New opportunities taking root

Diversification is nothing new to landowners but what they are branching out into is.

Planting woodland is becoming increasingly popular amongst Scottish landowners of all shapes and sizes, providing a culturally popular, low maintenance alternative to food production, whilst making use of otherwise underutilised, or low-grade land.

The growing awareness around climate change and the push to stem rising temperatures through mitigating measures has also accelerated the uptake of woodland planting.

Whether it is flood prevention, promoting soil health or carbon sequestration there is a woodland design and system that will fit just about any type of ground.

In addition to the generous government support, farmers may stand to gain from potentially lucrative carbon credit contracts.

But with any new venture comes new risks – and carbon credit contracts are riskier than most.

Carbon credits conundrum

Traditionally, carbon credit contracts have been high risk ventures, with no way for woodland owners to protect themselves against their liability to re-pay or replace any lost carbon credits.

With extreme weather events becoming increasingly common and new pest and disease threats constantly emerging, vulnerability to losses is becoming more acute.

Although farmers may be keen to enter into contracts to sell carbon credits, they should be aware that the contracts are often very open and could leave farmers liable for large repayments in the event of a loss.

Furthermore, with the potential for the market to increase the value of sequestered carbon means losses can be unpredictable and on a large scale, leaving any income generated exposed.

Lycetts is reacting to this gap in cover, however, and provides enhanced woodland cover, which offers woodland owners protection against such large losses, allowing them to continue their operations, without the need for excessively large cash reserves.

It is also worth noting that woodland insurance is a requirement of most grant funding. Protecting against major losses not only helps businesses to plan more effectively for the future, but can also create a degree of stability in an uncertain market and provide peace of mind as farmers navigate new terrain.

To find out more, contact Rory at Rory.Gibson@Lycetts.co.uk or call 07769 269261.