic Payment Scheme and system of loose conditionality through cross-compliance.

As with cross-compliance in farming, forestry is held to the UK Forestry Standard (UKFS), a de facto requirement for any new scheme hoping to receive public funds or consent from the regulator. Whilst the UKFS is laudable as a baseline for forest management, it is in effect acting as the gateway to funding, with applications that meet the UKFS getting funding, with some schemes giving more weight to applications in areas that are a priority for water quality, flood risk management and other things.

This means you can get public money for a planting scheme that is 85% non-native for timber, 10% open ground and just 5% native woodland (often as a facade around the edge of the plantation).

This doesn’t help meet priority habitat creation commitments such as the Nature
Recovery Network or Local Nature Recovery Strategies, and may often displace
priority species and habitats. For a standard, commercially oriented UKFS plantation, you would need 1000ha of forestry to get just 50ha of priority woodland habitat.

This is out of kilter with Defra’s approach to its other land management schemes, where the aim is generally to target funding towards the actions that deliver public goods, rather than the background commercial activity.

I’m not against commercial forestry, and there is definitely space for more domestic timber production. By extension, a commercial timber plantation can deliver public goods, just as a farm can. But this doesn’t happen by default. Rather than simply paying for the planting of non-native trees for timber, Defra should be adopting an approach consistent with its wider reforms and paying to support actions beyond the UKFS that make changes to where they are planted, the species mix and the management, with the provision of specific public goods in mind. This should obviously take account of the existing species and habitats, and the full suite of Defra’s environmental outcomes.

During the passage of the Agriculture Act, Defra Ministers resisted pressure to recognise ‘food as a public good’ and provide more generalised, untargeted support to farmers. Their farm policy reforms are all the more coherent because of this. They do though have a blind spot for forestry, where they seem to be willing to take a radically different approach that sees the state support commercial timber production and private gain at a scale that would be unprecedented in other sectors.

As things stand, Defra are in a muddle, and at risk of providing blanket, untargeted support to private forestry businesses without demanding nearly enough in return. In doing so, they risk rigging the playing field against native woodlands as we embark on an unprecedented programme of woodland creation, missing the opportunity to create truly biodiverse, native woodlands that can support nature recovery, tackle the climate crisis and hit multiple Defra policy objectives in one.

Tom Lancaster is
Acting Head of Land, Seas and Climate Policy at RSPB.

Follow: @tommlancaster & @Natures_Voice

The opinions expressed in this blog are the author's and not necessarily those of the wider Link membership.