Natural capital, ecosystem services and the UK dairy industry Les Firbank Firbank Ecosystems Ltd & University of Leeds

UKNEA, natural capital and ecosystem services Natural capital and the dairy industry

UK National Ecosystem Assessment First major audit of state of UK environment in terms of how well it can provide what we want and need The intention is to make sure we factor environmental goods and services into decision making, even though they are not costed The report is already very influential

Natural Capital At farm scale, the natural resources needed to sustain the business – Is the land in good heart? At national scale, our environmental stocks, including wildlife, beautiful landscapes, energy and water resources, soil carbon – Is our country environmentally rich?

Ecosystem services The services that we need and value that are provided by ecosystems – Food, water purification, climate regulation, game shooting, beauty, health

Note that ecosystem services include positive services and dis-services / external costs are often transformed before they reach a ‘consumer’ (eg food chain) data are often sparse, poorly indicated, hard to interpret or absent altogether

Valuations of ecosystem services are very sensitive to system boundaries very sensitive to weightings more useful for comparisons than for absolute values hard to interpret, in the absence of markets?

Agriculture and the UKNEA Impact of agriculture on other ecosystem services is of major importance 1940s-1990s Food production increased at the expense of the environment 1990s-2000s – Food production stalled, while environmental quality increased 2010s- Increased pressure on land, food and input price inflation, less public money – ‘sustainable intensification’ ?

UK Food production: a success story

Agriculture v other ecosystem services Relationships are currently negative, per unit area of land

Agriculture v other ecosystem services: Potential win-win Increased resource use efficiency reduces pollution Intensive = good for the carbon and water quality footprints per unit production Intensive can be good for animal welfare

Agriculture v other ecosystem services: Probable win-lose Intrinsic conflict with biodiversity Likely conflicts with landscape quality and public perception

Biodiversity Declines in specialist farmland birds For species of wet grassland, key drivers are drainage; stocking densities; use of fertiliser and pesticides

Public perception – concerns about Animal welfare Factory farming Big corporations Landscape Pollution Compassion in World Farming

Input costs to UK agriculture are rising fast.. Price of red diesel rose around 2.5 x between Expenditure on fertiliser has doubled since 2000, usage fallen by 30% Expenditure on animal feed increased by 2/3 since 2005 to £4b, volume rose a little

What is the future for UK agriculture? More complex global markets, regulations, weather patterns Protein and energy will become more expensive Need to control costs & manage risks to seek better profits Return of mixed farming, but not as we know it No reason to assume current trends in demand will continue

The dairy story Footprint of dairy has improved in recent years – But due more to reductions in numbers than anything else Scope for further improvements through genetics, housing etc Dairy Road Map

Sourcing cattle feed Around 1/3 of global cereal produce goes into livestock feeds Competition for farmland Export of sector environmental footprint

What is the future for the sector? Is reliance on imported feed sustainable? Is big really better, and what will it take to keep the public on board? Will markets for dairy hold up, compared with milk substitutes? What about new business opportunities for the sector? – Pharmaceuticals, biorefinery

Firbank Ecosystems Ltd & University of Leeds