Farm Diversification, keeping ahead of the curve

We would imagine that many in the agricultural world know what farm diversification is. In fact, it’s something that loan companies are more than happy to support. But what actually is it? In general terms, it is an alternative enterprise which can be managed from the existing steading to generate additional income.

Farm diversification comes in a range of shapes and sizes. It can vary from camping grounds, barn conversions and farm shops, all the way through to spa hotel facilities (though costs may differ!) Most farms will want to maximise income against cost, hence why camping, pods and yurts are so popular. This is due to them requiring relatively low investment and maintenance. Some heavier investments such as barn conversions are also popular, however, a return on investment for these projects can take a few more years.

The possibilities are almost endless for diversification, but some may not appeal to everyone. One project we completed was for a biomass plant for methane recycling. This job entailed taking a slurry tank and putting a large ‘tent’ over it. This would then collect the methane to power a biomass boiler, which in turn was used to heat milk from the herd that filled the slurry tank in the first place. This was then turned into cheese! Neat, but not for everyone…

On top of this, we have been asked to investigate a number of other options, including a private school, bespoke ‘hobbit holes’ for camping, conversion of steel shipping containers to holiday chalets, and a stack of containers in a farm building for self-storage units. All viable propositions and all farm diversifications. We haven’t been asked for a carnation plantation a la “Jean de Florette”, but stranger things have happened in 2020.

Whilst the planning system is generally supportive of farm diversification, we have looked at a number of farms where the farming activity has become very secondary to the other businesses at the farm. This raises the question of whether it is even farm diversification, or simply no longer a farm. Whilst this is a question that should be asked before preparing a business plan or a planning application, there are very few rules and guidance on the topic.

It is a general rule that, if the additional project is responsible for producing more income than the core farm business, then it is probably a business too far. Another way to look at it is if you’re spending more time herding tourists and holiday-makers, and your yard is full of pet lambs, chicks, goats and calves, then you’re probably too far into your farm diversification.

With the UK now out of the EU, many of the grants and subsidies will begin to dry up. Some schemes may continue in a different form, but many traditional farms will have to look at alternative income sources. Whilst diversification is one option, latecomers may find reluctance in the planning system if their area is already saturated with camping grounds and the like. To get ahead of the curve, it’s recommended to start early and think laterally if your project is to stand out in the market.

If you have a run-down barn, a patch of non-productive land or a yearning to grow lavender, chillies or carnations, contact NWA Architectural.

© North West Auctions 2017 - 2020. All rights reserved.
North West Auctions is a limited company registered in England and Wales. Registered office: J36 Rural Auction Centre, Crooklands, Milnthorpe, Cumbria LA7 7FP. Registered number: 03950131
NWA Professional and NWA Property are trading names of M B Hodgson & Son Ltd registered in England and Wales no 3839884
Website by www.thecreativebranch.com
  • Royal Institution of Chartered Surveyors logo
  • Central Association Agricultural Valuers - CAAV logo
  • Ombudsman logo
Top
Close