The Government plans to phase out direct support payments calculated on the size of farmland after Britain leaves the European Union, and there is uncertainty over how much proposed new farm payments linked to the delivery of “public goods” will be worth.
The results of a survey by NFU Mutual indicates that many farmers are looking to diversify in order to supplement their farming income, but this represents a “step into the unknown” for farming families, the rural insurer warns.
Fiercely volatile market returns for produce over recent decades has seen an increasing number of farms diversify, but 25 per cent of those that have added a new income stream already, told NFU Mutual that they plan to invest further in non-farming enterprises after Brexit.
Chris Walsh, the firm’s 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.”
Popular farm diversifications include into renewable energy, property letting, holiday lets, livery stables and outdoor leisure activities but diversifying does not always lead farmers away from food production.
Sheffield pig farmers Stephen and Karen Thompson hit crisis point when pig prices hit rock bottom a little over a decade ago. Rather than sell their stock they sought advice and invested in butchery facilities to produce pork, bacon, ham and sausages from their homebred herd.
Their enterprise, Moss Valley Fine Meats, now supplies more than half of all restaurants in the Sheffield area, including Chatsworth House, and it won the Diversification Award at The Yorkshire Post’s 2018 Rural Awards.
Mr Thompson said: “It was ‘foot in door’ at restaurants to start but now chefs ring me. We were one of the first to come in at a time when there were local supply chain issues, and now it seems that more people are looking for local food.”
The NFU Mutual’s new diversification report profiles how husband and wife Ian and Lesley Buxton of York started out as tenant farmers who wanted to take on and run a large dairy farm but expensive milk quotas proved prohibitive.
Diversifying instead, they established an ice cream manufacturing plant on Fossfield Farm where they have gone on to produce the now firmly established Yorvale dairy ice cream brand.
Offering advice to other farmers considering diversification options, Mr Buxton states: “Talk to and learn from other people and see what they are doing so that you can find your niche.”
Farmer Richard Bramley and his wife Brigita diversified into self-catering luxury accommodation by converting redundant farm buildings on their land in Kellfield near York almost 10 years ago.
Mr Bramley said: “Our farm produces enough calories to sustain 12,000 people a year so it’s an interesting perspective that a farm like this looks to diversify. Many farmers find that the food they produce is never enough.
“We diversified to do something we wanted to do. It was a big step into the unknown. We had to put all the money up front before we had any idea if it would work.
“I think you have got to want to do it, that is true of anything,” he said by way of advice to others.
Farmers should take care to weigh up their “step into the unknown” as they plot a profit-boosting sideline, according to Mr Walsh.
“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.”
NFU Mutual’s diversification report is intended to help farmers make diversification decisions and it is available via the insurer’s website.