Exploring Positive Incentives for Sustainable Land Management: Highlights from BIOFIN’s Teach-In with DEFRA

By Jasmin Blessing, Gender Advisor, Biodiversity Finance Initiative (BIOFIN), UNDP

On 18 February 2026, UNDP’s Biodiversity Finance Initiative (BIOFIN) convened a peer-learning “teach-in” with colleagues from the UK’s Department for Environment, Food & Rural Affairs (DEFRA) to explore England’s transition from traditional agricultural subsidies to environmental land management incentives.

The session was sparked by growing interest from BIOFIN countries, particularly the Philippines, in exploring positive incentives as an alternative to harmful subsidies. As several countries examine how to repurpose public expenditure toward biodiversity and climate outcomes, England’s experience offered timely insights into the political, financial, and institutional dimensions of reform.

Below are key highlights from the discussion that resonated strongly with participating country teams.

1. Systemic reform often requires a trigger

One of the most important reflections emerged during the discussion on the political economy of reform.

England’s departure from the European Union created a rare policy window. Leaving the EU’s Common Agricultural Policy meant the UK had to redesign its agricultural support system from the ground up. What could have been a disruptive moment instead became an opportunity to rethink the purpose of public agricultural finance.

As highlighted during the exchange, not all countries experience such a catalytic moment. Yet the lesson is clear: meaningful subsidy reform often requires either a strong external trigger or deliberate political leadership capable of bringing stakeholders together to reimagine the system.

Even where such moments do not arise, deliberate efforts to build momentum, through dialogue, pilots, and evidence, can help move discussions forward.

2. Gradual transitions and safety nets are critical

England’s reform has not happened overnight.

A seven-year transition period has been introduced to phase out area-based payments while gradually scaling up new environmental incentive schemes. Payments were “delinked” from land ownership and progressively reduced, providing farmers with predictable income streams during the adjustment period.

This transitional approach has helped manage resistance while maintaining economic stability. Reforming long-standing subsidy systems inevitably creates uncertainty; clear timelines and gradual payment reductions are therefore essential to maintaining trust and political feasibility.

For countries considering repurposing harmful subsidies, this lesson underscores the importance of sequencing, pacing, and communication.

3. From paying for land to paying for public goods

At the heart of England’s reform is a conceptual shift.

Under the previous system, payments were largely based on hectares owned, disproportionately benefiting larger farms and not directly rewarding environmental performance. Under the Environmental Land Management (ELM) programme, incentives are linked to actions that deliver environmental outcomes.

More than 100 eligible actions support improvements in soil health, hedgerow restoration, integrated pest management, agroforestry, habitat conservation, and landscape recovery. Public finance is therefore increasingly tied to measurable environmental benefits rather than land ownership alone.

For BIOFIN countries exploring biodiversity finance solutions, this shift illustrates how existing public expenditure can be redirected toward ecosystem services, biodiversity gains, and climate mitigation without necessarily increasing overall spending.

4. Reform designed with farmers, not imposed on them

A recurring theme throughout the session was co-design.

England conducted one of its most extensive and responsive public consultations in recent history, engaging widely with farmers’ unions and representative bodies. More than 2,000 farmers voluntarily participated in early pilot schemes, providing direct feedback that helped shape the final policy design.

Government representatives emphasized that trust-building was essential. Farmers were not passive recipients of reform; they were partners in shaping it. Continuous dialogue, through agricultural shows and stakeholder platforms, helped maintain momentum even through political changes and a shift in government.

For countries navigating complex stakeholder landscapes, this reinforces the importance of inclusive engagement strategies and pilot phases to test and refine new incentive mechanisms.

5. Environmental ambition must support farm viability

A key takeaway from the discussion was that environmental ambition and farm viability must go hand in hand.

England recently launched a Farming Profitability Review to ensure that new environmental schemes do not weaken farmers’ businesses. Instead, the goal is to help farms remain productive, resilient, and competitive while delivering environmental benefits.

This balance is essential. Incentive schemes are more likely to succeed when farmers see them as strengthening their long-term stability, not adding new burdens. Framing reform as an opportunity for innovation and diversification, rather than as a restriction, can help build lasting support

Emerging reflections and growing global interest

The discussion also highlighted issues particularly relevant to BIOFIN’s work.

Participants emphasized the importance of integrating gender perspectives into incentive design. Financial incentives do not affect all farmers equally. Women farmers, for example, may face different barriers in accessing land, information, or finance. Understanding who can access and benefit from new schemes is essential to ensure incentives are both fair and effective.

While gender has not been a central focus of England’s approach to date, where many farms operate as family-run businesses, it was acknowledged that more could be done in this area. Inclusive design was recognized as important, particularly in contexts where structural barriers to participation may be more visible.

There was strong engagement from colleagues in the Philippines, India, and Tanzania, reflecting growing interest in positive incentives as an alternative to outright subsidy removal. Participants were particularly interested in practical questions: how payment levels are calculated, who is eligible, how pilots are structured, and how tenure issues are addressed in different contexts.

Given the level of interest and the depth of discussion, there is clear potential to expand this exchange into a more comprehensive webinar, or peer-learning series focused on designing and implementing positive incentives.

England’s experience demonstrates that repurposing subsidies toward biodiversity and climate outcomes is not merely a technical exercise. It requires careful planning, steady implementation, and strong engagement with stakeholders. Reform takes time, clear communication, and a long-term vision.

For BIOFIN countries exploring how to redirect public finance toward nature-positive outcomes, this teach-in provided valuable insights and reinforced the importance of continued dialogue and shared learning across the network.