Research published recently by NFU Mutual reveals that that one in five farmers plan to diversify into other enterprises to support their farm business after Brexit, says a new report published by the The National Farmers Union (NFU). View the full Business Cornwall Magazine article here
The NFU Diversification Report looks at the latest trends, insights and analysis to help UK farmers explore opportunities and challenges after Brexit had some interesting findings. They surveyed farmers who had already diversified but also those who had not done so yet, in order to better understand their plans for the future. The report also includes a number of case studies showing the range of diversification opportunities available as well as highlighting a number of potential tax, planning and financial issues which farmers would need to consider if planning to diversify.
The report showed that of the farmers surveyed, 62% had already diversified and with over 90% of these reporting that their diversification had been financially successful. The most popular diversification scheme for these farmers was in the renewable sector (29%), followed by property letting (15%), holiday lets (12%). Other enterprises included livery stables (6%), outdoor leisure/recreation (5%) and farm shops (3%).
The main reason given for diversification was unsurprisingly to provide extra income for the farm (62%) but other reasons included to provide business opportunities for family members or partners (26%), to future proof the farm for following generations (24%), to utilise redundant buildings/unproductive land (20%), to provide income for short term (9%) and as part of activities to wind down the farming activity (7%). Overwhelmingly, the feeling towards diversification was positive with 89% expressing this support for schemes for the future of their farm.
For the farms which had not diversified yet, 19% said that they would definitely or probably diversify in the future with 66% of these farmers planning to do it in the next three years – the vast majority are considering holiday accommodation, followed by renewables. Encouragingly for the rural economy, 80% of farmers planning to diversify expect their schemes to create between one and two permanent jobs.
There are obviously a number of issues to consider when diversifying a farm and the report shows that 2% of farmers have used a pension fund to purchase land or buildings as part of the scheme. It also highlights the need for farmers to consider the impact on inheritance tax of any diversification enterprises. Copy credit to Business Cornwall Magazine.