Can Biodiversity help farming businesses diversify?

Matthew Waters
Matthew Waters, Partner for Lovewell Blake

With the existing area-based payments being halved by 2024 on the way to being fully abolished by 2028, Environment Secretary George Eustice has already told farmers that the future of subsidies will be through Environmental Land Management Schemes.

Matthew Waters, Partner for Lovewell Blake

But, while those in the agricultural sector were waiting on the Agriculture Bill to pass into law, it could be the thrice-delayed Environment Bill which offers farmers and land owners a lucrative new revenue stream. 

Although the Environment Bill is not expected to pass until the autumn, within it are amendments to the existing Town and Country Planning Act which will enshrine in law Biodiversity Net Gain (BNG) as a new planning condition. The UK environmental industry’s good practice principles define BNG as: Development that leaves biodiversity in a better state than before, and an approach whereby developers work with stakeholders to support their priorities for nature conservation. 

BNG requires a 10% increase in biodiversity after development, compared to the level prior to the development taking place. During the planning stage, developers will need to use Defra’s biodiversity metric to calculate the pre and projected post-development biodiversity score to assess how this measures against the required 10% uplift. Where a shortfall is projected, they will need to consider if there is scope to increase the onsite biodiversity and, if this is not feasible or economic, will need to look offsite for this. 

Neighbouring or local landowners may therefore find themselves key to developments as, if the developer is unable to mitigate the impact locally, their last resort will be to purchase “biodiversity credits”.

These credits are only available once a developer has demonstrated they have exhausted all options on site and locally, elongating the planning process and the costs associated with it before taking in to account the cost of the credits themselves. 

The draft legislation sets a 30-year term on management of the offset site, although in many cases other legislation could see these agreements running indefinitely. Given the longevity (and likely numerous caveats) of these agreements, they will need to be carefully considered alongside existing farming and succession plans so as not to lock away land which may be needed for expansion of existing operations or which could be sold to raise future capital. 

With nearly a quarter of planning authorities having already adopted the policy voluntarily, landowners interested in utilising the expected demand can begin taking steps such as assessing the economic productivity of their land to identify areas of poor return which would be better suited to habitat creation than agriculture. Given that the trend towards more environmental schemes, with the headline phrase “public monies for public goods” already on the mind of farming businesses, some may have already begun the process of allocating poor arable land as better suited to environmental schemes.  

Given the vocal criticism of the government for the third delay to the Environment Bill from opposition parties and groups such as Greenpeace UK and the World Wildlife Fund, there will be substantial pressure for the Bill to pass into law this year and farmers, land agents and developers alike will be keen to see how the BNG offset agreements are detailed in the final version. 

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