Farm diversification ideas: How to do it & the benefits

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Farm diversification: How to do it and the benefits

The farming industry is currently experiencing the biggest change it has seen in half a century.

The aim of the UK Government’s momentous shake-up of agricultural policy is to benefit wildlife, nature and to help tackle climate change for future generations.

As direct payments are phased out, farmers and land owners are instead being supported to introduce sustainable farming practices, create habitats to encourage biodiversity, establish woodland, wetlands and other areas that will enhance ecosystem recovery – and explore how to diversify their farm business.

Farm diversification is becoming an increasingly popular tool for farmers to future-proof their business and mitigate against risk. A farm with diverse revenue streams is less vulnerable to challenges such as market fluctuations or environmental factors.

According to the NFU Mutual Voice of the Farmer July 2023 survey – which included 1,703 UK farmers – 34% of farmers have already diversified their farms. And 37% of those expect the importance of non-farming activity to grow over the next 5 years.

There are dozens of ways to grow and diversify your farm business. Here we explore some of the options.

Ways to diversify your farm business

Sell your produce

Consumers are increasingly concerned about where their produce has come from and animal welfare. Companies such as Riverford Organic Farmers and The Dorset Meat Company have proven it is big business. There are a several ways to sell the products you might already be producing. You can set up a farm shop on-site or you could sell meat and veg boxes direct to the local community. You can also sell them online via sites like Oooby which specialise in small-scale production. All of these options give you the chance to increase revenue on what you already produce while strengthening the connections within your local community.

Woman delivering a farm shop delivery to a customer
Rent your space

If you have unused watertight buildings, you could consider renting them out as storage space to local businesses, sports teams or others in the community seeking to store equipment and other storage items on a seasonal or long-term basis.

Provide accommodation

Renting out accommodation on your farm can be one of the most lucrative diversification methods. It will require some initial investment if you don’t yet have space to offer, but there are many ways you can create a welcoming home-from-home for visitors. Old barns or annexes can be converted into self-contained accommodation. Spare rooms can become B&B space. Alternatively, you could put shepherd’s huts, glamping tents or cosy cabins on an unused area of your land. There’s a lot to consider to ensure you have all the infrastructure in place, but it can be very financially rewarding. It can also boost the local economy by sending your guests to other businesses.

Glamping tents on farmland
Make the most of what you already have

Are there avenues that could be explored in relation to your existing land and livestock? Could you open your doors to visitors for experience days, school or higher education visits, farm tours, workshops, demonstrations, cookery classes or tasting events, allowing people to experience farm life and get closer to nature? Do you have rare breeds that could either be used for breed-specific produce, or even as filming opportunities with your land as a backdrop? Authentic farm content for photoshoots, videos, and other media productions can be a relatively low-input way of bringing in some additional revenue.

People peeling vegetables in a cookery class

Other things to consider

If you’re starting to consider farm diversification, the key is to think creatively. Don’t immediately dismiss an idea as an impossibility. Explore all the options. Look at the assets you already have and how you might leverage their revenue. We recommend you choose one avenue initially and do it well. Once that’s established, then you can look at others. Make sure what you choose to do can be managed alongside daily farm life, or bring in resources to help manage it.

Using new digital technology goes hand-in-hand with diversifying your business. For example, if you offer accommodation or set up a farm shop, you’re going to need a website or social media presence to promote this new aspect of your business. So be prepared and take the time to learn new skills.

Diversification can bring benefits to those beyond your own farm boundaries. Depending on what you do, it could have a positive impact on your local community, increase customers to other businesses nearby, create employment opportunities and contribute to the local economy.

Farm diversification is one of the best ways you can spread the risk in these challenging times, and ensure the future of your business for years to come. If you’d like to find out more about farm diversification strategies, join one of our in-person or online information workshops. You can also sign up to receive our newsletter, which brings you the latest news and guidance on how to navigate the agricultural transition.

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