THE TIME IS RIGHT FOR DIVERSIFICATION
Posted on 30 July 2019

Farmers should be able to take advantage of a package of measures as they look to develop their existing businesses and open up new opportunities for revenue generation.

That’s the view of Adam Barrass, rural chartered surveyor and practice manager at Vickers & Barrass, who works closely with many farmers, supporting their growth and development ambitions.

With farmers considering diversification in the face of challenging economic conditions - or investing in existing activities to produce more robust businesses - the cost of borrowing to drive growth along with tax breaks unavailable to other industries, is fuelling a new entrepreneurial sprit in the agricultural sector.

Adam Barrass says diversification can broaden farming activities, boost year round income and looking to the future, it will be the impetus to generate strong returns on investment in an uncertain post-Brexit rural landscape.

“While the Government has guaranteed the same level of subsidy funding through to 2022, and will continue to support current schemes, farming businesses must face up to future changes to subsidies and consider diversification projects. They should be looking at their business now to ensure it will be resilient and positioned to adapt.”

Diversification comes in many forms, says Adam Barrass, and some farmers may wish to explore alternative agricultural activities, which could include rearing rare or unusual livestock, growing specialist crops or investing in modern technologies. 

Others may wish to consider the non-agricultural route, where there are divers and exciting opportunities opening up.

According to a farm business survey by Defra, 66% of farm businesses in England had some diversified activity in 2017/18 - an increase of 2% from 2016/17. A total income of £680 million was generated from diversified activities by 36,100 farms, generating more than £18,000 in extra income per new enterprise.

Agricultural diversification includes residential developments and mixed-use schemes such as farm shops and cafes, or flexible commercial business units. 

Adam Barrass said: “Where there is demand, providing tourist accommodation can also be a profitable business venture. Other popular diversification enterprises include equestrian facilities, pet boarding, cookery schools, craft workshops, shooting grounds and venue hire for weddings and parties.”

The increase in the Annual Investment Allowance for capital plant, the reintroduction of capital allowances on buildings, advantageous borrowing rates and countryside grant schemes also stimulate investment opportunities to support growth and expansion.

“The opportunity is there for those farmers looking to the future with ambition, enterprise and determination,” claims Adam Barrass. “Smart investment at the right time and in the right opportunity, will see many benefit as they secure future income streams. But any investment must be tempered by careful consideration and rooted by a strong, clear plan.” 

If you are considering a rural diversification project or would like to discuss your options, it’s advisable to seek professional advice from experts who have relevant experience and can provide professional advice and support. County Durham-based Vickers & Barrass offers professional land agency and surveying services to farmers, estates and landowners. More at www.vickersandbarrass.co.uk 

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