Farm Income – Using BNG for Passive Income

What is passive farm income?

Many farmers in the UK are experiencing a struggle to keep up with rising costs and reduced financial assistance from the government. Farmers are looking for new ways to generate farm business income that can help them reach their financial and business goals. The Farm Business Survey (FBS) is available online, which details information regarding all aspects of farm performance in the UK.

Passive farm income refers to the revenue or earnings from agricultural or farming activities without the need for active, day-to-day involvement or labour by the farm owner. In other words, it represents income that is earned without continuous hands-on work on the farm. Passive farm income sources can vary widely and may include habitat banking, leasing land for solar panels or wind turbines, and passive investors in agricultural projects.

Our team of experts at Collington Winter are highly experienced in assisting clients with passive farm income, offering our expert support and advice on your individual circumstances. For the average farm business, habitat banking to generate a passive income could be highly beneficial in producing additional profits and strengthening the business.

What is habitat banking?

Habitat banking, also known as biodiversity or conservation banking, is a market-based approach to environmental conservation and habitat restoration. It involves the creation, restoration, or enhancement of natural habitats as a means of offsetting the negative impacts on habitats and ecosystems resulting from development projects, infrastructure construction, or other human activities.

Habitat banking operates on the principle of “no net loss” or “net gain” in biodiversity. Initially, an assessment identifies potential environmental impacts from development projects. Subsequently, a habitat bank is established, either as a physical area or as a financial mechanism. This habitat bank serves as a source of credits that represent ecological value.

Conservationists and organizations then undertake projects within the habitat bank to restore, enhance, or create natural habitats. These projects could involve reforestation, wetland restoration, or establishing wildlife corridors. As these projects progress, they generate credits, quantifiable units representing habitat quality and quantity.

Developers or project managers purchase these credits to offset the environmental impacts of their projects, ensuring that the required mitigation is achieved. Long-term monitoring and maintenance of the restored habitats are essential to ensure they provide lasting benefits to biodiversity. Habitat banking offers a structured and market-based approach to environmental conservation, fostering sustainable development while safeguarding natural ecosystems.

Habitat banking has several advantages:

• It provides a precise, market-based mechanism for achieving conservation goals while allowing development to proceed.
• It encourages long-term, sustainable habitat management and restoration efforts.
• It can result in a net gain in biodiversity if the restoration or creation efforts are successful and exceed the offset requirements.

Habitat banking is one of several approaches used to balance economic development with environmental conservation.

What is biodiversity net gain?

Biodiversity net gain is closely linked to habitat banking in that it is a conservation policy that seeks to ensure that development projects or land-use changes result in a net increase in biodiversity and ecosystem services rather than a net loss.

The concept of biodiversity net gain reflects a growing recognition of the importance of biodiversity for ecosystem health, human well-being, and climate resilience. It encourages a more sustainable approach to development that considers the broader environmental context and aims to leave a positive ecological legacy for future generations.

Biodiversity net gain is being adopted by local planning authorities as a condition for planning permission. Though the concept has been around for several years now, and many local authorities have required compliance with BNG, it is officially set to become a mandatory condition for developers by the end of 2023, ultimately promoting sustainable long-term development to protect natural ecosystems.

Using habitat banking for passive farm income

Habitat banking can be used by farmers to generate a passive farm income, meaning there are no active day-to-day duties to carry out in order to generate such revenue. By participating in conservation efforts through habitat banking, farmers can generate and offer biodiversity offsetting credits on their land, enhancing the environment. Credits can then be purchased by developers who cannot meet the biodiversity net gain bracket on their project but can offset any loss by buying credits elsewhere to ensure they are bettering the environment.

It is worth noting that farmers who offer their land for habitat banking will still retain full ownership of their land.

By integrating habitat banking into farming practices, farmers not only contribute to local biodiversity and ecosystem health but also generate a sustainable and potentially lucrative source of passive income. This approach aligns with the principles of sustainable agriculture while providing financial benefits to farm owners who prioritize conservation efforts. However, it’s essential to consult with experts in habitat banking and local environmental regulations to ensure compliance and maximize the effectiveness of your habitat bank as a passive income source.

Why Choose Collington Winter?

Collington Winter Environmental have a team of biodiversity net gain consultants who assist developers in locating biodiversity banks. In addition to this, we can also assist in securing farming passive income through biodiversity habitat banking.

Our ecologists have experience working in both large and small farming environments. We can also complete an informal initial assessment of agricultural land and sites of interest. This helps our clients to understand any probable implications and costings of habitat banking from the outset.

Please get in touch if you would like further information about BNG. We can also develop cost-effective land management plans. 

If you would like to find out more about the services we provide, feel free to contact us using the details below.