Opportunities for Diversification
DEFRA’s Farm Business Survey reports that over 60% of UK farms run a diversified enterprise as part of their farming business, bringing an average of £10,400 extra revenue per farm. With subsidy payments only guaranteed until 2021, and being phased out by 2027, diversification is perhaps more significant than ever. There is no requirement to farm to receive this subsidy, and so payments during this time can also be used to fund diversification ventures.
The NFU’s Diversification Report presents a very positive view of farm diversification. Their survey found that the most common form of diversification was renewables, with 29% of those surveyed operating in this industry. A further 15% were involved with property letting, with other activities including holiday lets, livery, events venues and farm shops. The survey found that 62% of respondents started their new enterprise to generate extra income, whilst 26% wanted to provide a business opportunity for a family member and 20% wanted to utilise redundant buildings.
The survey also found that 66% of respondents had made a profit within five years, although 46% of farmers from non-diversified holdings said that farming provides the best potential for their holdings. Whilst this is the case for some farms, there are certainly plenty of opportunities for others to diversify into new enterprises.