Energy and Environment

UK must embrace innovation to make farming economically & environmentally viable


Labour Market

IEA reacts to the Autumn Budget Announcements 2018

Lifestyle Economics

The IEA reacts to the proposed 'sin tax' on red meat

IEA releases report on innovation in agriculture

Britain’s agricultural productivity has stagnated at a time when the world needs to double food production to keep up with the growth of the population, according to a new IEA report

Two papers, written by Matt Ridley and David Hill, set out how innovation in farming can lead to higher crop yields, while also releasing land from farming and returning it to nature.

British farmers have been constrained from embracing innovations such as biotechnology, genetic modification, gene silencing and editing, as well as precision farming and robotics – all of which can increase yields, bring down costs for farmers and consumers, and reduce the environmental impact of farming.

Post-Brexit, farmers in the UK could be exposed to tough competition if external tariffs are lowered. Furthermore, there is little extra land that can be farmed easily or productively in the UK.

It is therefore imperative, 
the report argues, that the government allows farmers to enhance their competitiveness by introducing new technology – some of which is already being used successfully in other parts of the world – to make the most of the land they currently farm.

To ensure these technological advances are also beneficial to conservation, well-designed economic incentives can be put in place. Through concepts such as habitat banking and environmental credits, innovative policy can generate rewards to habitat creation, wildlife enhancement and ecological benefits that are both effective and affordable.

Innovation in farming and food production is vital

Innovation in farming between 1960 and 2010 meant that 
68 per cent less land was needed to produce given quantities of food, allowing more land to be spared from farming. Embracing available technologies will make UK farming viable and, as early adopters, British farmers would reap the economic benefits including:

•   Better return on investments

•   Lower reliance on subsidy

•   Greater ability to compete in world markets

•   Lower reliance on chemicals
•   Lower use of tillage
•   Land sparing for nature
•   Growth in research and development
•   Job opportunities

Technologies that should be embraced

•   Genetic modification: this was rejected almost completely by the EU, despite clear evidence that this innovation has reduced reliance on chemical pesticides by an estimated 36 per cent on average. The effect of campaigns against GM crops was to leave British farming more dependent on pesticides and less competitive than it would have been if the UK had adopted GM crops. 

Genetic modification has the potential to extend the shelf-life of food which ultimately reduces waste. 

•   Bacterial nitrogen fixing: this is a promising candidate for a step-change in agricultural productivity. Results from 200 trials of N-fix technology suggest yields could increase by 30 per cent and reduce the use of fertilisers by close to 50 per cent.

This is significant; if rice wheat and maize were to experience a 30 per cent increase in yield with lower costs to farmers and less pollution, there would be dramatic economic and ecological impacts in the form of price falls and land sparing, which would be environmentally beneficial. 

•   Precision farming and robotics: data collected from drones to make farming more efficient – such as crop density and plant health – represents a potential competitive advantage for countries that adapt their regulations to suit the use of drones and autonomous tractors.

Robots could also pick ripe fruit, which would make the reliance on cheap labour – which is both economically and politically unsustainable – unnecessary.

•   Conservation management: practices focused on managing wild habitats can be improved and transformed by intelligent innovation. For example, techniques of biological control of invasive species have improved dramatically in recent decades.

Restoration of biodiversity & how it can work

The introduction of technological advances in farming techniques could result in land sharing (where habitats within the farmed landscape provide food and cover for the full range of wildlife groups) and land sparing (where land can be dedicated to other uses such as protecting, enhancing and management of natural capital).

Land sharing and land sparing can be incentivised to benefit wildlife and natural capital without excessive cost to the taxpayer.

Four investment vehicles to provide necessary funding for biodiversity restoration

•   Habitat banks: conservation credits raised on land through biodiversity interventions are sold to developers to deliver net gain.

•   Green bonds: issued to raise capital to deliver projects on sustainable agriculture.

•   Environmental credits: purchased by corporates through natural capital accounting, in order to increase market advantage.

•   Impact investments: for projects that both enhance and restore biodiversity in association with either land sparing or land sharing through interventions to make farming truly sustainable.

Commenting on the report, author Matt Ridley said:

“This report concludes that the UK could be well placed to adopt the biotech and robotic innovations that are about to transform farming. Both papers in this report set out a path for ensuring that innovation in agriculture brings environmental benefits as well as economic ones.

“Species abundance and habitat extents across the UK have been severely impacted by farming practices over the past 60 years and transformational change in how we use land, if we are to restore this biodiversity, is necessary. With effective policy backing, innovation in farming has the potential to enable that transformational change to take place.”

Notes to editors:

For media enquiries please contact Nerissa Chesterfield, Head of Communications:[email protected]  020 7799 8920 or 07791 390 268

To download the IEA’s “The Effect of Innovation in Agriculture on the Environment” please click here.

For more research from the IEA on agricultural policy, click 

The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems and seeks to provide analysis in order to improve the public understanding of economics.

The IEA is a registered educational charity and independent of all political parties.