Fifth of UK farmers plan to diversify to survive after Brexit

One in five farmers plan to diversify post-Brexit in a bid to make their farms sustainable without direct subsidies, according to a new report.

The NFU Mutual Brexit Survey shows over 94% of existing farm diversification schemes are successful.

Almost two-thirds of diversified farms say income produced is “vital” or “significant” to their farm.

The rural insurer’s diversification report provides information on the latest trends, together with expert insight and analysis to help farmers make decisions on the future direction of their farm businesses after Brexit.

NFU Mutual surveyed farmers with established diversification businesses to gain insight into their experiences, as well as farmers currently solely involved in farming activities to understand their attitudes and plans for future diversification.

Survey results

The research found that from the 62% of UK farmers who have already diversified their businesses, over nine out of 10 ventures (94%) have been financially successful.

The most common diversification was renewable energy (29%), followed by property letting (15%) and holiday lets (12%). Other types of popular enterprises included livery stables (6%), outdoor leisure activities (5%), and farm shops (2%).

Not surprisingly, boosting farm income was the main reason for diversifying – quoted by 62% of farmers surveyed. Other reasons included providing a business opportunity for a partner or other family member (26%), utilising redundant farm buildings or unproductive land (20%), and providing a short-term income (9%).

While 89% of diversified farmers’ said their schemes had a positive effect on the farm business, respondents highlighted a number of challenges running an alternative enterprise alongside a farm.

These included a lack of time (22%), red tape (18%), unreliable broadband (15%), and cash flow (15%).

Of those farmers who had already diversified, 25% said they were planning to further develop non-farming enterprises after Brexit.

What non-diversified farmers said

Amongst farmers who do not currently run diversification enterprises, 19% said they would “probably” or “definitely” diversify in the future.

However, just under half still believe farming provides the best potential for their holding. Other reasons for not planning to diversify included lack of access to finance, no interest amongst family members and poor broadband.

Top choices for farmers now planning to diversify include:
  • Caravan/camping sites (27%);
  • Other holiday accommodation (20%); and
  • Renewable energy (20%).

Encouragingly for the rural economy, 80% of farmers planning to diversify expect their schemes to create between one and two permanent jobs.

Chris Walsh, NFU Mutual farm insurance manager said: “The UK’s farmers are currently facing the greatest challenge to their future for generations, so we are working hard to help them make informed choices about the best route for their farms and families.

The basic choices farmers have available to them as direct subsidies cease are to maintain their current business models, specialise, intensify or diversify.

“Every farm is different and making the right choice depends on many factors including the farm’s location, land type, family structure, financial and skills set.

“Farmers are incredibly resourceful – but for many farmers, setting up a non-farming business is a step into the unknown so our report sets out clear information on the opportunities and challenges of diversification, together with insight from existing diversifiers and industry leaders.”