Helping farmers thrive on the transition to net zero

Helping farmers thriveon their net zero journeys

"We've teamed up with Soil Association Exchange to create the largest, most comprehensive review of farm environmental performance ever carried out in the UK."

Our latest report with Soil Association Exchange

So far, our partnership with Soil Association Exchange has resulted in over 4,000 bespoke recommendations to 685 farmers across the UK. And it's thanks to this unprecedented level of engagement that this latest, landmark report was made possible.

What's transpired as a result of our partnership is the largest and most thorough baseline of environmental farm performance and action plans ever carried out in the UK. Indeed, this is the first data-set large enough to support real change - covering 238,494 acres of farmland, and focusing on six areas: soil health, carbon, biodiversity, animal welfare, water, and people & society.

I believe that if this report were to reach every farmer in the country, it could lay the groundwork for a new approach to delivering meaningful change across the UK agriculture sector. The data gathered plainly highlights the difference between farm types, and clearly explains how sustainability, productivity and profitability can all be increased together in unison.

What challenges are farmers currently facing?

From small, family-run farms to larger agricultural operations - our data shows that the agriculture sector faces many challenges. And given the diverse nature of these businesses' operational capacities, there's no 'one-size-fits-all' solution to the obstacles ahead. And most of the main barriers identified relate to a lack of direction.

Back in 2022, for example, the Department for environment, Food and Rural Affairs (Defra) published its National Food Strategy.⁴ But the agriculture sector still isn't clear on the direction of future farm policy and investment decisions. And while the Agriculture Transition Plan and the Enviromental Improvement Plan both offer sound advice to farmers, they are limited on specific, actionable guidance.

It's perhaps no surprise, then, that UK farmers cite a drawn-out and complicated introduction of the Sustainable Farming Initiative, difficulties around awareness and understanding of private financing initiatives and no standardisation of UK methodologies in carbon calculators and no national farming strategy as some of the main barriers.

"So far, our partnership with Soil Association Exchange has resulted in over 4,000 bespoke recommendations to 685 farmers across the UK."

How else is Lloyds Banking Group supporting farmers?

Here at Lloyds Banking Group, we're proud to be the biggest lender to the agriculture sector in the country. And we will continue to support UK farmers in all of the crucial work they do.

Our expert agriculture relationship managers have extensive training, including a tailored course delivered in partnership with the University of Cambridge Institute for Sustainability Leadership, and custom training to deliver our partnership with Soil Association Exchange. These relationship managers closely monitor events in the sector, visit our clients' farms, conduct round tables and host weekly webinars and question time events.

Alongside this we also provide reduced finance for initiatives to make farms more sustainable, with one percentage point margin discount lending available on loans of up to £50,000.⁵

But our support doesn't end there. As part of our partnership with Soil Association Exchange, we're piloting a new scheme to reward farmers for sustainable practices.

The cross-supply-chain model - with the working name 'Exchange Market' - will pool funding from a range of supply chain businesses and allow us to make payments to farmers over sustained periods to support their transition to more sustainable practices.

Using Soil Association Exchange's own platform, environmental outcomes will be monitored and verified which will in turn allow supply chain partners to evidence the impact and progress made towards Scope 3 emissions reductions.

"Using Soil Association Exchange's own platform, environmental outcomes will be monitored and verified which will in turn allow supply chain partners to evidence the impact and progress made towards Scope 3 emissions reductions."

Download our report to find out more.

Looking ahead

It's clear that current farming and food production practices must change if the UK is to meet its legally binding net zero goals. This will also ensure farmers are financially secure for the future.

This research shows there's plenty of room for optimism. Historically, famers have demonstrated an appetite for dealing with uncertainty. And with the new government's growth agenda signalling the chance to support partnerships, now is the time for governments, policymakers and financial institutions to come together to ensure the UK agriculture sector will thrive for generations to come.⁶

It's my hope that this report can act as a blueprint for helping to deliver the change needed for UK farmers to become more financially stable and sustainable for generations to come.

• External links expandable section

  1. PowerPoint Presentation (publishing.service.gov.uk)

  2. AZE0038 - Evidence on Agriculture, achieving net-zero emissions (parliament.uk)

  3. Summary of the state of the environment: soil - GOV.UK (www.gov.uk)

  4. Government food strategy - GOV.UK (www.gov.uk)

  5. Farming our Future - Lloyds Banking Group plc

  6. Kickstart economic growth - The Labour Party

Related content