Biodiversity offsetting - Anyone done it?

Looking for anyones experience, Ive been approached by two companies now regarding offsetting associated with nearby housing developments (on separate fields ) - One hasnt made any offer yet the other is offering £23k/ha upfront and £950/ha for 30 years linked to inflation - 0.5% with a 5% cap (ironic given the 5% cap would of seemed attractive last year, less so this year).

Has anyone else done it?

So far the basics are pretty simple - no improvement of the land, IE no new drainage, Lime or fertilizer.
Max one herbicide application per 5 year period, requiring justification IE overwhelming thistle or rush issue.

Grazing to be "prescribed" IE no grazing march to end of June, Hay can be cut once every 3rd year (field hasnt been cut for 40 years but could be).

Looks like the aim is basically a form of minimum management with grazing to gradually depelete PK reserves and to manage grass while allowing around 40 to 50 trees per HA to grow, and the grassland to revert to a form of rough pasture or a wildflower meadow.

Has anyone any experience of how these go? Obvisouly rough pasture and cutting meadows are less productive but still have a vital spot to play in farming, combined with a system paying 4x BPS rates to support farming going forwards for 30 years the appeal is strong, but obvisouly if there likely to become another BS BS /ER type save the world with thistles type of scam that wrecks the land, then Im obviously out for the count and ringing the lime man tomorrow!
 

holwellcourtfarm

Member
NFFN Member
Are they planning a baseline survey followed by updates at intervals? If not then it's a robust as a chocolate teapot.

The money is attractive, indeed you could d virtually retire on putting a 200 acre farm into that, but:

  • What impact on tax treatment of the income?
  • What impact on the land value?
  • What tax treatment if you choose to sell the land?
  • If you want to resume farming it 'intensively' after the 30 years what would it cost to do so?
  • How are the annual payments guaranteed (many developers regularly close the company and restart under a new name to escape old obligations)?
 

holwellcourtfarm

Member
NFFN Member
Why don't they just buy the land?
Because they don't WANT to own land, except short term to build on it and sell it at a huge profit. Their business model is to make the money and move on. It's why they don't retain ownership of the roads and infrastructure they create, they are only seen as an unavoidable liability to be unloaded onto anyone they can, ideally the local authority. If all else fails they set up a shell company to dump them into and then walk away from it (effectively what all "management companies" are).

Hence my questions above; are they setting up a "trust fund" to make the annual payments or what? I suspect so hence their upper limit on RPI or else they'd have to put more money in just in case inflation went wild....
 
I can’t help but have met a man involved in selling these schemes to housing developers…… there’s big money in it.
Yes, insane amounts because it enables them to push through housing fast - Just been to see a 300ac dairy purchased for offesetting, the whole lot paid at 35k an acre to buy, fenced off and to be left for rewilding.
House and barns being demolished- Insane and heart breaking, an area of yorkshire where land was 6-7k an acre 2 years ago, same business aims to buy 2000 acres a year. But 1 acre enables around 35 houses to offset the "biodiversity loss" or create even more valuable "net gain". This is then sold to developers at 10k a house or their abouts, making 200k profit for the middleman. On a 550k house costing 140k to build the cost is nothing.
 
whilst there are prescriptions in for the grazing, are there any set outcomes required?
you said 40 - 50 trees per ha . What constitutes a tree?, when and how does it get established?
What other biodiversity is required?
Tree defined as species not size, and waiting for paperwork for more detail on the grazing. Main biodiversity is species rich grassland theyre seeking as its lowest risk of failure and can, ultimately be planted with seed.
 
Because they don't WANT to own land, except short term to build on it and sell it at a huge profit. Their business model is to make the money and move on. It's why they don't retain ownership of the roads and infrastructure they create, they are only seen as an unavoidable liability to be unloaded onto anyone they can, ideally the local authority. If all else fails they set up a shell company to dump them into and then walk away from it (effectively what all "management companies" are).

Hence my questions above; are they setting up a "trust fund" to make the annual payments or what? I suspect so hence their upper limit on RPI or else they'd have to put more money in just in case inflation went wild....
Beat me to it,
some companies are buying the land themselves, typically smaller regional players and to be fair these businesses tend to be honest players.

The big nationals - Think Grenfell tower - half the companies involved don't exist 5 years on.

Most developments involve multiple companies sharing risk and pooling resources through subsidiary's like an insurance policy. Once the estate is built they dissolve and move on to the next project.

The upfront money is paid by the developer with the yearly payments in a trust and youve nailed the limits as its to do with avoiding the risk of legals sucking them back in. One model thats being muted is that as the planners view the offset as integral to planning, without it the houses become unsellable as a planning requirement has not been fulfilled - that the trust is managed by a bank who make a yearly levy on the houses and if they dont pay chases them, guaranteeing the payments and getting their management fee from the home owner. I can see this going down hill fast as people wont like paying every year.
The better one seems to be £10k per house on the first sale going into the trust, the money being invested and the bank basically gets to keep the money from investing after payout, but if the fund underperforms has to guarantee payments. Given the money looks to be 8x what the offset to the landowner is- someones making a sh!t ton without actually doing anything and im pushing for more info.
 

holwellcourtfarm

Member
NFFN Member
Beat me to it,
some companies are buying the land themselves, typically smaller regional players and to be fair these businesses tend to be honest players.

The big nationals - Think Grenfell tower - half the companies involved don't exist 5 years on.

Most developments involve multiple companies sharing risk and pooling resources through subsidiary's like an insurance policy. Once the estate is built they dissolve and move on to the next project.

The upfront money is paid by the developer with the yearly payments in a trust and youve nailed the limits as its to do with avoiding the risk of legals sucking them back in. One model thats being muted is that as the planners view the offset as integral to planning, without it the houses become unsellable as a planning requirement has not been fulfilled - that the trust is managed by a bank who make a yearly levy on the houses and if they dont pay chases them, guaranteeing the payments and getting their management fee from the home owner. I can see this going down hill fast as people wont like paying every year.
The better one seems to be £10k per house on the first sale going into the trust, the money being invested and the bank basically gets to keep the money from investing after payout, but if the fund underperforms has to guarantee payments. Given the money looks to be 8x what the offset to the landowner is- someones making a sh!t ton without actually doing anything and im pushing for more info.
Then it becomes all about the middle men making money, not the delivery of genuine net gains in biodiversity. :mad:
 
Then it becomes all about the middle men making money, not the delivery of genuine net gains in biodiversity. :mad:
Yes - seems theirs a huge market in Offsets but its not open directly to land owners or if it is its very opaque.

Just reading the legals pack - and its pretty clear the reason no one wants to own the land is, non delivery could land the land owner with the cost of buying replacement offsets for the company who brought the ones that were not delivered on - that could be more than the initial amount and the value of the land.

Seems to be two strands to it aswell - a hardline NO farming and certainly no animals strand, spoken to ecologists who were vegan and proud of the damage this will do to farming as its targeted at grazing land - and the other side which seems more akin to a form of Private Stewardship scheme with annual payments not lump sums.
 

Formatted

Member
Livestock Farmer
Location
SE
Has anyone else done it?

I am a district councillor, so to a degree have some understanding of the requirements that as the planning authority that we put on the developers. Biodiversity net gain is a requirement now for new developments, in really simple terms this means if they destroy an acre of meadow, they need to pay to create a 1.1 acre meadow elsewhere, our rules are that it should be within the planning area i.e district. It is obviously more complicated than this.

The money is real and of enough value that it is worth exploring. There are a few pitfalls to look out for, and you may need to get third party advice the problem is that because this is all fairly new there aren't many experts.
  • I'd be wanting to check the details of the agreement so they don't create a liability, example if are wanting X amount of butter cups by m2 and you don't fulfil that what happens?
  • Is the agreement with an entity that is going to fold after the development is complete? Some of these large house buildings to avoid warranties create companies just to sell the houses and once they are complete the company folds with the profit shifted to the parent company, leaving you with an agreement that the local planning authority will be coming to enforce but no payment
  • What are they promising the local authority? This will be in the planning documents submitted to the council once you make your agreement, make sure what they promise to deliver is what you think you're getting involved in. Particularly if your agreement is 30 years, is the developer proposing to the council that your commitment is perpetual.
It's a big growth industry and it's not greenwashing either there is the potential for farmers to make a sensible return whilst being able to continue to farm. Are you dealing with one of the intermediary companies or with a developer directly?
 

unlacedgecko

Member
Livestock Farmer
I visited a Cambridge county council farm where this was being used.

The Biodiversity Net Gain Tradeable Assets were central to tenant selection. Basically a 300ac arable farm was going to be incrementally converted to calciferous low input grass land with the prescriptions listed about.

As a tenant the stipulations were enough to make it unworkable as a stand alone unit.
 

holwellcourtfarm

Member
NFFN Member
What is meant by biodiversity anyway?
Now THAT'S a good question.

To ecologists it is the number of different species inhabiting a site (all species, not just plants or just birds or just mammals or just insects or just fungi......), the population of each one, their resilience and stability and the degree to which they all function together as a community within the physical space being described.

To a town planner (and, thus, a developer) it's the score according to the "DEFRA Biodiversity metric 2.0".

:scratchhead:
 
I am a district councillor, so to a degree have some understanding of the requirements that as the planning authority that we put on the developers. Biodiversity net gain is a requirement now for new developments, in really simple terms this means if they destroy an acre of meadow, they need to pay to create a 1.1 acre meadow elsewhere, our rules are that it should be within the planning area i.e district. It is obviously more complicated than this.

The money is real and of enough value that it is worth exploring. There are a few pitfalls to look out for, and you may need to get third party advice the problem is that because this is all fairly new there aren't many experts.
  • I'd be wanting to check the details of the agreement so they don't create a liability, example if are wanting X amount of butter cups by m2 and you don't fulfil that what happens?
  • Is the agreement with an entity that is going to fold after the development is complete? Some of these large house buildings to avoid warranties create companies just to sell the houses and once they are complete the company folds with the profit shifted to the parent company, leaving you with an agreement that the local planning authority will be coming to enforce but no payment
  • What are they promising the local authority? This will be in the planning documents submitted to the council once you make your agreement, make sure what they promise to deliver is what you think you're getting involved in. Particularly if your agreement is 30 years, is the developer proposing to the council that your commitment is perpetual.
It's a big growth industry and it's not greenwashing either there is the potential for farmers to make a sensible return whilst being able to continue to farm. Are you dealing with one of the intermediary companies or with a developer directly?
Both, dealing with a developer directly (parent of the development shell, as theyre looking for a site that could cover developments going 10years into the future).

interesting point you make about the council persuing the landowner if the deal isnt met - Legals Ive received basically state unless the council is party to the agreement the contract becomes null and unenforceable as a lease or normal commercial contract on non payment - If the annual payment is not made, then the contract is breached - serve notice as normal and if not remedied then it can be deemed void as all normal contracts - Council would only be able to persue the land owner if the land owner had an agreement with the council directly and agreed to the contract.
In effect the landowner is Selling the "offset" to the developer to allow them to "offset" the development. If the developer does not pay for the offset, then the landowner does not have to provide it to them, (think like the BPS entitlements) .

Their is no legal mechanism in planning law or contract law for the council to force the 3rd party landowner to treat.


I think this above sums up why the developers do not want to own the land at all - if they need to, or if something happens and they cant pay, the council cant do a thing
 

Formatted

Member
Livestock Farmer
Location
SE
If the annual payment is not made, then the contract is breached - serve notice as normal and if not remedied then it can be deemed void as all normal contracts - Council would only be able to persue the land owner if the land owner had an agreement with the council directly and agreed to the contract.
Which council will have otherwise why would any developer bother?

They'll just say they are doing it and then once the houses are built not do the offsetting. There is a type of agreement called S106 which is an agreement between the council for monies and services rendered in exchange for planning permission, they are watertight and these offsetting agreements between developer and council will be similar.

I have been at this long enough to know that developers will do anything to get planning permission and that includes selling you up the river. If you're happy that you aren't going to get screwed then it's a great way to increase your income whilst providing environmental benefits.
 

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Man fined £300 for bonfire-related waste offences

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Written by William Kellett from Agriland

court-640x360.jpg
A man has pleaded guilty at Newtownards Magistrates’ Court to waste offences relating to a bonfire next to the electrical sub-station on the Circular Road in Newtownards, Co. Down.

Gareth Gill (51) of Abbot’s Walk, Newtownards pleaded guilty to two charges under the Waste and Contaminated Land (Northern Ireland) Order 1997, for which he was fined £150 each and ordered to pay a £15 offender’s levy

On June 25, 2018, PSNI officers went to Gill’s yard, where they found a large amount of waste consisting of scrap wood, pallets, carpet and underlay.

Discussion with Northern Ireland Environment Agency (NIEA) officers confirmed the site...
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