In simple terms, regenerative agriculture is food production that repairs and improves soil health, but what that means on the ground is complex. Defining it, or indeed whether there is a need for a definition, remains subject to debate. Our 2021 Spotlight on Regenerative Agriculture introduced the topic and the five regenerative principles. Since then, ’context’ has been proposed as a sixth principle but has not been universally accepted.

At the recent Future of UK Agriculture conference, delegates including farmers, buyers, researchers and applied scientists were asked whether having a universal definition of regenerative agriculture was important. Over half of the 79 respondents said yes and mostly suggested it should be broad, flexible, inclusive and easy to understand. This highlights the challenge, a universal definition is generally considered important to prevent greenwashing and support marketing claims. Still, a farm’s physical and environmental conditions are not uniform so production systems are complex and adapted to specific circumstances. Hence the call for flexibility and the suggestions elsewhere that context should become a core principle of regenerative agriculture.

The uptake of these regenerative agriculture principles in the UK is on the rise, including by those who wouldn’t necessarily consider themselves to be a regenerative farmer. It is being driven by farmers’ growing awareness that soil is a complex and dynamic living system, not an inert substrate – and the preparation and introduction of supportive policies and financial incentives across the UK. Supply chains are a significant accelerant, compelled to reduce their environmental impact by their own net zero goals. The UK government requires sizeable private sector businesses to report their impact following the Task Force on Climate-related Financial Disclosures framework. Businesses including Arla, Carlsberg, Colmans, Honest Burgers, McCain, Nestlé, The Ethical Butcher and Waitrose are setting targets or developing projects and supply chains that follow regenerative agriculture practices.

Earning regenerative premiums

Our analysis is that early adopters, or those committed to more stringent production standards, will be rewarded with premiums for regenerative agriculture produce – and these will endure where they are tied into premium food products. More broadly the initial action in food chains has focused on short chains where food processors or supermarkets have a high degree of influence and the farm produce is a core part of the product. However, all ingredients form part of their carbon and environmental footprint, so in time the same sustainability or regenerative expectations will filter down to the commodity supply chains – such as cereals too. Which means, in the longer term, we can expect regenerative agriculture to become the norm.

Wildfarmed and The Green Farm Collective offer premiums to cereal farmers in Britain and have developed their own regenerative farming standards that growers are independently audited against. These define the production practices farmers must follow and cap or exclude the use of certain inputs.

Wildfarmed focuses on milling wheat grown with companion plants or as a bi or polycrop with pulses. The company has built a strong brand and sells its regenerative flour and products to bakeries, delis, restaurants and supermarkets.

The Green Farm Collective is also developing a premium market for milling wheat. It aims to have an impact at scale with a standard that is more restrictive than general farm practice but permits higher artificial input use than Wildfarmed. The Green Farm Collective guarantees a premium of at least £20 per tonne, over and above the usual milling premium.

Financing the transition

Last year, Savills Rural Research modelled adopting a regenerative system on its Virtual Farm – a top 25% arable producer that farms 810 hectares of clay-based soils in the East Midlands. We compared agricultural cropping income, England’s SFI and carbon scheme income in a conventional system and after years one and six of regenerative farming. Basic payment scheme and de-linked payment income were excluded. Our 2023 results showed that the net margin from a regenerative farming system was 41% lower than the conventional system in year one of the transition, but by year six it exceeded the conventional system by 18% (Figure 8).

Since then, Defra has improved some SFI payment rates and crucially announced new options that support the transition to a regenerative agriculture system. These include £73 per hectare for no-till farming. Elsewhere in the UK, proposals for future agricultural schemes continue to develop, but there are no specific details. Both Scotland and Wales have ambitions to be global leaders in sustainable agriculture. Regenerative principles will be widely encouraged and supported in Wales from 2026 via universal actions in the Sustainable Farming Scheme and by Scotland’s new scheme from 2027.

The Virtual Farm conventional and regenerative farming models have been updated to reflect 2024 farming economics and the new SFI options (Figure 5). Within the regenerative model, our update included 100% no-till farming and expanding longer-term environmental land uses such as grassy field corners and flower-rich margins to 5% of the farmed area. A regenerative premium is also being targeted on the 96-hectare spring milling wheat crop, so an additional £20 per tonne premium has been included and nitrogen use cut to comply with the standard’s requirement.

Mind the gap

Switching to no-till and regenerative farming will in most cases affect yields whilst the farmers’ knowledge develops and soil health improves. Informed by published research, we assumed yields were reduced by 26% at the start of the transition with some recovery to 18% below conventional levels by year six. Fixed costs were reduced by 22% in year one to reflect the adoption of no-till. Variable cost savings increase as time passes due to the integration of cover and catch crops and improved soil health. This enhances nutrient cycling and reduces artificial fertiliser requirements.

The impact in the initial years of the transition is that the net margin from food production falls 64% relative to a conventional system (Figure 6).

The additional income from the SFI, carbon, and regenerative crop premiums helps to bridge the gap to some extent. It improves the overall net margin by £250 per hectare compared to £49 per hectare under conventional cropping (Figure 7).

There is still a ’transition gap’ in the farm’s finances, but the enhancements to the SFI have reduced it significantly compared to 2023. The Virtual Farm’s overall net margin in year one is now just 10% below the conventional margin, last year this deficit was 41%. Making the transition is therefore less costly, particularly if the business can support its cash flow by selling surplus machinery. Longer-term prospects have also improved, by year six the regenerative system margin now exceeds the conventional system by 31% (Figure 8).

Switching to a regenerative system is a significant undertaking, and there is no one-size-fits-all approach – hence the difficulties defining it. Our model demonstrates that stacking public and private payments alongside food production can facilitate changing to a more resilient and profitable system. Long term, it’s really a question of whether farmers can afford not to be farming regeneratively.

_{Read the articles within Spotlight: Food and the environment below.}