Almost half of the UK’s farmers (48%) are planning to set up or expand diversification schemes – a figure which has doubled since 2018.
A report published today (February 7), by rural insurer NFU Mutual found that the UK’s exit from the European Union has sparked a so-called “diversification drive” ahead of the biggest shake-up in agricultural funding for decades.
It’s a figure which has doubled since NFU Mutual carried out similar research in 2018 and found 23% of farmers were planning to expand or start diversification enterprises.
The Present Tree
The NFU Mutual report highlights Co. Antrim’s The Present Tree, an online retail enterprise run by Catherine Cunningham.
Catherine, who runs a sheep farm with her husband Andrew, set up the online plant gifting business as a diversification project in 2013.
Catherine came up with the idea after going on a business course run by Northern Ireland’s Department of Agriculture and Rural Development (DARD).
“I learned lots about running a business and decided to combine my passion for trees with my love of beautiful design,” she said.
“Listening to our customers has been integral to our success. We want our customers to have a great online experience, just as if they are walking into a real shop.”
From its low-cost start, with an investment of £5,000, The Present Tree has now sold over 50,000 tree gifts and has ambitious plans for the future.
Martin Malone, NFU Mutual Northern Ireland Manager, said: “Northern Ireland’s farmers are looking for new business opportunities in order to spread their risk as we adapt to trading outside the EU and with major changes to government support for agriculture on their way.
Northern Ireland’s farmers have always had to adapt to changing times, and a number have been diversifying for decades. But even more are seeking ways now to support their agricultural work with new ideas and protect their farms for present and future generations.
“Whether it’s building holiday cottages, launching a wedding venue, or opening a farm shop, not only can these new businesses supplement the existing farm, they often provide other members of the family with a crucial role in the business.
“Our research shows nearly half of farmers are either looking into setting up new businesses on their land or expanding existing diversification ideas, with a quarter planning to diversify in order to create business opportunities for family members.
“However, farmers need to do careful research and costings before they start converting cow sheds into cafes.”
The report stresses the importance of detailed planning to minimise risks to the public and employees and make insurance of new diversification schemes straightforward. It also highlights the importance of looking at the financial implications of setting up non-farming activities to avoid higher Inheritance Tax Bills.
Tips for farm diversification
Diversification means using your farm’s assets, such as its land, buildings or machinery to develop a new business activity.
Diversification ventures usually set out to provide additional revenue and can complement the agricultural activity or may even, over time, replace it.
Before you start, NFU Mutual suggests considering the following questions:
- Do you have the skills, resources and commitment to make it work or would it be a distraction from the core farm business?
- Have you fully reviewed your farm business and identified strengths and areas where you can add value to your existing model?
- What are your assets – from people, land, location, buildings, finance to skills – and have you realised their full potential?
- What market and demand is there for your diversification venture?
- What makes your farm unique and sets you apart from the competition?
- Have you asked the experts for advice? For example, speak to insurers at the planning stage to ensure you understand the risks and have the right level of cover to meet your needs.