With farm subsidy payments set to reduce after 2021, diversification could be an opportunity to boost incomes and help future proof farms. Andrew Lawes of Stags Professional Services sets out his top four considerations for farm diversification:
1. Why do I want to diversify?
Do you want to make better use of the farm's assets such as redundant buildings or location? Maybe you are in a popular location near the beach or the moor? Do you have skills that could be expanded upon? Does profit, succession planning or a change of direction drive your initial thoughts?
2. Have I reviewed my existing business?
How profitable is your farm and how will moving into a new business impact on turnover? What assets do you have - land, buildings, labour and capital - and are you using them effectively?
3. What ideas do I have for diversification?
The best diversification enterprise will be one that you, your family and/or staff are passionate about. This could involve anything from conservation to horses, outdoor activities, farm tourism or adding value to your farm produce.
4. What are the challenges that I need to overcome?
Do your homework; identify the demand for your new venture, assess the competition, research how to market your product, draft a business plan and consider talking to farmers who have already diversified. Is your product unique from competitors or are you entering a saturated market? You might also want to explore grant opportunities through the Rural Development Programme for England.
Farm diversification can be a really positive and exciting experience and Stags would like to help you on your journey. Please contact Stags Professional Services for further advice and information.
