Farm Diversification: 400+ Ways To Diversify Your Farm Income

12 Most Common Farm Diversification Issues

• 1. What is the definition of farm diversification?

From Latin diversus “turned different ways…” – quite simply, turning the business of your farm in different ways. New products, new services as either extensions or new start-up business units entirely.

• 2. How can you make an application for a farm diversification grant & funding?

There are various programmes, schemes and pilots which you may be eligible for.

Strict rules of conduct apply in order to qualify. One such condition of qualification is often part funding the capital investment yourself.

• 3. Where should I begin with planning my farm diversification project?

Using a professionally developed planning framework is a valuable headstart.

Usually the offshoot strategic tool – come ‘product’ – of an experienced consultant.

Such a framework will help you pull your thoughts together in a format that will travel & translate very well.

• 4. What are the latest statistical figures for farm diversification?

According to The Farm Business Survey conducted by DEFRA in 2016-17, almost 2/3 of all farm businesses in the UK have diversified into non-agricultural businesses.

For 41% of farm businesses, diversification income accounted for approximately 25% (1 quarter) of all income.

What was the most common diversification enterprise (…we hear you ask!)?

Letting empty building space for non-agricultural use.

This type of activity on average generated £17,900 for each farm invloved.

• 5. What are the current trends in farm diversification among UK farm business?

The top 5 most popular diversification enterprises in the UK for farm businesses according to The Farm Business Survey are as follows:

1. Non-farming letting,
2. solar energy,
3. Sport & Recreation,
4. Processing/Retailing of Farm Produce and;
5. Other Renewable Energy.

No surprises the most financially rewarding (yet, seasonal!) diversification enterprise for farm businesses was tourism accommodation and catering.

• 6. How are rural business rates likely to be affected by farm diversification?

In 2017, The Valuations Office Agency (VOA) in the UK reviewed the rateable value (RV) of every commercial property.

This was the first time in 7 years that this kind of change was implemented.

The change had the affect of lowering some rates for some businesses, yet increasing rate for others. And to varying degrees.

Rises upwards of 50-100% rateable value for some rural business have been experienced by some who run more popular types of enterprises, such as pubs, storage facilities or farm shops.

Rate relief is also available for rural businesses which satisfy particular criteria, such as:

1. Small Business Rate Relief
   • (your property’s rateable value is less than £15,000 & your business only uses one property – you may still be able to get relief if you use more),
2. Rural Rate Relief
   • (…if your business is in a rural area with a population below 3,000 – you will not pay business rates if your business is in an eligible area and either: the only village shop or post office, with a rateable value of up to £8,500; the only public house or petrol station, with a rateable value of up to £12,500)
3. Exempted Rate Relief
   • (...certain properties are exempt from business rates. You may not have to pay business rates on: agricultural land and buildings, including fish farms; buildings used for training or welfare of disabled people; buildings registered for public religious worship or church halls. However, there are strict legal requirements for these exemptions.)
4. Empty Buildings Relief
   • (…you do not have to pay business rates on empty buildings for 3 months. After this time, most businesses must pay full business rates. Some properties can get extended empty property relief: industrial premises – for example warehouses – are exempt for a further 3 months; listed buildings – until they’re reoccupied; buildings with a rateable value under £2,900 – until they’re reoccupied; properties owned by charities – only if the property’s next use will be mostly for charitable purposes; community amateur sports clubs buildings – only if the next use will be mostly as a sports club)
5. Material Change in Circumstance (MCC)
   • (…affecting the enjoyment or use of property by the business due to issues such as roadworks, for example)
     

• 7. Will farm diversification plans require planning permission in order to enact?

It really depends on what your diversification plan entails.

But if it is likely to involved the change of use or amending the material integrity of your buildings or grounds, then chances are the answer is, “Yes, you need to obtain planning permission.”

Contact your planning office at the earliest point of planning in order to have a firm grip on what is expected.

• 8. How will I know what options I have for farm diversification?

Research thoroughly.

Never assume you’ve hit the bottom of the barrel when it comes to finding out new business ideas.

Even common themes need only be slightly twisted by farmers to bring about significant innovation. In such cases they have in many ways carved out new niches for themselves.

• 9. How valuable will hiring a farm diversification business consultant be?

We personally don’t think it’s necessary to hire a consultant for ideas alone, but for professional strategy and implementation they might be worth talking to.

However, as with smallholdingsforsale.co.uk, downloadable professional templates and frameworks for business planning and strategy come at a much lower cost than traditional consultancy.

It’s arguable that results via our online tools are much more satisfying than traditional argri-business consultancy, offering the following benefits:

• flexibility of use
• ongoing access to business resources
• lower cost
• customisable
• user-friendly formatting

Our business programme comes at one easy, affordable subscription level suitable for all budgets.

• 10. What tools are available to help with farm diversification management?

Need help managing your newly diversified farm business?

We also have an array of management tools and applications which help you keep meticulous records and help drive efficiencies – saving cost and increasing profits.

For something a little more bespoke, feel free to get in touch.

• 11. Are there any disadvantages to farm diversification?

Opportunity cost.

You can’t do everything at the same time.

Some things are simply sacrificed for the sake of doing others.

This is opportunity cost – to invest in one opportunity, you lose on investing in others, because resources are finite.

However, it depends on how you look at it. If the investment was worth it, then you’ve made a profitable choice.

You can’t have it all.

• 12. Where can I learn some a good lessons in farm diversification?

We’re glad you asked.

The following are real life examples of farm diversification encapsulated in case study format.

We hope you enjoy…