More food, more environment

The challenge that the farming industry has been set is how to produce more food for a growing population without damaging an already fragile environment.
Owners of land have a choice as to what they do with that land. If they want a return on that asset as many do, then they will want to see it put to an economic use. Inadvertant changes in taxation policy could put even more pressure on the owner to seek an economic return.
The return could be either in the form of profit to a farmer or rent payable to the owner. Both of these have historically favoured maximising the returns from agriculture.
If the owner is to put the land to an alternative use; an environmental rather then a economic use for example, then he/she will have to either obtain some value from that environmental use or do so for some altruistic reason.
Some, like those with a very long term perspective, might see the importance of maintaining biodiversity for its own sake. Others might gain some economic benefit from environmental enhancement such as from a tourist enterprise. Normally however it involves sacrificing profit and production even alongside environmental stewardship schemes. For environmental protection and enhancement to have a chance against intensive agriculture then some value needs to be placed on other activities such as water management, carbon sequestration or increasing skylark breeding numbers for example.
Tenant farmers are particularly vulnerable to the pressure to make every acre of land pay. This is partly because they have to pay rent on almost every acre and partly because they do not share in the benefit of any uplift in value that may flow from an improvement in the biodiversity of the holding.
We might see a net increase in environmental quality on let land if the landlords were prepared to make it a condition of letting the land. To do so however they would probably have to be prepared to take a reduction in monetary return. Would they do so? Perhaps if they were wealthy enough, had a long horizon or had a sense of, or the need to demonstrate, corporate responsibility.
The Government Environment White Paper introduced the concept of Natural Capital . Perhaps we will soon see the Chancellor reporting on this in his annual budget. Until the bank manager recognises natural capital however, owner occupier farmers, tenants and landlords will struggle to justify environmental investment over investment in increasing food production.