Land is a precious and multifaceted resource, serving various critical purposes such as food and lumber production, providing natural habitats, carbon dioxide capture, and even biofuel cultivation. It is also deeply intertwined with the identity of farms and villages, contributing to the nation’s character. Consequently, policymakers are increasingly concerned about the potential misalignment of incentives that could lead to the conversion of farmland into carbon-offsetting forests.
However, from a strategic perspective, sustainable forestry represents an opportunity for the UK, particularly when considering the least productive 20 percent of its farmland, which contributes only a minuscule 1 percent to the nation’s food supply, as highlighted by Dustin Benton at the Green Alliance. The low productivity of this land means that a relatively small upland farm, roughly around 70 hectares in size, might generate an annual income of approximately £14,000, including subsidies.
In contrast, sustainable commercial forestry, as practiced by organizations like Foresight, offers a more financially promising prospect. In simplified terms, densely planted, fast-growing trees have the potential to yield up to 400 tonnes of wood per hectare by 2050, with each rotation lasting 35-40 years. Assuming a 2 percent annual increase in wood prices and discounting the future value of these crops to today, the potential value could approach £20,000 per hectare.
Furthermore, each hectare of commercial forest has the potential to earn approximately 250 tonnes of voluntary carbon credits for sequestered carbon dioxide, translating to an additional £5,000 at an estimated rate of £20 per tonne.
It’s important to note that commercial forests may not possess the picturesque appeal of permanent broad-leaf forests, but they offer stronger financial incentives. The economic viability of such conversions, however, hinges on the significant increase in the price of carbon credits.
Forestry emerges as a viable opportunity primarily for the least productive farmland. Arable land, especially when operated at scale, retains greater productivity and value compared to small upland holdings. The fact that this transition to forestry makes sense only at the margins is seen as a positive aspect by those who cherish rural landscapes.
