Rural News: Do We Need to Diversify to Survive?

Those who work within the agricultural industry are no strangers to challenging times and there is no doubt that the current period of uncertainty which we are all experiencing will not be the last. As a result, one of the most common questions as advisors we get asked is, with the reduction in subsidies and the rise in costs how do we make up the shortfall to ensure that we survive?

Katie Proctor, Rural Chartered Surveyor based in our Hexham Mart office, looks at the possible benefits of diversification.

There is a greater realisation across the industry now more than ever that income from farming alone is not enough to ensure the sustainability of a farming business which was clearly highlighted by British agriculture’s unlikely hero Jeremy Clarkson in his new tv series.  Of course, Clarkson’s, seemingly daily, battles to overcome rising input costs and turn a profit through both traditional and diversified means will not be news to the farming community.

DEFRA’s Farming Opinion Tracker (October 2022) states that farmers on 33% of holdings indicated that they are making changes to their farm business and a further 44% said they will need to make changes to their farm business in the next 3 to 5 years to ensure successful navigation of DEFRA’s vision for farming. Further research from DEFRA shows that 68% of farm businesses in England already undertook diversified activity in 2021/22. So, do we need to diversify to survive?

Diversification may not be the answer to all our prayers, but it may be the start of putting some confidence back into the cashflow. Diversification can come in many forms, such as holiday cottages, livery yards, milk vending machines, caravan sites, meat boxes, renewable energy, even small bales of hay for horses! The possibilities are endless, and the idea of diversifying does not need to be daunting.

The starting point for any business should be to appraise their current enterprises and by engaging with rural professionals who can help you see things from a different perspective, as well as helping you have a holistic view of your assets. Advisors and Rural Agents can provide advice on obtaining grants and financial loans for those projects which do require some elements of financial capital. As well as assisting with business planning or helping to identify assets with potential to invest in.

It is anticipated that DEFRA will provide further information on grants which will become available for such projects later in the Spring and looking ahead now may present opportunities to make up some of the current income short falls.

You can contact Katie directly or speak with any of our rural teams for more guidance on diversification for your rual business.