More farmers are planning to diversify to boost farm incomes
14th October 2024
More farmers are planning to diversify their businesses to boost farm incomes in the long-term, new research conducted by NFU Mutual has revealed.
NFU Mutual’s 2024 diversification investigation has shown that the number of farmers surveyed who were planning to start a diversification in the next five years had risen to 17%, compared to 15% in 2023.
The survey has also revealed that 40% of farmers already running diversification enterprises plan to further develop them over the next five years. This marks a 3% increase from 2023 figures.
UK farmers’ income from diversification enterprises on average accounted for 13% of farm turnover in 2024, the same as in 2023.
Renewable energy remains the most popular form of diversification among UK farmers, with 8% operating schemes such as solar power, wind turbines or anaerobic digesters, up from 6% in 2023, NFU Mutual has reported.
READ MORE: Farmers can diversify in just 90 days with off-grid cabins
READ MORE: Farmers encouraged to add value to their produce
Making most of resources available
Chris Walsh, NFU Mutual farm specialist, said: “Farmers are hard-working and innovative by their nature, and this is helping to create diversifications which complement their farming activities and make their businesses stronger.
“From vineyards and wedding venues to solar farms and wind turbines, farmers are making the most of the resources available on their land to make their businesses more sustainable. In many cases, they are also providing career opportunities for farmers’ families, while creating rural jobs and boosting local economies.”
Mr Walsh also warned that diversification is rarely a way of making a ‘quick buck’ and that successful schemes require careful planning, good management and long-term commitment.
“For the vast majority of farmers, running a diversification business is a way of supporting their farming enterprise, as EU legacy Basic Payment Scheme (BPS) support is phased out.
“There are some fantastic success stories out there, such as English wine producers becoming some of the world’s highest-rated, also fantastic wedding venues, and hugely popular glamping sites.
“To help farmers plan how to incorporate diversification into their agricultural businesses, we have developed a Diversification Hub with a wealth of information and a range of case studies showcasing successful schemes,” he added.
READ MORE: Experts advise using social media to engage with your customers
READ MORE: Check out how Herefordshire farm transformed with solar energy
Diversification planning checklist
NFU Mutual has shared the diversification planning checklist to help farmers take the first steps into the diversification journey:
- Plan diversifications that are a good fit with your farming business.
- Thoroughly review your existing farm business to identify your strengths and areas where you could add value to your existing model.
- Make a full and frank assessment of your assets, including people, land, location and buildings.
- Evaluate whether you have the skills, resources and commitment to make diversification work for you.
- Thoroughly research the market, local demand, and existing competition for your proposed diversification.
- Work closely with planners, highway authorities and insurers at the planning stage to avoid problems later.
- Cost out plans in detail and include contingency funds to help absorb future price and interest rate increases.
- Research the availability of local workers. This is often a challenge for hospitality or retail diversifications in remote locations.
For more information including case studies on successful diversification schemes and advice on insurance and risk management, visit NFU Mutual’s new diversification hub.
Read more farm business news.
