Cooperative ways to help farmers benefit from restoring nature

Amy Burnett and Fergus Lyon
Report and Policy Briefing | March 2025

In response to the loss of nature, there are now several ways farmland can be used to allow nature recovery. There is a risk that these opportunities for farmers to diversify their incomes get captured by corporate interests.

A new report by CUSP researchers Amy Burnett and Fergus Lyon explores how cooperative governance models can empower farmers in these new markets. These models build on existing forms of cooperation such as farmer clusters and argi-food cooperatives. The government has also committed support to natural capital markets and to increase mutual activity.

This Agri-food for Net-Zero-funded research on ‘Farmers as Empowered Intermediaries? draws on the experiences of the Environmental Farmers Group  (EFG) and insights from ongoing research on the agri-food sector at Middlesex University, part of the Integrating Finance and Biodiversity Programme.

A particular focus for this study was the Biodiversity Net Gain market where developers of houses and infrastructure must offset their damage to biodiversity by creating new habitats elsewhere.  The research identified several challenges facing agri-food mutual-based approaches in navigating these natural capital markets:

1. Issues with engaging in emerging nature markets—the first mover challenge of navigating (and trusting) nature and carbon sequestration markets in their infancy, in addition to upfront costs to progress trades.
2. Uncertainty or changing policy relating to nature markets—particularly those related to planning policy and Biodiversity Net Gain. This has implications for the roles that different actors (public, private and mutuals) play and assuring mutual members and potential investors of the underlying trade and investment ‘rules of the game’.
3. The high cost of measurement for baselines—evidencing change (i.e. uplift in biodiversity) comes with a cost (to landowners); progressing potential trades requires additional resource and medium-term investment which can be difficult to secure if not backed by large amounts of investment and grant support.
4. Time horizons and managing conflicting priorities—nature market contracts may last decades. This affects intergenerational perspectives (of farmers across generations of family farms), perceptions of capacity (i.e. of ageing farmers), and these are often weighed up against conflicting personal priorities. These longer-horizon issues can require time and resource to explain and communicate to members of mutuals and encourage them to translate interest into action.

Community-led delivery partners (such as farmer-led mutuals) can be alternative approaches in the nature market investment and wider supply chain landscape that also support local resilience and landscape-level nature recovery.   In this way nature restoration can sit alongside building social value and community development.  The research makes recommendations to policy and planning authorities regarding Biodiversity Net Gain and the need to understand the wider community wealth building possibilities when working with mutual. We assess the potential for mutuals to be given greater weighting in assessments of the biodiversity net gain of a project.

In this way there can be both nature recovery along side support for smaller farmers at a time when their livelihoods are being threatened. These alternative mutual forms for nature markets also show how there can be alternatives to the corporate land grab that nature markets can incentivise.