England’s struggling upland livestock farmers could earn over £15,000 profit a year by entering into private water management contracts with businesses and organisations in areas susceptible to flooding, according to new analysis by Green Alliance and National Trust. 
Upland farmers are losing £10,800 a year, on average, and it is feared that many will go out of business when Common Agricultural Policy subsidies end in 2022. But a new report  shows that a new private market in water management services could be a source of profit for upland farmers, ensuring they can continue as the stewards of some of the UK’s most treasured and inspiring landscapes. The market would be based on a new model called a Natural Infrastructure Scheme, first proposed
by Green Alliance and the National Trust in 2016, centred on the provision of ecosystem services such as natural flood management. 
Drawing on the latest data and modelling, the analysis uses a hypothetical scheme in north west England to demonstrate how it could work and who would benefit. This area is home to nearly 1,800 upland livestock farms. The example revealed that:
• A scheme managed jointly by a group of ten upland farmers, selling natural flood management services, would be able to protect a downstream town against a severe 1 in 75 year flood event, and reduce levels of water pollution.
• In this example, susceptible organisations downstream would buy into the scheme, such as Network Rail, the local electricity supplier and the local water and sewerage company . These organisations would otherwise spend £11.23 million over a 15 year period to achieve the same level of protection from flooding and water contamination.
• Creating and operating the Natural Infrastructure Scheme would cost the farmers £6.53 million over 15 years. This includes lost agricultural income from the land used for the scheme.
• The overall cost saving from the scheme would be £4.7 million. Split equally between the buying organisations and the farmers, the buyers would save £2.35 million between them over 15 years, and the ten farmers would each earn £15,658 in profit per year for 15 years.
The new report urges the government to help this new market to take off, including encouraging alternative approaches to flood risk planning and procurement and setting a framework and targets in the forthcoming 25 year plan for the environment to stimulate the market.
There is also a key role for post-Brexit agricultural policy, in nurturing new market-based mechanisms to support sustainable farming and land management.
In 2017-18 the National Trust and Green Alliance will be working with leading land managers and water companies to test the NIS concept in a real setting. 
Mat Roberts, group sustainability strategy director at Interserve, said:
“The disruption to agriculture and environmental management caused by exiting the EU presents an opportunity for new markets for ecosystem services. The science and economics that underpins these can’t currently compete with CAP payments. The NIS could help release private investment, enabling the UK Treasury to co-invest alongside the private sector in the uplands of the UK. This would help sustain fragile rural communities, improve infrastructure resilience, start to reverse biodiversity loss and increase carbon sequestration.”
Patrick Begg, rural enterprises director of the National Trust, said:
We believe the current farming subsidy model needs fundamental reform. Rather than being paid for how much land you happen to farm, a new model which delivers clear public benefit from public money is within reach after Brexit. But there’s an even bigger prize to be had. The NIS will open up new avenues for business to play its part in restoring a healthy, functioning natural environment. We need to grab this chance to make farming fit for the future whilst safeguarding our countryside for future generations.”
Paul Tipper, head of wastewater network and strategy at United Utilities, said:
“Catchment management allows us to work in partnership with farmers and landowners to deliver water improvements more efficiently than through traditional approaches. We have been exploring a number of innovative funding mechanisms and the natural infrastructure scheme is a welcome addition.”
Laura Mann, project lead for EnTrade, an online platform that facilitates efficient catchment spending, said:
“The NIS scheme is an excellent approach to deliver multiple benefits in a catchment in a cost efficient and environmentally beneficial manner. It complements the work that EnTrade has been doing in partnership with Wessex Water and United Utilities to obtain multiple outcomes in a catchment while also supporting farmers and the local economy.”
Shaun Spiers, executive director of Green Alliance, said:
“The Natural Infrastructure Scheme concept is economically viable and has so much to offer for farmers, businesses and communities at risk of flooding, as well as being environmentally beneficial. It’s amazing it hasn’t been thought of before. By facilitating this market, the government could help support some of our most vulnerable farmers through the Brexit transition, improve the resilience of vital infrastructure at lower cost, and improve the environmental health of some of our most historic landscapes, without increasing the burden on the public purse.”
William Andrews Tipper, head of natural environment, Green Alliance (available for interview)
020 7630 528
 Green Alliance is a charity and independent think tank focused on ambitious leadership for the environment. Since 1979, it has been working with a growing network of influential leaders in business, NGOs and politics to stimulate new thinking and dialogue on environmental policy, and increase political action and support for environmental solutions in the UK. The National Trust is Europe’s largest conservation charity with 4.8 million members. It is the UK’s largest private landowner and farmer, with a total of 250,000 hectares of land and 775 miles of coast across England, Wales and Northern Ireland. Under our ten year strategy, we are committed to developing innovative ways of managing land which are good for farmers, the economy and the environment. For more information go to: www.nationaltrust.org.uk
 Natural Infrastructure Schemes in practice: how to create new markets for ecosystem services from land
is published today by Green Alliance.
 New markets for land and nature: how Natural Infrastructure Schemes could pay for a better environment
was published by Green Alliance in September 2016. Under the NIS, groups of farmers and downstream businesses enter into long term private contracts. Farmers manage their land to reduce the risk of downstream flooding, and improve the quality of water, funded by organisations who would otherwise incur huge costs from flooding and water contamination.
 Other downstream organisations include the local authority responsible for maintaining roads, insurance companies and local businesses.
 This report forms part of a wider collaborative project, led by the National Trust and Green Alliance, and supported by Interserve, United Utilities, Southern Water, Wessex Water and the Esmée Fairbairn Foundation. The aim of the project is to develop and catalyse new market solutions to support sustainable land management on UK farmland - a new approach to managing land for profit and the environment.