One-fifth of farmers plan to diversify
One in five UK farmers plans to diversify to remain financially sound after Brexit says new research.
Conducted by NFU Mutual, the research found that of the 62% of UK farmers who have already diversified, over nine out of ten projects have been financially successfully, showcasing the increasingly important role of diversification in the sustainability of many farm businesses.
Farmers with established diversification businesses were surveyed by NFU Mutual to gain insight into their experiences, as well as farmers currently solely involved in farming activities to understand their attitudes and plans for future diversification.
The most common diversifications to date include:
- Renewable energy (29%)
- Property letting (15%)
- Holiday lets (12%)
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Unsurprisingly, boosting farm income was the main reason for diversifying with 62% of respondents quoting this. With other reasons such a providing a business opportunity for a partner or other family member (26%), utilising redundant farm buildings or unproductive land (20%), other factors also mentioned.
However, it’s not been all plain sailing. While 89% of diversified farmers said their projects had a positive effect on the farm business, respondents highlighted a number of challenges running an alternative enterprise alongside a farm can bring, including:
- Lack of time (22%)
- Red tape (18%)
- Unreliable broadband (15%)
- Cash flow (15%)
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Among farmers who do not currently run diversification enterprises, 19% said they would probably or definitely diversify in the future.
However, just under half (46%) of non-diversified farms still believe farming provides the best potential for their holding. Other reasons for not planning to diversify included lack of access to finance, no interest amongst family members and poor broadband.