Family farms reap rewards from diversificatiion

More growers and livestock producers are diversifying as they strive to secure a more sustainable future for their farm business.

Some 17% of farmers plan to start a diversification in the next five years – up from 15% in 2023. And 40% of producers already running a diversified enterprise plan to further develop their business over the next five years – up 3% on last year.

The finding – contained in an NFU Mutual survey – suggests more farmers are generating an increasing amount of their revenue from enterprises which are alternatives or complementary to food production.

Pressure on traditional farm incomes is a significant factor in many decisions to diversify. Volatile commodity prices and rising input costs have been compounded by the phase-out of the basic payment.

Farm income from diversification enterprises on average now accounts for 13% of farm turnover in 2024, the same figure as in 2023. That said, the proportion has increased substantially on some individual farms.

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.

Stronger businesses

NFU Mutual farm specialist Chris Walsh said: “Farmers are hardworking 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, farmers are providing career opportunities for other family members – including the next generation – while creating rural jobs and boosting local economies, including through tourism.

Success stories

“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.”

But Mr Walsh said diversification should not be seen as a quick fix or an easy win. Successful schemes required careful planning, good management and long-term commitment, he said.

NFU Mutual has put together an online Diversification Hub to help farmers incorporate diversification into their existing farm business. It includes a range of case studies.

For more details, visit www.nfumutual.co.uk/farmingdiversification   

Diversification checklist

Plan diversifications which fit with your farm business

Identify where to add value to your existing enterprises

Make a frank assessment of strengths and weaknesses

Evaluate whether diversification is likely to work for you

Thoroughly research the local market and competition

See professional advice early to avoid problems later

[Source: NFU Mutual]

Green schemes ‘vital to farmers’

Successful environmental schemes are vital for farmers to feed the nation and deliver for nature, says a survey.

Some 80% of respondents to the poll said payments through the Sustainable Farming Incentive (SFI) and Countryside Stewardship (CS) schemes were critical to farm viability.

The survey was carried out by the Country Land and Business Association ahead of the Autumn Budget. Failure to properly fund the schemes risked undermining confidence and stability among farmers and landowners, it said.

CLS president Victoria Vyvyan said sustainable food production and environmental protection would be at risk without the schemes

This included wildlife habitats, flood management and access to nature – as well as landscape recovery projects.