Getting paid by businesses for nature work: what Defra's new plan means for farmers

Let's be clear from the start: the paper Defra published on 26 October, Growing Places, is not a grant, and there is nothing in it to apply for. It is the government's plan for getting businesses that depend on nature to help pay for it, and a lot of that work happens on farmland. One of its stated aims is for farmers and land managers to have clearer routes to earn an income from environmental work. Below we go through what that means in practice, in plain words. Every figure comes from the paper itself.

First, what "private finance for nature" actually means

Most of the money farmers get for environmental work today comes from the government, through schemes like SFI and Countryside Stewardship. "Private finance" simply means the money comes from a business instead. The business pays because it needs the result. The paper talks about three kinds of buyer:

Housebuilders and developers, who by law have to leave wildlife habitat better than they found it, or make up for the pollution a new development adds to a river.
Water companies, which are spending money on nature-based fixes such as wetlands, rather than relying only on pipes and concrete.
Food and drink businesses, which depend on healthy soil and water on the farms that supply them.

Defra's plan is about getting more of these deals done, and making sure both sides can trust them.

Where business money already reaches farms

Much of this already exists. The paper describes these routes:

Biodiversity net gain (BNG). Since 2024, developments in England that need ordinary planning permission (with some exemptions) have to leave habitat for wildlife in a measurably better state than before. When a developer can't do that on its own site, it can buy "biodiversity units" from land elsewhere, and that land goes on a public register as a "gain site". There are now over 350 gain sites on the register, covering more than 10,000 hectares, and the paper counts them as new income for farm and rural businesses. From November 2026, BNG also applies to nationally significant infrastructure projects, the very large schemes decided by government rather than the local council.
Nutrient offsets. In 27 river catchments in England (a catchment is all the land that drains into one river), new housing has to show it won't add to the nutrient pollution in the river. This is called "nutrient neutrality". Where a development can't manage that on its own site, the developer pays for work elsewhere in the catchment that cuts the pollution instead, and local markets for this have grown up. The government has put £140 million into nutrient mitigation schemes, and the paper says this creates new income for farmers, among others.
The new Nature Restoration Fund. In certain areas, developers will be able to pay a simple levy instead of handling some of their environmental obligations themselves, including those on nutrients. The money is pooled and spent on conservation work set out in a plan for the area (an Environmental Delivery Plan). The government's preferred way of buying that work is fair and open competition among local suppliers of nature work.
Water companies are investing over £3 billion between 2025 and 2030 in nature-based solutions and in improving biodiversity. From 2027, new regional water planning will bring water companies, councils, farmers and other businesses together to agree what each area needs and pool the money to pay for it.
Natural flood management. This means holding water back on the land upstream, for example by restoring peat bogs or blocking drainage ditches on the moors, so less of it reaches towns at once. The government has committed £300 million to standalone natural flood management schemes up to 2036. Projects over £3 million need partnership funding from others as well.

What's new for farming

A private finance taskforce. Following a recommendation in Baroness Batters' Farming Profitability Review, Defra will set up a new taskforce with industry partners to bring more private investment into sustainable farming in England. The paper gives no members or start date.
Soilshot. A pilot programme, also recommended by Baroness Batters, in which food businesses and others who benefit from healthy soil pay farmers for work that restores and protects it. When a business pays for this kind of work inside its own supply chain, it's called "insetting". Defra says it is "moving quickly" to design and start Soilshot. There are no dates or payment rates in the paper yet.
A standard for "regenerative". There is no recognised national standard for regenerative farming today, the way there is for organic or high-welfare food. Defra will call for evidence in 2027 on working with industry towards a common national code or standard.
Help for groups of farmers. The paper says the Farmer Collaboration Fund should help groups of farmers and land managers work together to reach these opportunities in their own area.
Conservation covenants. The government will support wider use of these. A conservation covenant is a legally binding agreement between a landowner and a "responsible body" (a council, a conservation charity or another approved organisation) to look after the land's natural features. On freehold land it lasts indefinitely unless the agreement sets an end date, according to GOV.UK's guidance. A new code of conduct, led by industry, will cover the bodies that hold them.

Nutrient trading: not coming, for now

This is the part that could have changed the most on farms, so it's worth reading closely. Some business and environmental groups have called for a "cap and trade" scheme for nutrients, similar to the one for carbon emissions. Each catchment would get an overall limit on nutrient pollution, each business would get a share of it, and anyone over their share would have to buy allowances from those under theirs.

The paper weighs it up openly. On one side, it says a price on nutrients would quickly cut wasteful use and make manures, slurries and digestates more valuable to reuse, with less reliance on imported fertiliser. On the other, it warns of new costs passed on to consumers, unintended consequences, and a disorderly change in farming practice that could affect food production.

Its conclusion: the government does not currently plan to bring in universal nutrient budgeting, but it welcomes views. Separately, Defra is already reforming the agricultural water regulations, including looking at ways to improve nutrient management on farms, and it will work with local partners on the evidence for catchment nutrient budgets and the scope for future pilots.

Being paid by more than one buyer for the same field

One piece of work often does several good things at once. The paper's own example: a new woodland can store carbon, help wildlife, reduce flood risk and improve water quality. Today it isn't always clear whether each of those benefits can be sold to a different buyer, or a private payment added on top of a public one, without it counting as being paid twice for the same thing. Defra proposes three principles to sort this out, and it wants views on them:

Be clear what each payment is for. Money from more than one source could be combined on the same land, as long as each result is clearly linked to one payer and nothing is paid for twice. The paper lists four ways to split it: each payer takes a set share of the results; different payers at different points in time; different payers for different actions; or a different payer for each result, for example one buys the carbon and another the wildlife gain.
Buyers shouldn't be penalised for buying more than one result. A company that wants to make up for both its carbon emissions and its impact on wildlife should be able to buy both from the same project. The paper is clear that this doesn't take away the land manager's choice of what to sell, and to whom.
Extra care when a result is used to make up for harm elsewhere. If a buyer uses, say, the carbon from a project to offset its emissions but hasn't dealt with its other impacts, the other results from that project would normally be "retired" along with it, meaning nobody else can use them, and the price adjusted to match. The paper says this is not meant to limit what the supplier can earn.

Two things worth knowing. These are only proposals: they change no existing scheme, and if they are used later they would not apply backwards to deals already made under the rules of the time. And Defra is asking for views: it plans webinars and round-table discussions over the autumn and winter, and feedback, or a request to join a session, goes to naturemarkets@defra.gov.uk.

How buyers will know the work is real

Businesses will only pay if they can trust that the wetland or the better soil they paid for actually happened. The British Standards Institution launched standards in March 2026 for biodiversity (Flex 702) and for nutrient markets (Flex 704), built on a common set of principles for all UK nature markets (Flex 701). A standard for carbon from nature projects (Flex 703), covering things like new woodland, restored peat and saltmarsh, and soil carbon, is expected to be ready for market use in 2027.

For now, projects check themselves against the standards. After at least two years of that, the government expects the market to move to independent certification by accredited bodies, with a pilot running from 2027 to 2029. The paper also admits there aren't enough qualified people to check and verify projects, which can hold up the issuing of credits.

Is any of this working yet? The paper's own examples

Aire Valley, Yorkshire. The Aire Resilience Company brings together local businesses, landowners, Leeds City Council, the Environment Agency and river and wildlife trusts to pay for natural flood management upstream, much of it on farmland. Public money pays for the initial works, and local businesses pay for the upkeep, including payments to land managers. It started trading in March 2026, once it had secured its minimum £225,000 of revenue.
East Devon and West Dorset. Eight farm clusters and Landscape Recovery projects across six neighbouring catchments have packaged their work into one offer for investors, in four parts: healthy soils and carbon, water storage, river restoration and wetlands. By 2040 they aim to restore about 22 km of river, improve soil management on more than 2,000 hectares and restore or create over 1,000 hectares of wetland and floodplain. The offer is now being taken to potential buyers and investors.
Cornwall. The council set up a local nature market, with a first pilot round focused on BNG. Buyer demand fell during the pilot and wasn't enough to support trading, so it has been paused.

The paper is honest about the bigger picture too. A Defra fund that gave £13 million in grants to help more than 130 nature projects get ready for investment found that, when it was evaluated, most of them were still at an early stage of earning revenue or attracting investment. In other words, the paper's own examples point to steady demand from buyers as the hard part.

Where to look in your area

England is now covered by 48 Local Nature Recovery Strategies. Each one sets out what nature work matters most locally and where, and the councils that lead them have been given resources to turn those actions into projects for public and private funding. Some areas have gone further: the West Midlands, for example, launched a Nature Investment Hub in July 2026, a single place where nature projects can be packaged and matched with investors.

Sources

This is a summary of what Defra has published, not advice. Selling environmental results from your land can mean long agreements that stay with the land, so the detail of any deal is one to go through with a land agent or solicitor.