This is a tidied-up version of a talk delivered to the Westminster Food & Nutrition Forum's conference on Priorities for Improving Soil Health in the UK, on Tuesday 12 March 2024, hearing from experts about strategies for improving soil management:

 

Much of the discussion in this area is about the public approach, manifested through public policy.  But it's also important to look at the private approach, in the context of agricultural landlords and tenants.  It is here where there may be significant developments.

That involves different layers of people interacting with each other, and in particular the issue of control of the land.

Taking a look at what is already being done, the presence of soil clauses have been feature of certain of the Farm Business Tenancies (FBTs) we’ve been granting for landlords for some years.

These are based on soil assessments at the entry, mid-point, and end of a medium length (e.g. 10 year) FBT aimed at ensuring that the soil is left in at least as good a condition as it was when the farm was let.  In passing, what this illustrates is that there is a consistent and ever growing demand for measurement and data about soil health that can be relied upon and used effectively.  That demand is not going to go away.

The idea is to maintain soil health and fertility as monitored through these indicators.  If the soil health is not maintained, then as a tenant you face a dilapidation claim at the end of the tenancy  if you haven't fixed it.

The market reaction for these clauses has been accepting.  And that is perhaps because it helps to define who is the most suitable tenant, in that you may get an element of self-selection where tenants are comfortable accepting theses clauses knowing that they can deal with them - they know what they're doing and so are opting-in.   

The sting the tail is the potential for liabilities if there is non-compliance.  The theoretical cost of improving soil at the end of a tenancy is high and there is a real potential issue about valuing the impact of this, but happily the tenancies we see are not producing these negative issues.  That suggests that the land has been left in decent condition,  so the existence of obligations like this may be prevented the problems occurring, as they are conditioning expectations between landowners and farmers from even before the start of a tenancy.  

In my view there is a lot to be said for this, because the expressed joint aim to have these outcomes on the soil has a beneficial impact on the relationship between landlord and tenant from even before they sign any documents (including helping the set expectations about sensible rent levels) and it informs how the land will be looked after from the start. 

The concept of an understanding between landlords and tenants is going to be a major factor for agreements in the near future.  Soil health is only going to be more important and its monitoring and management are already seen to be a matter of interest all the way through the supply chain. 

There’ll be desire for tighter management.  There will be opportunities to monetise soil health as a benefit in itself.  Stacking will be desirable.  Additionality is a problem.

How this is likely to play out is in increased partnership between landlord and tenant. There won’t be a wholesale change to the structures under which people operate, but within the existing framework, we anticipate a more parallel relationship rather than the top-down relationship traditional ascribed to a tenancy.  Set prohibitions and prescriptions can be difficult to deliver in a top-down world and we anticipate that both landlords and tenants will be more bothered that their soil is properly looked after, because they know the upside and the potential downside to that.

We anticipate close soil monitoring with information shared between landlord and tenants.  There will be targeted actions aimed improving soil health.  Some of these will be set and legally binding through the tenancy document, but others will be based on shared views between landlord and tenant, and that is where the relationship between them will be key.  

We’ll see that coming out with more getting to know you work  between landowner and tenant before they sign up to anything (with a related likely reliance on effective agents, on both sides), more due diligence carried out by both landlord and tenant to establish what is possible, and probably more co-investment, to enable ambitious projects to come to fruition.  

We see discussions on this happening now and anticipate this being a reality on a broader basis over the next 2 to 3 years as agreements based on these discussions start to land and ripple through the market.  

The net effect should be a healthier soil, and also a healthier landlord and tenant market.