Farming with Nature: Mapping the growth opportunity for UK agriculture

"We are at a pivotal moment for UK agriculture, where the intersection of farming, nature and finance will shape the future of our food system, rural communities and wider economy for decades to come.

"As the largest financial partner to UK agriculture, Lloyds Banking Group serves over 46,000 farming businesses. Our role is to enable the growth and transition of farm businesses, working alongside farmers to turn robust data into practical solutions that build resilient farms that deliver long-term returns.

"Since launching our ‘Grounded in Evidence’ report last year, we have dramatically scaled our analysis of farming’s environmental footprint in the UK. We have used geospatial data to identify nature-related impacts and opportunities and sharpen our understanding of these dependencies across our agriculture portfolio. Crucially, with this data, we can prioritise support to farms most at risk, scale existing solutions and pinpoint cases where innovative products can drive resilience and growth.

"This report, ‘Farming with Nature’, represents a milestone in assessing how farming can thrive while restoring nature. It emphasises the importance of partnerships that actively support farmers’ commitments to nature restoration and protection, while demonstrating how this can drive a step-change in the wider sector’s profitability, prosperity and sustainability. 

"Utilising the Earth Blox platform, we have combined cutting-edge geospatial data with farm level experience to create a pilot spanning 5.1 million hectares of farmland - equivalent to roughly 30% of the UK’s total 16.8 million hectares of utilised agricultural area.

"With our unique combination of sources and scale, this is one of the most extensive views yet of how farmed landscapes interact with nature and where the biggest opportunities lie."

East Anglia makes up 14% of total farm area assessed and is a clear priority given its high concentration of arable farms. Agriculture here shows trends of high fertiliser and pesticide use, low soil organic carbon, and the worst national soil pH. 

Cover cropping could deliver the greatest benefits to both farm productivity and reduce pressures on protected areas, while tree and hedge planting (identified across 2% of the total farm area) could help address low carbon sequestration, water scarcity, and reduce flood risks.  

East Anglia also records the lowest water availability and highest arable water use intensity (7% of total farm area), making water management, reservoir building and rainwater harvesting highly relevant for easing demand on mains and groundwater. 

Making up 32% of the total assessed area, the best soil organic carbon storage of the farmland mapped is in Scotland (followed by parts of Wales). Farms here are generally less dependent on water flow regulation and supply services than those in England and Wales, with only a single farm identified as high dependency. Crop rotation is commonly practised and has clear environmental and agronomic benefits. 

Of the total farmland mapped for high nitrogen, phosphate, and potash application (above 18kg/ha), the East Coast of Scotland is among the regions most suited to benefit from crop rotation (at 2% of total farm area coverage). Many farms fall within Nitrate Vulnerable Zones (NVZs). Nutrient management planning and precision spraying are therefore opportunities to address poor soil pH and fertiliser hotspots linked to low water quality.

Wales accounts for 6% of total farm area assessed. It is a particularly agriculture-heavy region and over 90% of all land in the country is dedicated to farming (compared to around 70% in England and Scotland), with the majority used for rearing sheep and cattle. The country has 8.7 million sheep and lambs, with over 1 million cattle; 71% of the land is classed as ‘less favourable’ and grazed and 7% is lowland. 

Rotational and mob grazing, overlapping with improvements in slurry management, could improve soil fertility, organic matter and water quality, especially in areas where fertiliser use and dependency on water purification service is high and where farms are within nitrate vulnerable zones or protected areas, (over 23,000 ha; 7% of farm area assessed). 

This region represents 20% of the mapped farm area. A greater use of herbal leys (mixtures of herbs, grasses and legumes) sown into pasture to boost soil health and structure, provide forage for livestock and create new habitats for biodiversity, is the key recommended action here. They can attract beneficial insects for pollination and natural pest management and are particularly relevant for this region’s low pollinator plant diversity. 

The region also records some areas with high pesticide use, overlapping more broadly with its low pollinator diversity. This reinforces the case for integrated pest management; beneficial insects may be bolstered by the adoption of herbal leys. Like much of the UK, rainwater management is relevant, with 3% of total farm area coverage identified as having some of the lowest water availability but with high usage intensity. 

The Midlands accounts for 13% of the total farm area analysed. Rainwater harvesting, reducing reliance on mains and groundwater, is a strategic opportunity for around 3% of farmland across this region. The East Midlands is among one of the main regions showing high dependency on soil and sediment retention services, combined with low soil organic carbon. 

Adoption of min/zero tillage could therefore deliver benefits here by improving soil stability and reduced sediment loss into waterways. High pesticide use, combined with dependency on biological control services across some Midlands postcodes, also means there is an opportunity for more integrated pest management, reducing reliance on chemical inputs.

The South West accounts for around 13% of total farm area mapped for priority interventions. It records the best soil pH nationally, in a predominantly dairy and cattle farming region. Slurry management is especially relevant where dairy and cattle farms are in Key Biodiversity Areas and protected areas showing high dependency on water purification and sediment retention services. 

Combined with investments in slurry management, adopting min/zero tillage could also reduce sediment loss in runoff-prone arable land or regions with sloping pasture. With its increasing risk of drought and heat stress, the South West would benefit from more tree and hedge planting, providing valuable shade for livestock, while improving water retention, biodiversity and carbon storage.

Nick Phillips, Kilkenny Farm, Cirencester, Gloucestershire 

Nick Phillips runs S.J. Phillips & Sons (Kemble) Limited at Kilkenny Farm near Cirencester and is integrating sustainable farming practices into his business to safeguard its future for his three sons. 

The 1,200-hectare enterprise includes a 140-cow Stabiliser suckler herd, 890ha of combinable crops, and just over 80ha of land enrolled in Countryside Stewardship Mid-Tier and Sustainable Farming Incentive (SFI) schemes. 

The business also boasts a wedding venue in a converted threshing barn, as well as various renewable energy projects including a ground source heat pump, a biomass system, and a solar array on the grain store. 

Nick regards himself as a custodian of the land and says: “I want to enjoy it for what it is and hand it over to my sons in a better state than I received it.” 

To achieve this, he is working to integrate practices which enable him to farm in harmony with nature. This includes planting herbal leys for the cattle to graze as part of his stewardship agreements, alongside sowing unproductive areas of arable ground with wild bird seed mixes, and establishing wild-flower enhanced field margins to encourage pollinators, and he believes this has benefited his main arable enterprise. 

“Generally, we don’t use insecticides at all anymore since planting the environmental strips because they seem to harbour beneficial insects which eat the unwanted insects in the combinable crops,” explains Nick. “I would say that by not using insecticides, we’re probably saving around £20 an acre a year in costs.” 

He is also enjoying savings on his water costs thanks to a rainwater harvesting system, which provides both drinking water for the cattle and water for the sprayer on the arable enterprise. 

Nick adds: “Lloyds has helped with the overall family business strategy planning to help me achieve my ultimate goal – to farm in a sustainable way whereby there’s room for nature, food production and profitability.” 

Daniel Roberts, Moor Farm, Baschurch, Shropshire 

Daniel Roberts is integrating regenerative practices onto his farm to create a sustainable and profitable business. Together with his wife Melissa and her parents Mike and Hazel Timmis, Daniel runs the 154-hectare Moor Farm near Shrewsbury. 

The farm comprises a broad portfolio of enterprises including the 60-cow Shraden herd of pedigree Herefords, a successful farm shop and café, a 2,000-tonne grain drying and storage facility, a 4ha international grade polo pitch, and 36ha of arable land. 

Daniel says 2018 marked the start of the family’s regenerative farming journey and a change in focus at Moor Farm. “That year we won the Royal Welsh and Three Counties shows and sold a heifer for a record-breaking 7,500 guineas,” he says. “While, on the face of it, it was the most successful year we’d ever had, we actually made a £3,000 loss on the cattle and we thought ‘this doesn’t make sense, something’s got to change’.” 

Inspired by prominent regenerative agriculturalist, Gabe Brown, the family set about overhauling the business – starting with the cattle. 

“We had always wanted to go fully grass-based and be more regenerative, so we decided to cut out our ad-lib feed bill, which immediately saved £30,000,” says Daniel. 

“We started strip grazing and, in hot, dry years like 2025, we still have quite a lot of grass for the cows to work through, which wouldn’t be the case if we weren’t using this system.” Daniel says support from Lloyds has been instrumental in helping the business develop and evolve over the years. 

Investments made with the environment in mind include the creation of a rainwater harvesting system comprising a 90,000-metre subterranean tank, which provides drinking water for the livestock, and a 100kW roof-mounted solar array which powers the farm shop and café. 

Daniel says the family is also making use of grant funding and subsidy support schemes as part of their regenerative farming journey and the farm has been involved in a Soil Association Exchange baselining audit, funded by Lloyds. 

There are six key principles which underpin sustainable and regenerative farming practices in the field

1. Minimise soil disturbance. Achieved by reducing or eliminating tillage and avoiding excessive chemical use. It protects soil structure, prevents erosion and preserves microbial and fungal networks.

2. Keep soil covered. Using cover crops, crop residues and mulches to shield the soil from wind, water erosion and extreme temperatures while feeding soil organisms.

3. Maintain living roots year-round. Growing cover crops or perennials so living roots are always in the ground. 

4. Foster biodiversity. Planting diverse crops, integrating livestock and encouraging beneficial insects. 

5. Integrate animals. Managed grazing and livestock integration mimic natural ecosystems. Adds fertility, cycles nutrients and enhances land productivity.

6. Contextual and adaptive management. Adapting practices to the local environment, climate, and community needs. 

Michael Strother, J M Strother and Son, Wooler, Northumberland

The Strother family has farmed in Wooler, north east England, for four generations, and is focused on creating a balanced, sustainable farm that improves both profitability and environmental stewardship.

Having worked in agriculture from a young age, Michael Strother inherited the challenge of managing a marginal farm with thin soils and rocky terrain. He has been able to make the farm more resilient through a concerted mix of diversified enterprises, including beef and arable production, as well as a focus on sustainability.

Michael says: “Historically, the push has always been towards extreme animals and pushing the ground to its maximum, with bigger machines and bigger capacity. But I'm not sure that’s sustainable anymore. The key now is figuring out how we can work smarter and make sure we have a backup plan.”

Over the past decade, Michael has actively pursued regenerative farming practices. Beginning with a shift towards holistic grazing, diverse crop rotations and the adoption of herbal leys, the farm's regenerative efforts have led to improved soil health, greater biodiversity and improved financial stability. 

This focus on soil health is amplified by Michael’s participation in the Soil Association Exchange Market, a carbon emissions reduction pilot initiative funded by Lloyds and other companies, which allows farmers to earn income for carbon sequestered in their soils. 

Part of the farmer steering group that helped shape the scheme from the ground up, Michael is enthusiastic about the potential of the programme.

The integration of agroforestry, through land-sharing with the Forestry Commission, is another key step in the farm's journey. Using mid-tier and higher-tier stewardship schemes, Sustainable Farming Incentive (SFI), capital grants for hedges, and county funding, Michael has transformed a previously unproductive field, planting over 200 metres of hedge and more than 50 trees. This is enhancing biodiversity and creating new income streams for the farm through sustainable land use. 

“Farmers want to do things for the environment, like planting herbal leys, but very often the set-up costs are prohibitive. If they can enrol on a scheme and it helps with those costs, both their bottom line and the environment will benefit,” he says.

In partnership with the Woodland Trust, Lloyds is helping farmers and landowners across the UK contribute to a greener, more sustainable future. Since launching a 10-year initiative in 2020, the initiative has already planted 5 million trees across the UK, reaching a milestone with the help of 3,700 farmers. The partnership offers support through the MOREwoods and MOREhedges schemes, providing trees, funding, and expert advice to integrate trees and hedgerows into agricultural practices. This effort not only aids climate mitigation but also supports biodiversity, habitat creation, soil health, and reduces flood risk, providing long-term benefits for farm productivity and sustainability.

Scone Estates, a 7,500ha family-run estate in Perthshire, has integrated sustainability into its long-term business strategy through a 275ha woodland creation project. Known for its historic significance and diverse land use, the estate combines in-hand and tenanted farming, forestry, and tourism.

Scone blended private capital with a £500,000 loan from Bank of Scotland’s Clean Growth Finance Initiative (CGFI) with the Scottish Forestry Grant Scheme (FGS) to fund the project, enabling the restoration of storm-damaged tree cover and providing a future site for public access and recreation that will enhance biodiversity, and sequester carbon.

This mixed funding approach helped overcome the challenge of high upfront costs while waiting for grant payments and supported local jobs through the use of local contractors for planting, fencing, and mounting.

Actions: Diversified crop rotation, integrated pest management, reduced tillage, use of organic manures, increased environmental stewardship schemes.

Benefits: Improved soil health, increased biodiversity, reduced carbon footprint, reduced inputs, machinery savings, less financial volatility.

This 2,000-hectare poultry farming business operates an indoor broiler system across multiple units in England, producing 35 million birds per year on 45-day cycles. Where possible, up to 14,000 tonnes of wheat per year, grown from its own contract farming and arable enterprises, is integrated into the poultry ration. In a circular approach, the use of nitrogen-rich litter is returned as organic fertiliser for the arable farm.

The arable enterprise has adopted a number of regenerative practices, including direct drilling, incorporating cover crops ahead of spring cereals and companion cropping within certain rotations. Costs for this have been self-funded, except for the purchase of a Sumo 6m strip tillage drill at £106,000, 40% of which was grant funded by the LEADER scheme.

The business shows wider dependency on Government funding, having entered into a Countryside Stewardship Scheme generating £31,000 per annum and SFI at £54,000 per annum. Due to its relationship with poultry integrators and retailers, the business undertakes a number of audits including carbon foot printing. Soil health has improved, and artificial fertiliser use has decreased as a result of the practice shifts, meanwhile the introduction of renewable energy systems and efficiency measures has improved the carbon footprint, though it’s hard to directly link these changes to regenerative farming.

Actions: Diversified crop rotation, integrated pest management, reduced tillage, use of organic manures, livestock integration, increased environmental stewardship schemes.

Benefits: Improved soil health, reduced inputs, less financial volatility.

This family-owned farm operates a 1,100-head breeding sow unit on an arable farm in Suffolk. Rotations of spring barley, maize, onions and turf are planted on its sandy soils. The livestock side of the business is run in-hand with arable cropping let to third parties. Breeding sows are outwintered with all progeny sold via contract with ABP.

Twenty years ago, this business was solely an arable and vegetable cropping farm but, noticing a decline in yields and soil fertility, pigs were introduced to improve fertility within the arable rotation. Crops are established using minimum till where possible and the business has been able to continue arable farming with lower artificial inputs thanks to the organic matter provided by the pig manure.

All costs associated with the transition have been self-funded and the farm entered into a SFI scheme for field margins and removing field corners from production. This generates circa £10,000 per year. Stability has also been brought to the farm from the income associated with the ABP contract.

Actions: Diversified crop rotation, herbal leys, companion cropping, integrated pest management, livestock integration, use of organic manures.

Benefits: Improved soil health, increased biodiversity, improved gross margins, reduced machinery fleet, increased cattle numbers, reduced gross margin costs, increased sales of surplus forage, less financial volatility. 

This owner-occupied dairy farm in Cumbria spans 490 hectares of heavy clay soils. Originally an arable unit with a year-round calving system and 170 milking cows, it transitioned two years ago to a grass-based, New Zealand-style spring calving system. Cows are grazed outdoors on herbal leys for nine months of the year.

A £2million investment was made to build a new parlour, install cow tracks and plant herbal leys and low-input pasture. This was partly funded by SFI, generating £120,000 annually, with the rest financed through bank loans and delayed seed supplier payments.

The farm increased stock to a 650-head herd and while milk yields dropped from 9,500 to 5,000 litres per cow, costs also fell from £3,774 to £1,349 per cow due to the outdoor grazing. The farm also reduced machinery and equipment, lowering future repair costs, while reduced synthetic fertiliser, herbicide, insecticide and pesticide use have resulted in savings.

In some years, the farm sells surplus forage to local sheep graziers or other cattle units, which generated £32,345 in 2024. However, as yield is weather-dependent, it impacts the surplus/deficit position. In 2024 gross margin increased by nearly 50%, rising from £370,050 in 2023 to £542,972.

Actions: Diversified crop rotation, integrated pest management, herbal leys, livestock integration, mob grazing, use of organic manures.

Benefits: Improved soil health, increased biodiversity, reduced carbon footprint, reduced inputs, machinery savings, reduced feed and bedding costs, increased stewardship revenue, herd numbers maintained, improved gross margins, less financial volatility.

This 120-hectare owner-occupied farm in Devon, on clay loams, previously ran a conventional set stocking system with Red Devon cattle. The herd, sold as stores, spent six months housed over winter before grazing permanent pasture, with fertiliser applications to maintain grass growth.

In 2022, the business transitioned to organic farming, removing synthetic fertilisers, herbicides and insecticides from its operations. To support the change, its Countryside Stewardship (CS) agreement, previously worth £4,000 a year, was revised to include organic conversion options. These ‘conversion’ payments, which started in 2023, increased support to £20,000 per year over a five-year term.

As part of the new agreement and accompanying capital works, the farm redesigned its grazing strategy and water infrastructure. The 1-4 hectare fields were split into 1-1.5 hectare paddocks using electric fencing and solar energisers, with additional water troughs installed. This enabled a mob grazing system using two to three day moves in 30-40 day rotations. Surplus grass was cut for winter feed, with hay cutting options in place on fields with greater species diversity to ensure seed replacement. The incentive now is to make hay rather than silage.

Herd expansion has been discouraged by recent drought conditions, which reduced spring grass growth and limiting summer grazing. Even so, rotational mob grazing has improved resilience, sustaining production at levels that would not have been possible under the old system.

The 500% increase in CS revenue initially offset lower cattle sales and transition adjustments. With stronger beef prices and finished cattle now coming through, the farm is more financially stable. With profitability reliant on CS payments, the importance of blended public-private sector funding to deliver both environmental as well as economic outcomes is clear.

Actions: Reduced tillage, zero tillage, diversified crop rotations, leaving crop residues, cover and companion cropping, integrated pest management, livestock integration, mob grazing, herbal leys.

Benefits: Improved soil health, reduced carbon footprint, reduced inputs, machinery savings, increased stewardship revenue, improved gross margins, less financial volatility.

This 1,880-hectare owner-occupied arable business in Bedfordshire is part of a wider landed estate. All operations are carried out in-hand, with additional contracting offered to neighbouring farms. Soils vary from sand to clay loams.

The retirement of the farm manager in 2018 triggered a review of the system, which relied on heavy cultivations and a short cereal-based rotations. Concerned about long-term soil health and resilience, the new manager introduced minimum tillage, cover crops (ahead of spring cereals) and companion crops and more diverse four- to five-year rotations incorporating legumes, peas and beans, supported by CS agreements.

This required significant investment of £214,000 in new equipment, including a Vaderstad cross cutter, bio drill and Horsch Avatar drill. Heavier tractors and the plough were sold in favour of lighter machinery, with all costs self-funded.

Five years on, the farm receives £325,000 annually from CS and SFI payments, though profitability remains heavily dependent on these schemes, both of which expire by 2026 – again highlighting the need for blended public-private sector funding and dedicated transitional funding support. Environmental options include the removal of insecticides, buffer strips, flower-rich margins, grassy corners, winter bird food, and legume fallows. The generation of carbon credits also brings an additional £30,000 of income per year.

Oilseed rape has been retained in the system alongside the use of buckwheat as a companion crop and now delivers an average margin of £670/ha thanks to reduced insecticide costs and improved yields. Overall, gross margins across the business have increased by 62% per acre since the transition.