How ‘water premiums’ for farmers could transform rural landscapes

25 March 2026

Jo Caird reports on an innovative alliance between water companies and regenerative food businesses that's helping farmers to protect water, rebuild soils and bring nature back into farmland

“There's a certain amount of hand holding that needs to be taking place,” says Richard Horton, a third-generation tenant farmer responsible, along with his parents, for 1,200 acres of Crown Estate land in Wiltshire. “Farming is so risky, especially at the moment. If you say to somebody that they completely need to change how they're farming, you've got to lower that risk.”

For Horton, that hand holding takes the form of payments from Wessex Water in exchange for managing his land in a nature-friendly fashion. Horton has been working with the utility’s catchment management team for nearly a decade, experimenting with techniques such as ‘cover cropping’ (as an alternative to leaving fields bare in winter) to maintain soil integrity and prevent erosion and nitrate leaching.

In 2024, this duo became a trio, with the arrival into the mix of the regenerative food and farming business Wildfarmed. The company pays Horton a premium for wheat grown to a series of audited standards constructed around the principles of regenerative agriculture. That means diversity of planting, protecting the soil with cover crops, and minimal chemical inputs and soil disturbance, measures that Wildfarmed checks are taking place using techniques including sap testing.

Cattle grazing alongside a wheat field on Richard Horton's Wiltshire farm

Wessex Water pays Horton an additional £250 per hectare of land farmed to Wildfarmed’s standards, with funding drawn from the utility’s Water Industry National Environment Programme (WINEP) commitments, which are recovered from customer bills. It’s a relationship that benefits all parties, says Hannah Martin, catchment advisor at Wessex Water: “We were looking at other ways that we could offer support to farmers to do practices that would improve water quality. Wildfarmed are looking for growers, and we're looking to protect our sources.”

Horton was already sold on the benefits of regenerative agriculture before Wildfarmed came along, but “the payments make it easier, especially with the loss of BPS,” he says, referring to the area-based Basic Payment Scheme for farmers, which has been replaced by Environmental Land Management Schemes (ELMS) that offer conditional payments linked to delivery of actions for environmental benefit.

Market demand

Wildfarmed began its foray into the water sector through a partnership with Affinity Water that came about following a meeting of minds in summer 2023 at Groundswell, an annual festival dedicated to regenerative agriculture. Like Wessex, Affinity had for some time been paying farmers in priority areas of their catchment to plant cover crops to improve water quality. As the AMP7 funding period ended and AMP8 began, Affinity was “moving from trying to solve a single-issue problem into looking more holistically about how we could create more resilient catchments for water,” says Alister Leggatt, the company’s environmental strategy and delivery manager.

That more holistic outlook has multiple strands, including farmer outreach, skills development and a range of payment schemes. Partnering with Wildfarmed added another, explains Danny Coffey, Affinity’s catchment asset manager: "That's the market then driving this change."

Wildfarmed works with around 100 growers around the UK, who supply wheat, oats and barley for the company’s flour and own brand bread products. It in turn supplies around 1,000 food business, both in the UK and internationally, ranging from artisan bakeries to national chains including Nando’s, Franco Manca and Ask Italian. At the heart of the relationship with Affinity, says Rob Bray, Wildfarmed’s chief sustainability officer, is the water company’s “desire to do something much more scalable and systemic. We were able to look at a model whereby Wildfarmed is paying its growers a premium for growing these crops in this way, and then Affinity was also able to complement that.”

In addition to Affinity and Wessex, Wildfarmed is now also partnering with South Staffs and Cambridgeshire Water, Southern Water, Severn Trent and Thames Water, with the water premiums scheme operating slightly differently in each case. The common denominator is the product. “What customers know first and foremost is quality,” says Bray. “It's a high-quality product that is fully traceable back to the people who grew it and how it's been grown, which is so important.”

He goes on: “And then you have all the associated benefits around biodiversity, soil health, water quality, reduced carbon emissions and also, importantly, the community impact on the farmers themselves.”

This traceability element represents a step change from the conventional system in which most British farmers sell their grain to merchants or trading houses, who pool and blend it before selling on to millers, maltsters, exporters or those producing animal feed or bioethanol. Prices are largely set by futures markets, with premiums or deductions made according to grain quality.

“By the time it gets into the products on the shelves, no one has a clue where anything's come from. What we're trying to do, is that provenance and traceability, because people do care,” says Bray.

For Coffey, this customer demand is a powerful force, acting on farmers of all different scales and types of farming businesses. “Landowners are attending the likes of Groundswell, coming back with ideas and going to their contractors,” he says. “We're seeing some of these contract businesses moving more towards regenerative agriculture purely because the market is moving in that way. So that there's that working on our side.”

That movement is promising, but is it enough? With agricultural land accounting for 69% of the total area of the UK, our landowners and managers hold the key to addressing the biodiversity and climate crisis. As the British Ecological Society put it in a 2025 report entitled Regenerative Agriculture in the UK: An Ecological Perspective, “If we are to reverse the decline of biodiversity and soil health, both in the UK and internationally, then improvements to the way we produce food are urgently needed.”

Keeping it simple

Bray is bullish about the potential of the Wildfarmed model: the company is working with 100 growers now, but “the opportunity is limitless”. Its strength is its simplicity: “If you're in a farmer's shoes, it's a big mass of different drop downs and schemes that could or couldn't work for them. What we are trying to do differently is simplify it. We say, ‘Please grow to these ways, these are the benefits, and then we'll pay you a premium’.”

It’s certainly working for Horton, whose only challenge now is figuring out a way to be renumerated in a similar fashion for nature-friendly crops other than wheat. “I don't want a monoculture. I don’t want to be growing wheat all the time” he says. In an ideal world, Horton would “grow different crops that all generate a premium that, as a whole, brings the average [earnings] up. At the moment, Wildfarmed is a percentage of the farm, but it's not a massive percentage.”

Martin Lines, CEO of the Nature-Friendly Farming Network and a farmer himself, is unequivocal about the role of the private sector in mainstreaming regenerative agriculture. But, he says, as more food businesses, water companies and other private actors begin paying farmers to farm with nature in mind, “the challenge is multiple different suppliers paying us with different measuring. We need a standardised set, a matrix of measures.” Wildfarmed’s “clear standard” offers an example of how to do it well, according to Lines.

Clarity here is essential not just for farmers but for the private sector too, Lines goes on: “Everyone's trying to feel their way through it. What's the added value they are getting?”

Martin Lines, CEO of the NatureFriendly Farming Network, on his farm

The government could help, he goes on, by creating the “frameworks and measures to make the private market work”, but the mood music is important too. “It will accelerate over the next few years, if the government steadies the course. The moment they talk about pushback on BNG [biodiversity net gain] and nature markets, why would an investor that wants long-term outcomes want to invest?”

Looking long-term

A focus on the long-term is as relevant for water companies seeking greater resilience in their catchments as it is for food and other private sector businesses buying into nature-friendly farming as a way of future proofing their own profit margins. “The thing that everyone's trying to avoid here is a one-year hit of change,” says Bray. “We're financing the farmers to make that transition to a commercially resilient system which incentivises farmers to bring nature back into their farms.”

To achieve the “systemic, long-term change” that Bray describes, everyone is aware that funding is just one piece of the puzzle. “A lot of it has to do with mindset,” says Bethany Eaton, a senior catchment advisor at Affinity Water. “The top percent of farmers are thinking out of the box. Now it's just giving everybody else the confidence and the knowledge.” With that in mind, farmers in Affinity’s priority catchments have access to the company’s ‘Healthy Soils Connected’ courses. These have been specifically designed by Eaton to enable knowledge exchange that will have a life beyond the farmers’ financial engagement with Affinity.

As Danny Coffey explains: “Our funding isn't necessary for them to go on with the soil management approach. They've got that idea now. That's the only way we're really going to get the change across the landscape. If they're relying on us or the government for an annual payment for cover cropping, then it's not going to work for the biodiversity crisis and for protection of the soils and water.”

It’s still early days for Wildfarmed’s partnerships with water companies, but whatever the legacy of this particular initiative, Rob Bray is sure of one thing: “There's no version in my mind of farming that isn't regenerative in the future. It's just a question of when.”

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Read about Spongy Landscapes, CIWEM’s new policy briefing on water stewardship in rural landscapes, which will be released next week. CIWEM members can access the report early here.

This article originally ran in the Spring 2026 print issue of The Environment magazine, available to members via MyCIWEM. Non-members can also sign-up to our monthly digital newsletter.

Jo Caird is editor of The Environment