How to supplement farm income

According to rural insurer NFU, almost half the UK’s farmers are either planning to set up a new business in addition to farming or expand on other things they are already doing because of the UK’s exit from the European Union.

NFU Mutual found that 48 per cent of the farmers polled are planning to set up or work on diversification plans, double the figure recorded in 2018, following the shake-up brought about by Brexit and the biggest change in the way agriculture is funded for decades.

Under the post-Brexit regime, the Government plans to phase out direct payments in England over seven years, starting in 2021. These payments will be replaced by a new system rewarding farmers who undertake environmental work, including encouraging access to the countryside and mitigating climate change.

However, according to the NFU report, forward-thinking farmers are trying to get ahead of the game by diversifying their businesses now to boost profitability and prepare for the future.  They are moving into new areas such as tourism, hospitality, retail and renewable energy.

This could be a good move, as figures from the Department for the Environment, Food and Rural Affairs (Defra) show that diversification generated income of £740 million in 2018-19, a 6 per cent increase on the year before. That figure is expected to increase further as direct payments decline, as farmers will look for other income streams.

However, as a spokesman for NFU Mutual said, although many farmers will be looking for alternative sources of income, there is only so much room for farm shops and holiday cottages, so farmers thinking of diversifying will need to do careful research and draw up budgets before they make the move.

For help and advice on matters relating to the agriculture sector, contact our expert team at Milsted Langdon today.

Posted in News.