Cotswold Catchment Payments for Ecosystems Services...

Cotswold Catchment

Payments for Ecosystems Services Pilot

Catchment Based Approach Collaborative Project Demonstrating the Integrated Local Delivery Framework

Funded by Defra

NE0144 Final Report

02nd June 2014

Prepared by PES pilot leads:

Chris Short (CCRI, University of Gloucestershire) and

Jenny Phelps (FWAG SW)

With inputs from

Daryl Henehan (Thames water), John Turvill (Ecotricity), Prof Chad Staddon (University of West of England) and Sarah Wells (FWAG SW)

June 2014

Cotswold Catchment Payments for Ecosystem Services Pilot (Project Code NE0144)

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Summary of Project Project Title: Cotswold Catchment Payments for Ecosystems Services Pilot Client Reference: Defra NE0144 Start Date: April 2013 Finish Date: 31 march 2014, report updated and revised 20 June 2014 Duration: 12 months Project Manager: Chris Short Research Team: Jenny Phelps (FWAG SW), Daryl Henehan (TW), John Turvill (Ecotricity), Chad Staddon (UWE), Sarah Wells (FWAG SW). Date of Report: 20 June 2014 Oxstalls campus, GLOUCESTER Gloucestershire GL2 9HW www.ccri.ac.uk Suggested citation:

Short C, Phelps J, Henehan D, Staddon C, Wells S and Turvill J (2014) Cotswold Catchment Payments for Ecosystems Services Pilot: Catchment Based Approach Collaborative Project Demonstrating the Integrated Local Delivery Framework, Defra Project Report NE0144, Defra funded Round 2 PES pilot. CCRI: Gloucester.

Acknowledgements

The authors would like to thank Defra and in particular the Ecosystem Services team, notable Helen Dunn and Colin Smith, for providing the Round 2 PES pilot funding for the Cotswold PES Pilot. The Ecosystem Services team and the overall Steering Group also provided a good deal of support and encouragement throughout the last 18 months and we hope this continues. The research would not have been possible without the support, input and willingness of farmers, landowners, local communities and other members of the Upper Thames Catchment Steering Group giving up their time to participate in the various discussions and face-to-face meetings. The collective participation and the workshops, meetings and site visits have been crucial, meaning that our thanks to them is substantial. All errors are the responsibility of the authors and no views expressed herein should be taken to reflect those of the funders, UK Government or of other partners who assisted in the work.


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Contents Page

Summary of Project ……………………………………………………………………………….1

Contents ……………………………………………………………………………………………..2

Executive Summary ……………………………………………………………………………….3

Response to Key Defra Challenges …………………………………………………………….8

1. Background ……………………………………………………………………………….11

2. Methodology and Approach ……………………………………………………………12

Objective 1 Identify key ecosystem services ……………………………………….12

Objective 2 Develop the buyers perspective ……………………………………….15

Objective 3 Evaluate and develop sellers perspective ……………………………18

Objective 4 Field trials to establish evidence base ……………………………….19

Objective 5 Develop PES framework for Upper Thames ………………………….22

3. Next steps ………………………………………………………………………………………..23

References ………………………………………………………………………………………….25

Appendix 1 – Cotswold PES Steering Group ………………………………………………..26

Appendix 2 – Detailed map of Ampney Brook (WFD 30300) ……………………………...27

Appendix 3 – Detailed Maps of Parishes ……………………………………………………..28

Appendix 4 – Adaption of the Habitat matrix ………………………………………………..29

Appendix 5 – Notes from Sellers introductory event ………………………………………30

Appendix 6 – Details of Cotswold PES water monitoring in Ampney Brook ………….33


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Executive Summary The Cotswold (Upper Thames) Catchment is a small/medium sized catchment predominantly rural in character but with some urban pressures at the top of the Thames River Basin (See Figure 1). The northern part of the catchment falls within the Cotswolds Area of Outstanding Natural Beauty and the southern part within the Cotswold Water Park and the growing town of Swindon with smaller communities scattered throughout the catchment. The northern area of the catchment is characterised by Oolitic limestone which is a store of groundwater with predominantly thin limestone soils. According to the current Upper Thames Catchment Plan a third of surface rivers are failing to achieve ‘good ecological status’ (GES) with another third classed as ‘moderate’ status. Groundwaters are also failing to achieve GES. The project was a direct result of the Upper Thames Catchment WFD pilot that had identified key threats and opportunities in the catchment. One threat was the ending of an Environmentally Sensitive Area (ESA) option for arable reversion to grassland, mostly for landscape purposes. An estimated 10,000 hectares came under this option and by 2012 only a third of these agreements remained, covering about 3,500 hectares. It was anticipated that a large proportion of this grassland area would soon be ploughed up and returned to productive arable land. The impact of this land use change on a wider range of ecosystem services, such as diffuse pollution, flood alleviation or drinking water quality was unknown. For this reason and starting from a very low base point the partnership explored the potential of PES to offer a win-win situation for both farmers and beneficiaries. Therefore an early question for the PES project was to identify potential sellers and buyers/beneficiaries. Since the catchment was based on a partnership approach this was extended to the PES pilot ensuring that a collective approach was taken to analysing the issues, obtaining the evidence and developing a PES to mitigate any potential negative impact on ecosystems services within the catchment. As a result the Cotswold PES pilot had five objectives:

1. Collect and integrate existing data as part of a detailed evidence base; 2. To develop a PES framework from a ‘buyers’ perspective; 3. To survey and evaluate ‘sellers’ and develop a PES framework from ‘sellers’

perspective; 4. Assisting in discussions concerning the location of field trials to address knowledge

gaps in the evidence base; and 5. To develop and agree a PES framework for the Upper Thames Catchment

A strong emphasis was placed on stakeholder engagement throughout the year with both buyers and sellers involved in shaping the PES framework from an early stage. The partnership started from a very developmental starting point and therefore focussed on Steps 1 and 2 of the Defra Best Practice Guide (Smith et al. 2012):

Step 1 - Identify a saleable ecosystem service, or services, and prospective buyers and sellers

Step 2 - Establish PES scheme principles and resolve technical issues. All 5 objectives were progressed, leading to the first 2 steps underpinning the PES best practice guidance secured. Reporting on the overall progress of these steps taken forms the basis of the report on this pilot exercise. The main outcomes of this PES pilot were:

the successful use of the integrated local delivery (ILD) framework to determine the saleable ecosystem services and develop the PES framework;


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a list of prioritised land management options discussed by both buyers and sellers forming the basis for follow-on discussions. This included consideration for the development of a Grassland Code, similar to the Woodland code to maximise the benefits of grassland for ecosystem services and provide a sustainably management source of material for renewable energy production through AD biomass production;

to deliver a proposal for a ‘layered’ PES arrangement that could provide a range of ecosystem service benefits to a range of buyers provided by many farmers and landowner (sellers) in the catchment.

Objective 1: Collect and integrate existing data to identify key ecosystem services. This phase used the Integrated Local Delivery (ILD) framework in order to identify the ecosystem services that would form part of the PES structure1. The scoping aspect of ILD enables the environmental assets within each catchment, and the relevant partners, to be identified. From this a forum for shared problem solving and understanding of the catchments' priorities can be created. A key element of this forum is knowledge exchange between the sellers and beneficiaries and buyers within the PES framework. The PES pilot has shown the ILD framework to be a viable and valuable process, which has strong synergies to widely recognised approaches within natural resource management. Existing data sets from across the whole Upper Thames catchment have been integrated in order to provide the spatial evidence to support ILD. The spatial aspect is particular important for the development of the partnership as it facilities discussion at the local level on how different ecosystem services interact and can assist in Step 2. The main sources are Catchment Sensitive Farming (Natural England), Water Framework Directive-related data (Environment Agency), a range of data from the Local Authorities, Thames Water (water quality data) and others including information from Ecotricity, a renewable energy provider based in Stroud, Gloucestershire. A detailed map of the principal farms within the Ampney Brook was combined with detailed parish maps for parishes within the pilot area where trial farms are located (Objective 3). The resulting integrated database shows key agricultural information, environmental assets, flooding data and WFD priorities. An example is shown in Appendix 3. The ILD framework was found to be a robust process in identifying the ‘bundles of ecosystem services’ that exist within any one geographical area, from which the sellers and beneficiaries/buyers natural flow. The steering group feel that this process is transferable and would alleviate the ‘cherry picking’ of ecosystem services that can sometimes occur in PES schemes. Objective 2: To develop a PES framework from a ‘buyers’ perspective. After a series of meetings the key buyers within the Cotswold PES are identified as being:

Thames Water – for management of metaldehyde, propyzamide, carbetamide and other difficult to treat pesticides to solve potential drinking water quality issues;

Ecotricity – for development of energy through anaerobic digestion using a code of good practice linked to sustainable land management;

Cotswold AONB – amenity, landscape and recreation provision; Local communities – flood prevention and riparian access issues; Natural England – specific biodiversity and related targets outside of Agri-

Environment Schemes (AES) (e.g. the future of arable reversion established under the ESA); and

Environment Agency – specific WFD targets outside of future agri-environment schemes (AES).

1 ILD is a delivery framework developed by FWAG and CCRI (see Box 1) that enables the increased participation from partners, communities and farmers to improve the water environment (Short et al. 2010).


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Discussions are most advanced with Thames Water (TW) and Ecotricity due to specific business priorities. Thames Water is very clear that it is considering a range of options in order to reduce the projected costs of drinking water treatment. In particular, metaldehyde, the most commonly used active ingredient in slug pellets, and 2 commonly used herbicides (propyzamide and carbetamide) are not effectively removed by advanced water treatment. Ecotricity are keen to establish a long-term approach to land management that enables the sustainable generation of renewable energy through anaerobic digestion (AD) without detrimental impacts on the other ecosystem services in the catchment. Ecotricity’s aim is to employ a ‘Dry and Wet Phase’ Anaerobic Digestion (AD) process to produce biogas by harnessing the natural decomposition of organic matter in the absence of oxygen. The biogas is used as a renewable energy source to produce Biomethane for Gas Grid Injection (Biomethane to Grid (BtG)), electricity, heat and, digestate as an end-product that can be supplied back to participating farms as organic compost and liquid fertiliser. Objective 3: To survey and evaluate ‘sellers’ and develop the PES framework from a

‘sellers’’ perspective: Following the outputs of Objective 1, the PES pilot has been working with 12 (out of 17) main farmers and landowners within the Ampney Brook catchment (see Figure 1). Underpinning this objective was a recognition that many PES schemes start from the buyer’s perspective. The Cotswold PES wanted to avoid this from the start and have a stronger emphasis on stakeholder buy-in in order to ensure the development of a workable PES scheme from both buyer and seller perspectives. Meetings and discussions were held to enable farmers to become directly involved in the development of a local PES scheme and meet and hear from some of the prospective buyers and beneficiaries. The farmers provided some background information on their farm and the overview of the catchment highlights that there is a continued move towards the simplification of arable rotations with fewer arable enterprises and less grass and spring crops within these rotations. The trend of earlier establishment continues, notably of oilseed rape, and the main crops remain winter wheat and winter barley. There is a shift towards reduced cultivation with most not ploughing each season and some using minimum tillage for most of their cultivations. However several farmers noted increased weed pressures, for example blackgrass. The Ampney Brook remains a mixed catchment with equal numbers of cattle and sheep on livestock farms but the number of livestock farms and livestock numbers generally are decreasing. Farmers are far more aware of the nutrient levels in their soils than they are about organic matter or soil structure. Nearly all of the farmers are aware of and have some involvement with AES. A key outcome of the initial discussion, which will be investigated further during next phase of the PES, concerns the role of soils in providing ‘regulating services’ under an ecosystem services context. The current thinking is that a ‘living resilient soil’ is able to support various ecosystem services, such as improved water quality, flood alleviation, groundwater, increased pollination, landscape enhancement and regulating of water flow. The strongest link within the PES is for the introduction of grassland for either livestock grazing or for AD energy production as a means of increasing water filtration to improve the quality of drinking water. This approach includes the possibility of reversing of some aspects of arable dereliction as a result of farmed out soil organic matter by using the multi-species grass mix to develop viable root systems that in turn ‘creates’ organic matter and nutrients. An example species mix is currently available under Environmental Stewardship as option EK21 or HK21. This option includes a range of grasses, clovers and herb species and has been found to be quite effective in enhancing soil porosity and levels of organic matter within the Upper Thames catchment.


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Soil organic matter (SOM) has a positive effect on soil structural, biological and chemical processes with respect to water holding capacity and binding of chemicals and thus contributes to the improvement of water quality. Linked to this is the role of grassland in restoring soil structure as well as organic matter and resolving issues like compaction has been highlighted through the discussions as something to investigate further. However soil is a ‘slow’ variable and thus the benefits may not be immediate, which is a challenge as far as a PES scheme where payments are linked to the certainty of benefits. Objective 4: Assisting in discussions concerning the location of field trials to address

knowledge gaps in the evidence base: Following the meetings with buyers and sellers and a key outcome from the July meeting and subsequent discussions on methodology, a twin track approach has been decided.

a) Tests to be performed by farmers on their own farms. The focus was nitrogen, phosphate and ammonia in water as it entered and left their holdings.

b) Analysis of metaldehyde, propyzamide and carbetamide water levels. Access was given to a number of farms, allowing Thames Water to collect samples from watercourses upstream and downstream of their farms. These holdings offer a mix of farming approaches.

A summary of both approaches can be found in Appendix 6. A list of prioritised options was agreed and these will be tested further in the next phase of the PES project (see Table 3). The four main areas to be taken forward are:

Introduce approved soil management practice, (e.g. soil structure and porosity), possibly linked to a Grassland Code – aiming for multiple benefits;

Investigate whether a grass-based energy production component is a viable addition to arable rotations, using the Grassland Code to produce a sustainable source of material for energy production through AD biomass;

Influencing application management (e.g. prevent use of certain products or prior notification of use);

Support specific management interventions (e.g. siltration traps (SUDS), swales, winter sacrifice crops).

Some of the potential land management options are operational rather than capital investments, which when making PES arrangements are known to be more problematic from buyer perspective. The main reason for this is that they lack the certainty of some capital investments, where the outcomes are known. The lack of certainty within the science evidence base was noted and the testing will continue and hopefully be expanded. The key criteria that were used to assess these options were:

The viability for sellers in terms of their farming system The level of certainty that the outputs associated with agreed options provide the

buyers An input-based approach, whereby sellers receive payment for agreed changes in

land management, was suggested. Some funds could be retained and linked to progress towards agreed outcomes.

The focus on approved soil management links to the role of porosity and soil structure in meeting multiple ecosystem services and the willingness of the buyers to support further investigation to test against the levels of uncertainty of this option. Also acknowledged was the key role that well managed deep rooted grasslands, both within an arable rotation and as permanent pasture in providing a range of ecosystem services, some of which would meet the need of the buyers and beneficiaries within the current partnership.


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Objective 5: To develop and agree a PES framework for the Upper Thames Catchment. The final step of the ILD framework process is the identification of capacity and role that a local management group, accountable to both local and national interests, might play in implementation. This was the starting point for discussion on PES administration. Agreed Cotswold PES scheme principles Ecosystem services Water quality (notably drinking water), Energy

production, Landscape, Tourism, Flood alleviation, Access, Biodiversity and WFD.

Buyers Thames Water, Ecotricity, Cotswold AONB, Local communities, Natural England and Environment Agency

Sellers Farmers and landowners (including woodlands) Intermediaries FWAG and Catchment Sensitive farming and other

farm/land management advisors Key Knowledge providers University research centres (CCRI, UWE, RAU) and

agri-business (Agrii) Geographical Scale Upper Thames catchment Contractual period 20-25 years Agreed interventions Introduce approved soil management practice; Introduce

a grassland code; Add energy production component to arable rotation; Influencing application management

Measures to minimize trade-offs Agreed indicators and monitoring framework Packaging of ecosystem services Preference for Layering, possibly bundling. Type of payment approach Input based payments, differentiated according to

layering. Proportion retained for outcome issues. Further work will determine an application process and monitoring and evaluation framework with agreed indicators to measure success. One example of this would be through proportions being ‘top sliced’ to support verification and some being held back under particular PES options. The latter suggestion is that a small proportion would be put into a ‘risk fund’, which might pay out to either party if certain conditions were breached, was considered and would be explored further. This aspect of the PES payment is seen as being output based and could act as reward alongside a guaranteed payment for a fixed number of years. The reward would act as an additional payment for successful delivery of the required output. The shape of the administrative structure that would deliver and sustain the PES would need to include the setting up of a robust process for negotiating agreements and developing opportunities for buyers and beneficiaries. A known and trusted arrangement that could be seen locally and trusted nationally was preferred. The favoured option to be explored more fully was to use the Gloucestershire Local Nature Partnership (GlosLNP) as the core base for the administration of the PES. Currently the partnership agrees that there are many buyers and beneficiaries within the PES dealing with one type of multiple sellers. The Defra PES guide describes this as a ‘many to many’ PES. The partnership have also ruled out a single PES with other benefits free riding on the back of this and currently prefer to think in terms of a ‘layered’ PES with payments attributed to a number of individual elements. These would not be event spread over the area. Some, like those relating to Thames Water’s need for clean drinking water, would be available across the Upper Thames catchment while other such as reducing flooding for a particular community would be more localised. Exactly how this works across the catchment is a key area of work for the implementation phase of the PES research.


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RESPONSE TO KEY DEFRA CHALLENGES

Has proof of concept been demonstrated? Are there showstoppers? Yes, the ‘proof of concept’ in terms of a layered PES scheme, made up of a number of elements relating to the key assets in the catchment has been accepted. This will take the form of payments to farmers for management that will enhance these assets and deliver outcomes that produce the benefits that buyers and other beneficiaries are looking for. Thus far no show stoppers have been identified. The concept of PES has been understood thus far by all involved (buyers, sellers, intermediaries and beneficiaries). It has been found to be challenging but no insurmountable barriers to further investigation and potential implementation have been identified. What is envisaged is a single scheme with a number of separate elements, a layered PES, which will meet the multiple challenges in the catchment. What is evident is that the situation is dynamic. This is true of land use and a PES scheme would need to be able to incorporate the concerns of sellers about the long term impact of any scheme on the capital value of land and potential impact on the structure of their businesses. Likewise the situation from buyers is also dynamic and any proposed PES scheme would need to be able to incorporate new issues, such as the presence of certain chemicals within the water, which arose during the PES pilot itself. All of this points to a PES scheme that is not fixed around a single ecosystem service, but a menu of services. The PES framework needs to be flexible enough to incorporate new services as a market for them arises. The PES scheme would contain a suite of measures and incentives that are appropriate for both buyers and sellers in that locality.

What is the “prize” / opportunity for PES, and can this be quantified? The prize is a resilient catchment that can better withstand future shocks to the system. Quantifying this is easier for some buyers/beneficiaries than others but all beneficiaries need to be considered together in either a ‘layered’ or ‘bundled’ PES structure. The prize in the context of the Upper Thames is the rewarding of sellers who are able to secure the appropriate management of ‘slow’ variables, such as high soil functionality based around structure and quality, which are able over a longer term to influence the quality of ‘quick’ variables, such as water quality. The missing link appears to be the need for a payment to farmers that enable management of these ‘slow’ variables, such as soil. This would be through appropriate land use management that enable farmers to farm with rather than against the ecosystem. From the sellers’ point of view the PES framework will attempt to enable farmers to make land management choices that enhance the economic and environmental resilience of their farm businesses. Quantifying this is clearly a challenge, one which has been the focus of attention for some time regarding PES. From a water quality point of view for the benefits to be realised by Thames Water the majority of the catchment needs to be covered by the type of management that the PES pilot has highlighted. From a flood alleviation point of view the area required to provide these benefits might be quite small and localised. Moreover, some ecosystem services are more readily quantifiable than others. Other pilots, like Upstream Thinking, have shown that calculating benefits of a PES approach on the provision of drinking water is achievable. However, determining the benefits for a landscape or flood alleviation perspective are more challenging. Within this pilot a list of prioritised actions that the sellers and buyers feel are the most likely to result in a successful outcome have been identified. The next steps will be to determine values and possible payment rates to these priorities.


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What has been achieved through the pilot? High levels of engagement and interaction between sellers, buyers and intermediaries have been secured and represent a significant achievement. This creates a strong platform that will feed into future projects. This has resulted in a collective willingness for greater innovation. The result of this engagement is a list of prioritised options that can be investigated further and to which payments can be developed. A fundamental principle from the pilot is the understanding of the key role of soil, as a ‘slow’ variable within the ecosystem. In this sense a range of ecosystem services are thought to be achievable where a ‘living resilient soil’ is already present or established. The amount of evidence to support this various, especially in terms of ecosystem services, but there are thought to be benefits for improved water quality, flood alleviation, improved groundwater, increased biodiversity, landscape enhancement and regulated water flow. Comprehensive European studies, such as SMARTSoils (http://smartsoil.eu/) and RECARE (http://www.recare-project.eu/) are attempting to pool knowledge on soils in order to provide a deeper understanding of the benefits that well managed soils provide. The pilot has identified the need for a PES scheme that can incorporate a range of farming types and approaches, respecting farming as a heterogeneous sector including conventional and organic farming. However the PES scheme would play a key role in sustaining the transition of all approaches towards a more sustainable land management approach that provides multiple ecosystem services. This would have to be a long-term goal given the range of approaches within the Upper Thames and the project has already identified some land management approaches, such as the renting out of arable land for short periods at high rents without management requirements, which pose the most likely threat to this being achieved. Nevertheless this need not be a show stopper to the PES ‘proof of concept’, as the core effort would be in determining the ‘good practice’ element that all approaches can adopt and ‘buy in’ to.

What is the legacy of the project? What can we say about the prospects for PES going forward? A central legacy of the pilot is the successful testing of the Integrated Local Delivery (ILD) framework in enabling the identification of appropriate ecosystem services, associated sellers, beneficiaries and buyers and establishing the principles of a PES framework. Using ILD has resulted in the establishment of a forum at which the proposed options have been discussed and established. Through this forum further discussions will take place and the potential effectiveness of these options will be determined. These options will form the basis for the PES scheme itself. The key buyers are identified as:






The forum established under this pilot will develop and agree the delivery mechanism and support the wider roll out of the PES scheme. The pilot has enabled a clear understanding of the potential role of a PES within the catchment. The PES scheme would be distinct from any AES agreements although these are likely to be complementary. Existing initiatives


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such as Catchment Sensitive Farming would remain important and run alongside the PES scheme. This is the current thinking of the PES steering group. As the PES scheme takes shape and the details of the new AES and revised Catchment Sensitive Farming programmes are released it will be important to determine how the PES scheme relates to other voluntary initiatives. Clearly the PES scheme will demand something additional to regulation. Establishing the exact requirements of the PES scheme will be important in clarifying this level of detail. The issue of minimum lifetime expectancy has been discussed and both the buyers and sellers are considering a minimum of 20-25 years as the life expectancy of any agreement. In particular the Thames Water requirement will be determined by external factors, particularly the water industry regulatory and investment cycles as well as crop values and changes in crop rotation practice. What are the lessons from the project? Stakeholder engagement is possible but takes time and has to run at the pace of the slowest participant. The PES steering group have all agreed that whilst it would be possible to meet the requirements of the project without engagement, say as a purely technical exercise in estimating the value of PES options, it would then have the fatal weakness of no stakeholder buy-in meaning that a PES could not be delivered. Building trust with farmers and land managers as sellers is seen as critical and key to the future success of this PES scheme. It is also important to recognising the contribution of farmers and the time they contribute should be considered as part of any future initiative. However, stakeholder engagement still retains an open mind, so that those attending can indicate if they feel that the PES approach is ‘too complex’ or if an alternative solution provides a more effective means of achieving the same goal. The willingness of sellers and buyers to discuss these issues directly is a very rewarding and successful way of progressing PES discussions quite quickly. In order to achieve this careful consideration should be given to venues where both buyers and sellers feel at ease and able to participate. For the former a local farm or village hall is excellent. For the latter providing food or offering to pay for the participation of land managers should be considered. Moreover, the role of intermediaries such as universities should be to broker dialogue and collaboration rather than the presentation of separately developed menus of options or technical solutions. How transferable is this to other parts of the country? Are there particular actions Government could be doing to facilitate or remove barriers? Yes it is transferable in terms of the process of using the ILD framework to identify the natural assets that might form part of the PES approach and the prospective sellers, beneficiaries and buyers. The process of identifying the options is more complex and there is not a ‘one-size fits’ all process. Setting aside small pots of money for rooms and resources to aid these discussions would assist in progress. The scoping of the assets in any locality is a bespoke process but the ILD framework provides a robust mechanism to ensure that all aspects are considered. This does require an initial investment in high quality facilitation. Within the Upper Thames, the development of a grassland code, if successful and robust would be easily transferable as a national initiative. The plan is to further investigate the potential and feasibility of a grassland code over the next year. This could be linked to other programmes, such as AES, and linked with current and further research undertaken to establish carbon sequestration of different land use types.


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1. Background The Cotswold (Upper Thames) Catchment is a small/medium sized catchment predominantly rural in character but with some urban pressures at the top of the Thames River Basin. The northern part of the catchment falls within the Cotswolds Area of Outstanding Natural Beauty and the southern part within the Cotswold Water Park and the growing town of Swindon with smaller communities scattered throughout the catchment. The northern area of the catchment is characterised by Oolitic limestone which is a store of groundwater with predominantly thin limestone soils. In the current Upper Thames Catchment Plan a third of surface rivers are failing to achieve ‘good ecological status’ (GES) with another third being only ‘moderate’ status. Groundwaters are also failing to achieve GES. The project was a direct result of the Upper Thames Catchment WFD pilot that had identified key threats and opportunities in the catchment. One threat was the ending of an Environmentally Sensitive Area (ESA) option for arable reversion to grassland, mostly for landscape purposes. These options are only available under the Higher Level part of Environmental Stewardship scheme and as a result would be far less widely available. An estimated 10,000 hectares came under this option and by 2012 only a third of these agreements remained, covering about 3,500 hectares. It was anticipated that a large proportion of this grassland area would soon be ploughed up and returned to productive arable land. The impact of this land use change on a wider range of ecosystem services, such as diffuse pollution, flood alleviation or drinking water quality was unknown.

Figure 1 – Upper Thames Catchment showing main land uses (EA 2014)


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For the reasons above and starting from a very low base point the partnership explored the potential of PES to offer a win-win situation for both farmers and beneficiaries. Therefore an early question for the PES project was to identify potential sellers and buyers/beneficiaries. Since the catchment was based on a partnership approach this was extended to the PES pilot ensuring that a collective approach was taken to analysing the issues, obtaining the evidence and developing a PES to mitigate any potential negative impact on ecosystems services within the catchment. As a result the Cotswold PES pilot had five objectives:

1. Collect and integrate existing data as part of a detailed evidence base; 2. To develop PES framework from a ‘buyers’ perspective; 3. To survey and evaluate ‘sellers’ and develop PES framework from ‘sellers’ perspective; 4. Assisting in discussions concerning the location of field trials to address knowledge gaps in

the evidence base; and 5. To develop and agree a PES framework for the Cotswold Catchment

Overall Approach A strong emphasis was placed on stakeholder engagement throughout the year with both buyers and sellers involved in shaping the PES framework from an early stage. The partnership started from a very developmental starting point and therefore focussed on Steps 1 and 2 of the Defra Best Practice Guide (Smith et al. 2012:29):

Step 1 - Identify a saleable ecosystem service(s) and prospective buyers and sellers. Step 2 - Establish PES scheme principles and resolve technical issues.

Previous work associated with a Defra/EA WFD Catchment pilot had identified a number of partners with interests in developing a PES-based approach to catchment improvement, and which formed an initial Steering Group for this project. During the past 12 months, other partners have been added where appropriate. The current steering group membership can be found in Appendix 1. The PES Steering Group agreed to focus the PES development on a single WFD waterbody in order to test the development of the PES framework and ensure a close relationship with the farmers and landowners which will be critical to the delivery of Objectives 3, 4 and 5, whilst retaining the need to contribute towards the WFD 2015 water quality requirements. The Steering Group identified the Ampney Brook (WFD waterbody 30300) within the Upper Thames catchment as the most suitable spatially defined area upon which to focus this PES research. As well as areas of both permanent and rotational grassland and a range of farming types there was also a clear issue with episodic methaldehyde and pesticide contamination present within the waterbody. A map of the Ampney Brook is shown in Appendix 2 but can be identified in Figure 1 as ‘30300’, just above the word Cirencester.

2. Methodology and Approach The next 5 sections outlined the progress against the 5 objectives set out in the initial research proposal. Objective 1: Collect and integrate existing data to identify key ecosystem services. This objective matched Step 1 of the Defra Guide and the main intention here was to test the Integrated Local Delivery (ILD) framework as a means of identifying the ecosystem services that would form part of the PES structure. ILD is a delivery framework developed by FWAG and CCRI (see Box 1) that enables the increased participation from partners, communities and farmers to improve the water environment (Short et al. 2010). Using the ILD scoping exercise enables the environmental assets within each catchment, and the relevant partners, to be identified and gives a forum for shared problem solving and understanding of the


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catchments' priorities. In this case the process helped identify the sellers and buyers to be considered within the PES framework. The type of approach implement here reflects the principles and process of co-management, as outlined by Carlsson and Berkes (2005), who outline co-management as process involving ‘extensive deliberation and negotiation’. A crucial stage is knowledge exchange, largely through the development of ‘co-learning communities’ or ‘communities of practice’, which build relationships and enhancing dialogue to achieve mutually acceptable outcomes. This mirrors to some extent the approaches being tested in Catchment Sensitive Farming and the catchment-based approach. The PES pilot has shown the ILD framework to be a viable and valuable process, which has strong synergies to widely recognised approaches within natural resource management. In particular the ILD process was used to create a field-by-field dataset by overlaying natural asset and strategic data within a GIS. This process identified strategic priorities and potential beneficiaries who might be willing to be involved in the PES pilot project. The landowners and farmers are involved primarily as sellers, while the local communities, private businesses, local authorities and other stakeholders are potential beneficiaries, and maybe buyers. Some intermediaries were also identified with networks that could assist the PES pilot, namely the Catchment Sensitive Farming (CSF) and Campaign for the Farmed Environment (CFE). Both of these initiatives consider the better management of public goods and have secured a good network with farmers and land owners in this area. PES is looking to extend these networks to consider new investment, especially from the private sector, but the value of existing networks in cognate areas should not be underestimated. Existing data sets from across the whole Upper Thames catchment have been integrated in order to provide the spatial evidence to support ILD. The spatial aspect is particular important for the development of the partnership as it facilities discussion at the local level on how different ecosystem services interact and can assist in Step 2. An Arc GIS project file, which has the potential to become part of an interactive web-portal, has been developed as part of the Upper Thames catchment pilot and was interrogated to identify ecosystem services. The main sources are Catchment Sensitive Farming (Natural England), Water

Box 1 – 6 Key steps of the ILD Framework

Step 1. Begin initial scoping to determine the area, its environmental assets and link to key individuals and strategic frameworks involved.

Step 2. Map and overlay the assets, link to ecosystem services concept strategies and verify these in an inclusive and open format with key local and statutory stakeholders.

Step 3. Develop a management group based around key local and statutory stakeholders to discuss and take forward to concept of ecosystem services

Step 4. Encourage linkages and opportunities for local contribution and adoption of responsibilities in terms of gathering evidence and potential for each identified ecosystem service.

Step 5. Establish capacity and role of the local group to take forward each PES option; identifying and prioritising tasks

Step 6. Implement proposals and embed management group and support for all of the PES options identified. Seeking funding and mechanism for brokering and implementing a PES scheme is critical at this point.


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Framework Directive-related data (Environment Agency), a range of data from the Local Authorities, Thames Water (water quality data) and others including information from Ecotricity, a renewable energy provider based in Stroud, Gloucestershire. A detailed map of the principal farms within the Ampney Brook were combined with detailed parish maps for parishes within the pilot area where trial farms are located (Objective 3). The resulting integrated database shows key agricultural information, environmental assets, flooding data and WFD priorities. An example is shown in Appendix 3. Defra’s Payments For Ecosystem Services: Best Practice Guide sets out a broad estimation of the ecosystem services provided by a range of habitats (see Table 1). Table 1 – Broad estimation of Ecosystem Services provided by habitat.

(Source: Smith et al., 2013) As far as the Cotswold PES is concerned, the group also considered two provisioning services (food and energy production) and one cultural service (landscape) because a wide representation of landscape considerations is made in the ‘National Character Area 107: Cotswolds’, which has recently been developed by Natural England (NE 2014). The Steering Group have considered a number of approaches to apply Table 1 into the discussion of the PES project. One approach was to use a habitat coding system consistent with current agri-environment schemes (Environmental Stewardship). This is generally accepted and understood by farmers and some buyers, for example Natural England, but not all. However it does link to and extend Table 1 in the Defra Guide and should enable a deeper understanding of the potential ecosystem services as they develop. See Appendix 4 for matrix that links with Table 1. The habitat matrix focuses on four habitat types and field boundaries of high environmental value as being the most relevant to issues within the Upper Thames Catchment. Future next steps will be to populate this generalised scheme with specific local detail so that it is more locally applicable. This might be represented as another layer within GIS. This will also


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include the incorporation of factors such as changes in regulation and schemes through CAP reform. There would need to be some further work that links these to the broad habitat types as defined in the National Ecosystem Assessment (NEA), from which the PES guidance classification, shown in Table 1, is derived. The NEA follow-on work due to be published later in 2014 might be helpful here. An important finding was that the ILD framework was found to be a robust process for identifying the process, the bundles of products and the sellers and beneficiaries/buyers. The next 2 objectives show how the ILD process provided the basis for the engagement of both buyers and sellers. The PES steering group have all agreed that the successful meeting of these 2 objectives is critical for whilst it would be possible to meet the requirements of the project without engagement, say as a purely technical exercise, it would then have the fatal weakness of no stakeholder buy-in. Objective 2: To develop a PES framework from a ‘buyers’ perspective. During the early stages of the project a number of meetings were held with the key beneficiaries, sellers and buyers identified in Objective 1. The key buyers are identified as:






Discussions are most advanced with Thames Water (TW) and Ecotricity due to specific business priorities. Thames Water is very clear that it is considering a range of options in order to reduce the projected costs of water treatment. They have stated a preference for options to result in additional benefits, however they have stressed the need for certainty that whatever is funded needs to delivers their aims. For example, certainty must be demonstrated through metaldehyde concentrations below 0.1 ug/l at their abstraction points 100% of the time. TW acknowledge that they need to accept uncertainty during a trial, but they are working to a regulatory deadline of March 2018 to solve the ‘metaldehyde issue’ and have a programme of catchment activity that reflects this with funding allocated for this period. After this time any measures they adopt will need to demonstrate value for money and have a high degree of certainty. In order for this to happen the role of a broker needs to be determined as TW is not in a position to administer this, particularly within a multi-function PES. The wider stakeholder engagement is important to them as they need to determine the appetite for PES and the potential of a representative monitoring programme to demonstrate the effectiveness of measures under the PES. Thames Water is interested in the Cotswold PES because diffuse pollution of watercourses with agricultural pesticides presents an ongoing problem for water companies. The drinking water standard for most pesticides is 0.1 µg/l, a fraction of the health based standard for most compounds, and pesticides are often present in the raw waters at water treatments works (WTW) at considerably higher concentrations. Achieving compliance with the drinking water standard requires Advanced Water Treatment (AWT) such as ozonation and filtration


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through Granular Activated Carbon (GAC), which has a large associated cost as well as not being completely effective for some compounds. Metaldehyde, the most commonly used active ingredient in slug pellets, is one such compound not effectively removed with AWT. As a result, Thames Water, and water companies nationally, have recorded a number of treated water exceedances of the 0.1 µg/l standard. These typically occur in autumn and winter because metaldehyde is applied in greatest quantities to winter oilseed rape typically from early September, and to cereals, such as winter wheat, from mid-October to early November. Several other pesticides are only partially removed by AWT processes, including propyzamide and carbetamide, two herbicides widely used to protect oilseed rape from broad leaf weeds, particularly blackgrass. High concentrations of these at water company river water abstraction points could result in failures of the drinking water standard. Both are typically applied to oilseed rape from mid-October depending on the temperature and moisture content of soils, and the growth stage of the crop. Recent implementation of the EU Water Framework Directive (WFD) has resulted in a move away from additional treatment at WTW to achieve compliance with drinking water standards. Instead, water companies are being encouraged to establish and support catchment management initiatives with local stakeholders in catchments with water quality problems to try to reduce the problem at source. Thames Water’s position is that the PES pilot is investigating whether such a scheme could be effective at reducing water quality problems in the Ampney Brook catchment, and potentially the Upper Thames catchment, by incentivising landowners to make changes to land use in targeted areas particularly with respect to the application of the above chemicals. This has to be considered against other ‘end of pipe’ solutions, such as improved or new treatments works. However the cost of treating water for metaldehyde, and other chemicals, is extremely expensive and considered to be prohibitive and unsustainable. Ecotricity are keen to work with Thames Water and others in establishing a long-term approach to land management that enables the sustainable generation of renewable energy through AD that does not have detrimental impacts on the other ecosystem services in the catchment. There is concern in some quarters that AD energy generation is dependent on growing maize or in some cases Oil Seed Rape (OSR). Both, in the wrong place, can have a negative impact on other ecosystem services and secure little, if any, other environmental benefits beyond renewable energy. For example there can be serious implications for water quality, in terms of sediment load, and water quality, through leaching of chemicals into water courses, under conventional growing conditions. In particular, maize fields are prone to soil erosion in certain locations and OSR production can require treatments for slugs, such as metaldehyde. Thames Water, a key partner in the Upper Thames PES project, are currently testing for a number of pesticides, including metaldehyde, and would be able to confirm any improvement on water quality. It is the wider impact of these conventional approaches, and the lack of a regulatory framework to consider the impact of conventional AD on the wider environment, which underpins the desire of the Upper Thames partners for an integrated approach connecting use of crops for AD biomass and the provision of ecosystem services. This integrated dual use of the land for both food and fuel is an important consideration. Ecotricity’s aim is to employ a ‘Dry and Wet Phase’ Anaerobic Digestion (AD) process to produce biogas by harnessing the natural decomposition of organic matter in the absence of oxygen. The biogas is used as a renewable energy source to produce Biomethane for Gas Grid Injection (Biomethane to Grid (BtG)), electricity, heat and, digestate as an end-product that can be supplied back to participating farms as organic compost and liquid fertiliser. The aim of Ecotricity’s involvement is to promote the use of grassland options within rotations


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and permanent pasture that prioritise agronomic and soil management practices to optimise soil carbon storage and optimise carbon use (flows) as well as crop productivity. Through their involvement it is possible to offer commercial incentives for farmers to improve soil carbon services and thus create a symbiotic relationship between the farmer and energy producer. The DECC consultation on the sustainability of biomass production in June 2014 is considering 60% carbon neutrality. The result of the process being considered by the PES project is an AD biomass process with both high greenhouse gas saving and high carbon neutrality (possibly as much as 80% when compared to the EU fossil heat use average) as well as a range of other environmental and ecosystem service benefits. If the benefits of such a grassland system can be proven, there would be considerable attraction to Ecotricity to invest in biomass production for AD. It would present a win-win situation where Ecotricity had the confidence to offer direct payment in biomass production and this would offer an incentive to land managers to invest in grassland either within a rotation or as a different grassland approach more generally. This would also confirm that the generation of renewable energy has a positive impact on the wider environment, something that Ecotricity feel is fundamental to the image of renewable energy. In the view of a number of commentators renewable energy subsidies should also create an opportunity for other ecosystem services to be built up which can be linked to the longevity of the renewable subsidy contract. The standard which is currently being considered within the PES project would have the joint merits of ecosystem services sustainability and organic status at heart, as well as to provide environmental regulation to the energy crop AD industry. This approach would deliver measurable carbon neutrality to the sustainability reporting standards anticipated through DECC and regulated by Ofgem for biogas production by energy crop AD, as well as contributing to the enhancement of measurable ecosystem services. The energy produced and consumed has a fully calculated carbon footprint which significantly offsets fossil carbon consumption and emissions. This calculated carbon footprint also is a guide to the proportional carbon sink achieved in the associated land use practice. The ethos of Ecotricity is to add value from the production of renewable energy by associated solutions and improvements to the environment and food production. The role of Natural England and the Environment Agency in a PES framework will depend on other factors such as the priorities associated with the AES and WFD implementation respectively. Meetings with local communities are also ongoing, and will include discussions around ditch management and, in particular, identification and prioritisation of actions linked to parish planning and future development mitigations. The key output from this objective is a list of prioritised land management options that meet the needs of the buyers and can be considered by the sellers. These are presented in more detail under Objective 4.


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Objective 3: To survey and evaluate ‘sellers’ and develop the PES framework from a ‘sellers’’ perspective:

An introductory project meeting in July helped bring the PES pilot to the attention of the 17 main farmers and landowners within the Ampney Brook catchment. A flyer inviting them to the breakfast event in a local pub was sent out using FWAG and CSF contacts. The resulting notes are contained in Appendix 5. The aim of the event was to encourage farmers to become directly involved in the development of a local PES scheme and meet and hear from some of the prospective buyers and beneficiaries. The meeting discussed food production, environmental management, landscape conservation, water quality, water flow and energy production in an open and discursive format. Farmers in the Ampney Brook catchment were interviewed in order to seek further details about: the approach taken in their farm businesses; experience of AES; and changes in cropping and response to policy changes in past and likely changes in the future. Overall the changes identified were ones of continued change. It is anticipated that as much as 3,000 hectares, about a quarter of the catchment, will change hands (either directly or in management terms) during the next year to 18 months. As a result of the initial meeting and other discussions 12 farmers agreed to become involved in the project. Based on the surveys returned and other conversations a review of the farming systems in the catchment was undertaken. To summarise the results of this study, there is a continued move towards the simplification of arable rotations with fewer arable enterprises and less grass and spring crops within these rotations. The trend of earlier establishment continues, notably of oilseed rape, and the main crops remain winter wheat and winter barley. There is a shift towards reduced cultivation with most not ploughing each season and some using minimum tillage for most of their cultivations. Ploughing, once seen as a starting point for autumn cultivations, seems to be seen increasingly as a management tool like sub-soiling for resolving issues of soil compaction or burying problem weeds. However several farmers noted increased weed pressures, for example blackgrass. The Ampney Brook remains a mixed catchment with equal numbers of cattle and sheep on livestock farms but the number of livestock farms and livestock numbers generally are decreasing. Farmers are far more aware of the nutrient levels in their soils than they are about organic matter or soil structure. Nearly all of the farmers are aware of and have some involvement with AES. However, there were two distinct strands; either choosing options with minimal impact or more demanding options that complement the farming system. Most of the farmers also receive advice and are used to innovating in order to resolve challenges on their farm. A key outcome of the initial discussion, which has been investigated further during the year, concerns the role of soils in regulating the quality of water, water flow and other ecosystem services. Soil organic matter (SOM) has a positive effect on soil structural, biological and chemical processes with respect to water holding capacity and binding of chemicals and thus contributes to the improvement of water quality. SOM also supports organisms that are an important food source for farmland birds, and assists the growth of crops and grass. However, measuring soil organic matter is problematic and it is difficult to distinguish between ‘created’ and ‘added’ organic matter. Linked to this is the role of grassland in restoring soil structure as well as organic matter and resolving issues like compaction has been highlighted through the discussions as something to investigate further. However, it is unlikely that any of the former ESA arable reversion land would be directly transferable into this category due to the lack of species diversity in the grassland and the land management that often resulted. One area that has been investigated is the role of Environmental Stewardship options EK21 (and the organic and higher level scheme versions) which offers a legume-based mixture of


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grasses. The rationale is that swards sown with a much wider range of grasses, legumes and robust herbs than would normally be sown in commercial practice can be established on land of moderate or high fertility to support commercially attractive levels of livestock production without N fertiliser, whilst also delivering a greatly increased abundance and diversity of pollinators and other invertebrates, and improvements to soil structure. It is understood that around 90 holdings across England, some within the Ampney Brook catchment, have adopted this seed mixture and its impact is due to be evaluated during 2014 by Natural England. This will include the impact that this option has on soil condition and in protecting the quality of water, both of which would lead to improved water quality and reduced pressure from flooding. However soil is a ‘slow’ variable and thus the benefits may not be immediate, which is a challenge as far as a PES scheme where payments are linked to the certainty of benefits. The focus on engagement has been a key strength of this project and the overall impact is that by following the ILD framework both sellers and buyers feel part of the partnership, there is much good will and trust and therefore a strong basis for further development. This is important when proceeding through the next steps in developing the PES scheme. Objective 4: Assisting in discussions concerning the location of field trials to address

knowledge gaps in the evidence base: Following the meetings with buyers and sellers and a key outcome from the July meeting and subsequent discussions on methodology, a twin track approach has been decided.

c) Tests to be performed by farmers on their own farms. The focus was nitrogen, phosphate and ammonia in water as it entered and left their holdings.

d) Analysis of metaldehyde, propyzamide and carbetamide water levels. Access was given to a number of farms, allowing Thames Water to collect samples from watercourses upstream and downstream of their farms. These holdings offer a mix of farming approaches. Links to a) above were made regarding autumn and winter applications of the above pesticides to oilseed rape (OSR) and winter wheat.

A summary of both approaches can be found in Appendix 6. Following this individual discussions were held with a number of sellers and buyers in the final 2 months of the project and a list of prioritised options was agreed. These will be taken forward into the next phase of the PES project (Table 3). Some of the potential land management options are operational rather than capital investments, which when making PES arrangements are known to be more problematic from buyer perspective. The main reason for this is that they lack the certainty of some capital investments where the outcomes might be known. The lack of certainty within the science evidence base was noted and the testing will continue and hopefully be expanded. The key criteria that were used to assess these options were:

The viability for Sellers in terms of their farming system The level of certainty that the outputs associated with agreed options provide the

Buyers The most suitable duration for the PES agreements is thought to be about 20-25

years by both buyers and sellers An input-based approach, whereby sellers receive payment for agreed changes in

land management, was suggested. Some funds could be retained and linked to progress towards agreed outcomes.

The scale was agreed as the Upper Thames, thus requiring a roll out of the approach developed in the Ampney Brook in the near future


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The focus on approved soil management under grassland links to the role of porosity and soil structure in meeting multiple ecosystem services and the willingness of the buyers to support further investigation to test against the levels of uncertainty of this option. Also acknowledged was the key role that well managed deep rooted grasslands, both within an arable rotation and as permanent pasture in providing a range of ecosystem services, some of which would meet the need of the buyers and beneficiaries within the current partnership. Further investigation will look at the long term benefits of grassland both within a rotation and as permanent pasture.

Table 3 – List of Prioritised Options arising from PES discussions Prioritised Options Outline description Justification Buyers

benefits Introduce approved soil management practice to increase soil functionality

Enhance soil structure and porosity Compaction to support various ecosystem services

High uncertainty but feasible, would need to test. Possible multiple benefits.

Reduced need for water treatment, flooding pressure

Introduce a grassland code

Aiming for multiple benefits (carbon sequestration, increased water filtration and flow regulation) covering rotational leys and permanent pasture.

Confident, buyers could support advice and guidance. Option could pay for itself if linked to energy production or increased resilience within grazing regimes.

Reduced need for water treatment, flooding pressure. Landscape

Add energy production component to arable rotation

Grass-based element to rotation and use of digestate and compost within rotation, no need for livestock infrastructure. Payment to farmer for grass element

High confidence for buyers, but concern re management in rest of rotation needs to be met. Option could pay for itself.

Sustainable land management to recognised standard.

Influencing application management

Preventing use of certain applications (e.g. metaldehyde) or economic payment for substitution with alternative. Also considering receiving details pre and/or post applications

Great clarity for buyers (e.g. ferric phosphate) but funding and effectiveness of substitutes uncertain High uncertainty but feasible, need to test.

Reduced need for water treatment

Specific management interventions

Impact of siltration traps (SUDS), swales, winter sacrifice crops to retain soil, reduce erosion risk and water contamination

High uncertainty to buyer but feasible, need to test. Likely to be low payment.

Reduced need for water treatment, flooding pressure

The development of a grassland code, similar to the Woodland Carbon code and the Peatland Carbon Code, was suggested. It was recognised that as a starting point the


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grassland code would need to be set against national standards; requirements for reliably estimating the carbon sequestered; offer registered and independently verified code; meet transparent criteria and standards. There is a need to make the case for such a code in terms of the scientific evidence as it is not as clear cut when compared to woodland or peatland. It is envisaged that the Grassland Code would be based around productive multi-species grassland for purposeful soil health restoration. The soil health restoration would be maximized through the selection of species for longevity, root system productivity, drought resistance, fertility contribution and deep soil trace element accumulation, especially when combined with high cutting heights. This type of grassland would also contribute to pollinator support and runoff impedance throughout the year. There are several areas that require more detailed investigation. Not least the clarification of a direct link between soil management under grassland and the multiple ecosystem service benefits. It is this clarification that underpins the need for a sustainable Grassland Code. The focus on soil health restoration would form the basis for the Grassland Code where the standards and requirements would be focused on restoring soil functionality in order to assist other ecosystem services such as water purification and flood alleviation as well as supporting pollination and landscape character. The requirements of the Grassland Code would be through the selection of grassland and herb species that enhance longevity of the pasture, increase root system productivity, drought resistance, fertility contribution and deep soil trace element accumulation. The desired output of the grassland would be further enhanced when this is combined with high cutting heights or mob grazing techniques. Any proposed project would require a long-term management plan (20-25 years) and be able to demonstrate additional carbon benefits that can be verified for the duration of project. As explored in Objective 2, the option of investigating energy production is linked to involvement of Ecotricity who wish to develop the potential for renewable energy production using an AD biomass system that utilises a high proportion of grass. This would be taken from surrounding holdings for payment and in return these farms would also receive digestate and compost for soil improvement. Many of the farmers favoured grass but did not have the infrastructure for livestock and this option would provide a number of benefits such as improved soil structure, reduced run off and diffuse pollution. This option would enable the management of the amount and quality of organic matter inputs and reducing the intensity of cultivations. In particular 5 areas will be considered in the next phase:

planting catch (cover) crops and grass to improve soil composition and structure adjusting crop rotations, (include grass for 2-3 years) residue management, reduced tillage operations, fertilizer and manure management

This links to some recent research under the SMARTSoils project (Ingram 2014 and Ingram et al 2014) that highlights the need to:

identify agronomic and soil management practices that optimise soil carbon storage; increase carbon stocks and optimise carbon use (flows) and crop productivity; offer incentives for farmers to improve soil carbon services; and gather evidence on the efficacy of different management practices to enhance soil

carbon. Influencing application management was a clear outcome of the sampling process and farmers were undertaking this as part of the farmer testing on farm process. The other options considered are shown in Table 4 below.


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Table 4 – List of Other Options considered in PES discussions Other Options Outline description Justification Specific management interventions

Targeted location of margins/buffer strips/ beetle banks – can these act as natural retention and detention basins?


Influencing location of some crops (e.g. OSR/maize)

Proximity and risk to watercourses, closer means more they are more margins and other interventions


Determine level of risk, slopes or soils deemed to be at risk


Unlikely Options Outline description Justification Influence selection of crop (e.g. OSR, maize)

Taking crop out of system or limited area of type (winter or spring) of crop


Influencing crop rotation

Negotiating rotation to suit particular needs Of different buyers


Specifying management within a rotation – minimum tillage. Possible link to payment for increased carbon sequestration.


The prioritised options will be the core of the next stage of the PES pilot where payments will be determined and this will be a key task for the administrative framework that is considered in Objective 5.

Objective 5: To develop and agree a PES framework for the Upper Thames Catchment.

The focus of the Cotswold PES remains on products, practice and people: Products – building resilience in businesses and the environment to absorb shocks,

as well as within communities and organisations. Practice – that activity of buyers and sellers within the catchment is accountable to

the ecological system within the catchment. People – adjusting both farming and living to suit changing circumstances.

The first aspect that the PES Steering Group considered was how any PES scheme would be administered. The ILD framework used in previous objective was able to identify key ES assets (Objective 1) and the principal buyers and sellers (Objectives 2 and 3). The final step of the ILD framework process is the identification of capacity and role that a local management group, accountable to both local and national interests, might play in implementation. This was the starting point for discussion on PES administration. The role of the intermediary was immediately made clear by both buyers and sellers. Neither wanted a direct relationship and with a number of buyers this was be difficult anyway. Given the relationship with a number of key knowledge providers, CCRI, UWE and the Royal Agricultural University whose farm is within the Ampney Brook catchment, their contribution is acknowledged. The key PES principles are summarised in Table 5 below.


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Table 5 Agreed PES scheme principles Ecosystem services Water quality (notably drinking water), Energy

production, Landscape, Tourism, Flood alleviation, Access, Biodiversity and WFD.

Buyers Thames Water, Ecotricity, Cotswold AONB, Local communities, Natural England and Environment Agency

Sellers Farmers and landowners (including woodlands) Intermediaries FWAG and Catchment Sensitive farming Key Knowledge providers University research centres (CCRI, UWE, RAU) Geographical Scale Upper Thames catchment Contractual period 20-25 years Agreed interventions Introduce approved soil management practice;

Introduce a grassland code; Add energy production component to arable rotation; Influencing application management

Measures to minimize trade-offs Agreed indicators and monitoring framework Packaging of ecosystem services Preference for Layering, possibly bundling. Type of payment approach Input based payments, differentiated according to

layering. Proportion retained for outcome issues. On the issue of payments the sellers understand that PES is different from AES and any payment would not be based on income foregone. Whilst the actual payments will be determined in subsequent discussions, the intention is to determine payments by risk and certainty levels – perhaps through a series of bidding sessions based on the experiences and evidence from this Round 2 pilot. Consideration would also be given to other options such as commodity tracking and determining compensation based on a multi-benefit analysis will be used to modify payments over time if doing so reduces risk. One example of this would be through a proportion being used for payment for services under particular PES options. The suggestion that a smaller proportion would be put into a ‘risk fund’, which might pay out to either party if certain conditions were breached, was considered and would be explored further. This output based aspect can act as an incentive if there was a guaranteed payment after so an agreed number of years for good behaviour, or increased certainty for a particular buyer.

3. Next steps The intention is to create a PES that provides paid incentives for land use change or land management practice change that buyers are confident will provide the benefits that they were seeking to secure. Clearly a challenge is that there is not a single land use approach within the catchment. The work under Objective 3 revealed that land uses and their management varies widely. One particular challenge is the consideration of securing the continued contribution of existing land use practices that currently provide similar ecosystem functions. However, unless additional obligations are required or the area is under threat the issue of additionality needs to be determined so that any money received is shown to be providing good value for money. To achieve this, the framework will have to be developed to enable key areas to be prioritised otherwise it will be not be attractive to either sellers or buyers. Finding a path that is acceptable to both aspects will be a key area for the next phase of the PES research.


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The shape of the administrative structure that would deliver and sustain the PES in the longer term was considered by the PES steering Group. This would include the setting up of a robust process for negotiating agreements and developing opportunities for buyers and beneficiaries. The key outcome from these discussions was for a known and trusted arrangement that could be seen locally and trusted nationally. The favoured option that has been explored to some extent is to use the Gloucestershire Local Nature Partnership (GlosLNP) as the core base for the administration of the PES. The key reasons for looking at the GlosLNP is the strong partnership that has been developed and the representation that the sellers, beneficiaries and potential buyers all have in this new configuration. Looking into the future and the wider application of PES in this area the fact that GlosLNP also has strong links to the Gloucestershire Local Enterprise Partnership (GlosLEP) might be useful in identifying potential links to future buyers and beneficiaries. A separate ‘trust’ or ‘broker’ was considered but rejected as it would be unknown and would therefore struggle to be transparent and accountable. However, it is noted that the catchment covers three administrative areas and so an arrangement would have to be made for securing cross-border support. Further work will determine an application process and monitoring and evaluation with agreed indicators in order to measure success. This would include the development of a Grassland Code, which would be set up for national consideration and scrutiny as well as determining the links to sustainable energy production through a grass-based AD biomass system. The partnership agrees that there are many buyers and beneficiaries within the PES dealing with one type of multiple sellers. The Defra PES guide describes this as a ‘many to many’ PES. The partnership have also ruled out a single PES with other benefits free riding on the back of this and currently prefer to think in terms of a ‘layered’ PES with payments attributed to a number of individual elements. These would not be event spread over the area. Some, like those relating to Thames Water’s need for clean drinking water, would be available across the Upper Thames catchment while other such as reducing flooding for a particular community would be more localised. Exactly how this works across the catchment is a key area of work for the implementation phase of the PES research.


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References

Carlsson L and Berkes F (2005) Co-management: concepts and methodological implications, Journal of Environmental Management 75 65-76.

Ingram J. (2014 in press). Agricultural adaptation to climate change: new approaches to knowledge and learning. In Fuhrer J. & Gregory P.J. (eds) Climate change Impact and Adaptation in Agricultural Systems. CABI, Wallingford, UK.

Ingram et al (2014 in press) Managing Soil Organic Carbon: a Farm Perspective, Eurochoices 2014.

Natural England (2014) National Character Area 107: Cotswolds, NE420. http://publications.naturalengland.org.uk/publication/5900626?category=587130

Mills, J., Gibbon, D., Ingram, J., Reed, M., Short, C. and Dwyer, J. (2011) Organising collective action for effective environmental management and social learning in wales. The Journal of Agricultural Education and Extension, 17(1) pp. 69 – 83.

Short, C. and Dwyer, J. (2012) Reconciling pastoral agriculture and nature conservation: developing a co-management approach in the English uplands. Pastoralism: Research, Policy and Practice 2012, 2:13.

Short, C., Griffiths, R. and Phelps, J. (2010) Inspiring and Enabling Local Communities: an integrated delivery model for Localism and the Environment. Report to Farming and Wildlife Advisory Group and Natural England. CCRI: Cheltenham.

Smith, S., Rowcroft, P., Everard, M., Couldrick, L., Reed, M., Rogers, H., Quick, T., Eves, C. and White, C. (2013). Payments for Ecosystem Services: A Best Practice Guide. Department for Environment, Food and Rural Affairs, London. (https://www.gov.uk/government/publications/payments-for-ecosystem-services-pes-best-practice-guide, accessed 10th September 2013.)

Sutherland, L., Mills, J., Ingram, J., Burton, R.J.F., Dwyer, J. and Blackstock, K. (2013) Considering the source: Commercialisation and trust in agri-environmental information and advisory services in England. Journal of Environmental Management 118 (2013) 96-105.


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Appendix 1: Cotswold Payments for Ecosystem Service Steering Group Members Jenny Phelps - Farming and Integrated Environmental Local Delivery (FIELD) Adviser, Gloucestershire FWAG Chris Short – Senior Research Fellow, Countryside and Community Research Institute, University of Gloucestershire Daryl Henehan – Water Quality Scientist, Thames Water Sarah Cowie/Heather Aitken – Water Quality Scientist, Thames Water Stephanie Nellis/Sarah Howells, Catchment Sensitive Farming, Natural England Paul Cottington, Environmental Adviser SW, National Farmers Union John Turvill – Ecotricity Chad Staddon/Lorraine De Souza - University of West of England Sarah Wells – Gloucestershire FWAG Mark Everard – Environment Agency/Rivers Trusts Charles Horton – Farmer/ Landowner John Newman – Farm Manager Abbey Home Farm Demonstration Farm: Royal Agricultural University (RAU) Louise Manning/Tom Overbury – Teaching Staff at RAU involved in Harnhill Tony Norris – RAU Harnhill farm manager Interested associated organisations with the PES: Soil Association – Community Supported Agriculture LEAF Permaculture Association Farm Woodland Forum CLA NFU Reporting to: All partners in the Upper Thames Catchment Steering group Ecosystems Strategy & Evidence Team in Defra, Helen Dunn, Colin Smith and Christopher Thompson.


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Appendix 2: Detailed map of Ampney Brook (WFD waterbody 30300)


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Appendix 3: Detailed maps of parishes showing a range of key data showing (1 – key agricultural information), (2 – environmental assets), (3 – flooding data) and (4 – WFD priorities)


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Appendix 4 – Adaption of the Habitat matrix.


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Appendix 5 – Notes from Sellers introductory event, July 2013.

Notes of Breakfast Meeting discussing the Development of a Cotswold Catchment Payments for Ecosystem Services (PES) and Links to

presentations.

1. Welcome from the PES Steering Group (Chris Short, CCRI University of Gloucestershire; Jenny Phelps, Gloucestershire FWAG; Daryl Henehan and Sarah Cowie, Thames Water; Stephanie Nellis, Natural England Catchment Sensitive Farming; John Turvill, CZERO; Chad Staddon and Lorraine De Souza, University of West of England and Daryl Buck, Environment Agency); Paul Cottington (NFU, apologies given) 2. Introduction to Payments for Ecosystem Services – Chris Short, CCRI University of Gloucestershire. The Cotswold PES Pilot is a Defra funded project that runs from April ‘13 to Mar 14. The aim of the 1 year’s funding to develop a Framework for considering PES. The pilot is taking a partnership approach that will consider a number of issues, some of which are outlined today, rather than one single issue in isolation. To do this we require a dialogue between the ‘Sellers’ (farmers) and the ‘Buyers’ or ‘Beneficiaries’, which represent the range of interests and issues to be considered within the PES. This has been characterised as being in three inter‐related areas: ‘Products’, ‘Practice’ and ‘People’. The aims of the Pilot, which is focused on the Ampney Brook catchment, are to:

Develop agreed framework for PES that works for buyers and sellers

Indentify new and additional investment to feed into the framework. Innovation for farm businesses, who are the ‘buyers’:

3. ‘Products’, Innovative enterprises – John Turvill, CZERO CZERO has developed an anaerobic digestion feedstock policy which creates an ecosystem service by removing the need for added chemical farming. The predominant feedstock being grass silage creates the opportunity for long term grass breaks in arable rotation and the preservation of existing, and creation of new, bio‐diverse meadows. The impact will be increased levels of created soil organic matter and sub sequential reduction in plant nutrient leaching, increased moisture retention and more productive soil fauna, which maintain the incentive to adjust farming practice. Digestate processing and management is being addressed with the aim of creating a precise and timely use of the plant nutrient content completing the nutrient cycle and delivering full resource recovery and reuse. The added public value of payment for ecosystem services in conjunction with renewable energy production should influence both DEFRA and DECC policy and support responsible farming. Action: those interested should contact John Turvill directly at [email protected]. 4. ‘Practice’ – Managing farmland resources for profit – Steph Nellis CSF/S4P Catchment Sensitive Farming (CSF) has been operating in this area since last year. It is a designated CSF area because of failing groundwater due to nitrates and pesticides. The CSF approach can be compared to Payment for Ecosystem Services (PES), it is a way of encouraging a change of farm practice through incentives (e.g. free services and capital grant scheme money). The changes in farm practice aim to reduce diffuse water pollution but also provide cost benefits to farmers. Examples include free visits to assist with nutrient management planning, free advice on cover crops and funding to roof over livestock handling areas. These are proven cost effective measures that reduce diffuse pollution. Other initiatives such as Soils For Profit (S4P) and Agri‐Environment schemes can also be compared to the PES approach due to the offer of financial reward for a change in farm practice. The future of CSF, S4P and Agri‐Environment schemes is unknown at the moment


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and the schemes in this form will be shortly coming to an end. It is therefore a crucial time to take part in pilots such as this one to play a role in influencing future schemes and initiatives. Action: those interested in receiving free visits or access funding should contact Steph Nellis directly at [email protected] or 0300 0603932. 5. ‘Practice – Waste not want not – finding best practice use of inputs – Daryl Henehan, Thames Water Thames Water is working on a catchment management initiative to reduce metaldehyde concentrations in surface water and ensure concentrations remain below 0.1 µg/l in drinking water supplied to customers. The 0.1 µg/l drinking water standard is not a health based standard, but is a legal requirement set by the European Drinking Water Directive. Metaldehyde is however very difficult to remove from water using current water treatment processes. Thames Water monitors metaldehyde concentrations in 55 subcatchments in the River Thames catchment. Concentrations recorded in the Ampney Brook last winter were the highest recorded (7.8 µg/l, 5 October 2012), although very high concentrations were also recorded in the majority of these 55 subcatchments. Thames Water see the PES project as an opportunity to reduce these concentrations by investigating the effect of different land use practices on slug populations and therefore metaldehyde concentrations. This work will inform the development of a PES framework which aims to incentivise farmers to use land use practices which are beneficial to their farm, to the environment and reduce metaldehyde concentrations in water. As such, we would like to monitor metaldehyde concentrations downstream of a number of farms involved in the project to determine the effect of different land use practices. The information would be shared with the farmer concerned and the collective data will help inform the PES framework. Action: those interested in working with Thames Water on this and related issues should contact Daryl Henehan ([email protected]) and Sarah Cowie ([email protected]) 6. ‘People’ – Who will pay for land management and land use change to help farmers and communities prepare for climate change? – Jenny Phelps, Glos FWAG Is there a cultural disconnect between farmers/ land owners and communities? Do communities feel connected to the farmed environment or know the true value of food, water, air and ecosystems? There is potential for communities to develop local projects alongside farmers that are for mutual benefit. Using the Integrated Local delivery approach to identify local assets and linking these to strategic funding sources will help develop these initiatives. Local issues such as regular flooding at certain times of the year or meeting needs identified in parish plan might be resolved in this way. This might also include buying local products or developing a Community Supported Agriculture initiative to pay for such ecosystem services. The free services that the natural environment provides in the form of natural habitats, soil nutrients; the hosting of natural predators such as hedgehogs, blackbirds, thrush in hedges and ditches to reduce slug burdens; ladybirds and beetles for aphid control and the vital role of pollination: these services are free. Investing in these systems and the features that support them might be cost benefit to local communities, farm businesses and other companies like Thames Water.

Action: those interested in linking with their local community should contact Jenny Phelps directly at [email protected]. 7. Innovation for farm businesses, discussion: Overall there was a high level of interest in the Cotswold PES pilot from the invited farmers, both those attending and those who could not make the workshop. There was some initial concern about the lack of detail compared to say agri‐environment schemes (AES). Under AES both the payment rate and the option is clear, however under this approach neither the option nor the rate have been


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decided. However, the benefit of both buyers and sellers starting the discussions together was seen as a key benefit of this approach. There was a recognition that we need to link the best past practices, all current knowledge and understanding, building on a baseline of compliance and existing schemes, as well as future strategies and thinking. This would enable us to develop the approaches that combine food production alongside environmental enhancement and this is at the core of PES development. The approach taken by the PES thus far is one that would enable local differentiation but within a common framework. This was welcomed although the need for a simple scheme in terms of understanding and administration was identified. However, there is scope for it to be broader than AES and more targeted. One area that was discussed in some detail was the importance of organic matter in soil. Research seems to indicate that there is a clear benefit in terms of organic matter, crop productivity and biodiversity from mixed farming. Increased organic matter also holds water for longer in both dry and wet periods benefiting both crops and the regulation of water flow. However, the type of organic matter was important as it should be created from within the soil through the natural breakdown of roots and other materials rather than ‘added’ through FYM or ploughed in crop residue. All agreed that this could be an issue to consider within the PES alongside other issues. Linked to this there should be a consideration of the type and level of impact, is it immediate and short‐term or does it have a lasting impact. The scale of the impact is also important, if it can be replicated it might impact a wider area or it might be more targeted. In order to incentivise farmers it will need to be financially viable, once determined the desired outcomes will follow. A key questions is therefore ‘who will pay to incentivise farmers to deliver Ecosystem services’ and what products, practice and benefits to people enable that to happen. 8. Agreed next Steps 1. All farmers were encouraged to look at their farm businesses to see if any ‘services’ can be located that they can ‘sell’ and then discuss them with Jenny or Steph. At this stage all ideas are very welcome. 2. For those farmers who would be interested in working with Thames Water and offering access to their farms for water sampling please contact Daryl or Sarah ([email protected] and [email protected]) by July 24th so we can sort out the sampling strategy. The emphasis will be on looking at contrasting farming practices and sharing the data. 3. For those farmers willing to discuss further the business model around energy generation, please contact John Turvill [email protected]). 4. The steering group would like 2 farmer representatives so there is an invitation here to be involved in some of the on‐going discussions. The meetings are no more than monthly and would be local, either in the catchment or in Gloucester. If you are interest please email Chris Short ([email protected]) or Jenny Phelps [email protected]. 5. The next open meeting will be in Dec 2013 when we will be sharing some of the data and looking to develop the shape of the PES framework. All of the farmers within the Ampney Brook catchment will be invited to this meeting. The meeting closed at 11:00, thank you to all who attended for their input into what was a very useful and productive morning.

With thanks from the PES Pilot Steering Group. 17/07/2013


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Appendix 6 – Details of Cotswold PES water monitoring of water in Ampney Brook (30300)

Following the meetings with buyers and sellers and a key outcome from the July meeting and subsequent discussions on methodology, a twin track approach has been decided.

e) Tests to be performed by farmers on their own farms. The focus was nitrogen, phosphate and ammonia in water as it entered and left their holdings.

It was up to the farmer to share these results but, based on feedback from farmers on the Steering Group, it is anticipated that they are comfortable doing so in the future. This builds on a research idea developed by Paul Cottington of the NFU. Accompanying protocols relating to field applications identifying the field, rate, application and rainfall were developed and linked to a map for annotating. The field notes might also include the evidence underpinning the decision to apply fertiliser. The time taken to provide this information was also recorded, as the time taken to complete these details in addition to cross-compliance duties as it might provide a basis for PES payments. This approach would need careful evaluation in the next stage of the PES pilot in order to determine that both sellers and buyers, especially Thames Water, are confident it would work and is feasible under existing mechanisms. The above data been part of a process of increasing engagement with the farmers and no attempt has yet been made to bring this data together. However, farmers were encouraged to look at the information and to compare it with their own knowledge of applications and with the information collected in b).

f) Analysis of metaldehyde, propyzamide and carbetamide water levels. Access was given to a number of farms, allowing Thames Water to collect samples from watercourses upstream and downstream of their farms. These holdings offer a mix of farming approaches. Links to a) above were made regarding autumn and winter applications of the above pesticides to oilseed rape (OSR) and winter wheat.

Tests were performed at points both upstream and downstream of farms, and a mechanism for doing this that will provide useful data both for the farmer and the partners is in discussion. Clearly, confidentiality of data will be an important consideration to avoid risks of self-incrimination, or the perception that this might be the case. Again, the emphasis of the ILD on direct open engagement has proved a crucial determinant of continuing land manager engagement with a technical analytical process that might otherwise have appeared intrusive and troublesome. The data gathering represents a significant aspect of progress within the PES pilot and arose from discussions within the PES steering group. Thames Water and the University of the West of England (UWE) established a water quality monitoring programme in collaboration with local farmers to build baseline knowledge on the location of hotspots for problem pesticides in the catchment. Thames Water has monitored the Ampney Brook at Sheepen Bridge (PUTR.0002) for metaldehyde since September 2010, so monitoring continued at this point. Twelve additional monitoring points were then considered for monitoring, with two others on the Ampney Brook and ten to cover all tributaries (Figure 1). The four sample points north of Ampney Crucis and Ampney St Mary were discarded on further investigation because they do not have reliable flow and the midstream point on the Ampney Brook (PUTR.9999), was considered unsafe to sample. The resulting eight sampling points have been monitored weekly from 11 September 2013. It is acknowledged that pesticide peaks may be missed while sampling at this frequency, however resources were not available to monitor more regularly. This is also the standard


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sampling frequency for Thames Water’s other 60 metaldehyde monitoring points in the River Thames catchment and has provided a useful baseline that adequately permits categorisation of high risk areas.

Figure 2: Pesticide sampling points in the Ampney Brook monitored by UWE and Thames Water. Points that were sampled are denoted by red stars and those that were investigated for sampling, but were not used, have blue stars. A number of projects have developed tools to calculate the risk of diffuse pollution from fields, for example Defra’s Drainflow Risk Communication and Management Planning Tool (http://www.drainflowtools.org.uk/Home.aspx) and those developed by TOPPS (Train the Operator to Promote best Practices and Sustainability), a demonstration project initiated by the European Crop Protection Association and its partners (http://www.topps-life.org/toppslife/?q=node/52). However, we are aware that UK Water Industry Research (UKWIR) has recently commissioned a project to categorise fields in terms of their risk for pesticide runoff which will be directly relevant to metaldehyde, carbetamide and propyzamide. This project is due to report initial findings in March 2015 and will incorporate learning from the Metaldehyde Stewardship Group hotspot project being piloted in four


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catchments in England. The outputs of these projects will be used to develop a risk map in the Ampney Brook to ensure consistency of approach and validation of results. Table 2: Sample point codes, associated sample point names and date when water first flowed at sample point Sample point code Sample point name Date when first flowing

PUTR.9990 Calmsden Spring Spring source, continuous flow

PUTR.0329 Ampney Brook below A417, Ampney Crucis

Continuous flow

PUTR.9994 Poulton Stream at Ampney St Mary 08/11/2013

PUTR.9995 Poulton Stream at Poulton Standing water until 08/11/2013

PUTR.9996 Winterwell at Driffield Standing water until 14/10/2013

PUTR.9997 Poulton Stream at Farm 10 25/10/2013

PUTR.9998 Poulton Stream at Down Ampney Standing water until 08/11/2013

PUTR.0002 Ampney Brook at Sheepen Bridge Continuous flow

The PES Steering Group is cautious about drawing any meaningful conclusions from just one season of data. It is known that soil moisture deficit remained high and water was not flowing in most of the tributaries to the Ampney Brook for one and a half months after metaldehyde application. It is also known anecdotally that slug pressure was not high this season, reducing the need to apply maximum levels of metaldehyde, although no application data is available to quantify this assertion. However, it is assumed that a combination of these factors resulted in lower metaldehyde concentrations in the catchment during the 2013/14 season.

Figure 3 Metaldehyde concentrations at the eight sample points in the Ampney Brook catchment from September 2013 to March 2014. The increases in metaldehyde concentrations in January and February 2014 are the result of an increase in the limit of


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detection in the analytical method to 0.05 and 0.06 µg/l and not increases in metaldehyde concentrations in the catchment. In order for there to be certainty within the Ampney Brook, any PES framework needs to be based on an accurate assessment of the risk that fields in the catchment present, as discussed in Section 1.0. Initially it is thought that the catchment north of Ampney St Mary and Ampney St Peter presents a lower risk for pesticide runoff because there is very little reliable regular overland flow to transport pesticides to watercourses. Monitoring results support this assumption because in the 2013/14 season concentrations of carbetamide and propyzamide remained below the limit of detection, and metaldehyde at low concentrations at Calmsden Spring (PUTR.9990), the spring-fed source at the head of the catchment, and the most upstream surface water sampling point, Ampney Brook below A417 (PUTR.0329). These results were obtained during a period of prolonged and intense rainfall, increasing overland flows in the upper part of the catchment, but perhaps also suppressing the farming practices that might have raised pesticide levels in the river. From Thames Water as a buyer, a future PES framework developed to address exceedances of the drinking water standard must achieve complete certainty that it will keep concentrations below the standard at water company abstraction points, even in seasons with much higher pressures than 2013/14. A comparison of metaldehyde concentrations at the Ampney Brook at Sheepen Bridge sample point during the 2013/14 season and the 2012/13 season indicates that metaldehyde concentrations are likely to have been considerably higher in upstream monitoring points in 2012/13. Compared to the 2013/14 season slug pressure was significantly higher in 2012/13, temperatures were colder during the crop establishment stage and there was lower soil moisture deficit at the start of the metaldehyde application period (Figure 6). This highlights the importance of continued monitoring to build a more complete picture of pesticide concentrations in the catchment.

Figure 4: Soil moisture deficit and metaldehyde concentration in the Ampney Brook from 1 January 2012 to 18 February 2014. Soil moisture deficit is calculated at a regional level and the Ampney Brook catchment falls within two of these regions, the Upper Thames Catchment and Cotswolds West, therefore data is graphed for both. The metaldehyde


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application period for the catchment is assumed based on informal discussions with farmers and is not exact. There are three knowledge gaps that need to be addressed as this project is continued in order to develop a robust payment for ecosystem services framework. These are obtaining application data from farmers, knowledge of where under-field drainage exists within the catchment and how metaldehyde, carbetamide and propyzamide behave in soil. Thames Water and UWE, Bristol are currently supporting postgraduate students to investigate these issues, with initial results expected in late 2014. Application data will be vital to allow meaningful spatial and temporal comparison with water quality data. For example, it is evident that carbetamide concentrations were greatest in the Poulton Stream, but it is not known whether that is because it is a higher risk area for application or if carbetamide was not used in the other areas of the Ampney Brook catchment. It is also important to identify differences between years as we begin to build a baseline dataset of pesticides in the catchment. It is evident that metaldehyde concentrations were considerably lower in the 2013/14 season compared to the 2012/13 season (this was also true of the wider Thames Water catchment area), but we need to know whether this is because of variances in factors such as quantity applied, application dates relative to rainfall events or the location of applications. It is known that under-field drainage exists within the catchment. These drainage systems provide effective transport routes for pesticides from fields to watercourses and therefore increase the risk of applying mobile pesticides to a field. The location of these field drains are known to farmers, but have not been mapped. The behaviour of metaldehyde, carbetamide and propyzamide in soil is important to inform the development of structures that prevent pesticides from being transported from fields to watercourses. For example, metaldehyde is known to be highly soluble and very persistent in water, but is thought to degrade much faster in soil. As such, it can persist in Thames Water’s storage reservoirs for over a year, but is seldom recorded in groundwater abstracted from deep boreholes and is generally recorded at very low levels at Thames Water’s spring-fed source. Therefore, if it is proven that metaldehyde breaks down reasonably quickly in soil we could include in a PES framework the installation of structures such as drainage swales to prevent runoff contaminated with metaldehyde reaching watercourses. The continued monitoring of these sampling points will form a key part of any follow-on project and will require strong partner engagement. The results will increase the certainty that both buyer and seller can have in the process. Together with the farmer testing on their farm element a greater understanding and willingness to adjust behaviour is within the grasp of the PES partnership. As a recent project on soils concludes there is little evidence on the efficacy of different management practices to enhance and deliver soil carbon and ecosystem services (Ingram et al. 2014) A high level of engagement between buyers, sellers and intermediaries has been achieved, notably with farmers in the Ampney Brook catchment, which will underpin further work on the PES structure. The baseline monitoring of three problem pesticides will build up a long-term picture of how these pesticides behave in the catchment. The mitigation work can be assessed in order to ascertain levels of certainty and risk so that these can be factored in to any payments and increase confidence. A number of knowledge gaps have been identified which the project aims to address through continued work in the catchment.

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