Huge choice makes the decision difficult

21 September 2001

Huge choice makes the decision difficult

Know you have to find something to supplement dwindling mainstream farming

income (or provide employment for staff or family) but havent the faintest idea

what? Catherine Pearce and Emma Stead from Smith-Woolley provide some

pointers to finding that elusive bolt-on goldmine to David Cousins

SUCH is the variety of British farmers, its sometimes hard to pinpoint trends that affect a high proportion of them. But after a year that has seen the most serious livestock disease outbreak for 100 years, the worst weather for 250 years and the lowest commodity prices for 25 years, it doesnt take a genius to guess that large numbers of farmers are wondering how much longer they can carry on farming as they are now.

The most obvious answer is to diversify your business. But into what? Its a question that increasing numbers of farmers are asking, say Catherine Pearce and Emma Stead, both rural surveyors from Smith-Woolleys Collingham office. Like many similar firms, they are gearing themselves up to provide answers on two fronts.

One is giving advice to the person who knows he or she should be diversifying but doesnt know what into. The other is the person who has decided on a new business, but wants the feasibility of it looked into.

"In the past farmers havent had to find this sort of advice. Theyre used to running their farms in isolation and some dont realise the range of options or the expertise thats out there," says Mrs Pearce. "More and more people are coming to us, either to sound us out on a particular idea or to ask us to look at the options."

While firms like Smith-Woolley cannot have intimate knowledge of all of the estimated 150 types of diversification currently practised by farmers, they can act as knowledge brokers, says Miss Stead. They can use expertise garnered by others of the firms offices around the country or turn to professional contacts elsewhere in the industry to find financial and market information about particular fields.

But how to get moving on the right path through the maze of different possible diversification businesses out there? First find a piece of paper that isnt already covered with IACS calculations, phone numbers and rough technical drawings and make a checklist.

Physical assets

Theres a temptation – particularly if your family has farmed on the same site for generations – to see everything around you solely in its farming context. That old brick barn, for instance, which has a roof too low for a tractor cab to get under and has therefore always have been a place for storing a few small bales could have other uses.

Some potential alternative uses are obvious. If the farmhouse is a large one and the kids have grown up and moved away, could you turn over some of the rooms to B&B? A ghastly thought for those who value their privacy and cant stomach the thought of cooking eggs and bacon day after day, maybe, but a possibility nonetheless.

Dont always think of B&B in terms of tourists, says Mrs Pearce. Many businesspeople would rather stay in a farmhouse B&B than suffer the anonymity and soullessness of modern hotel chains. And if you have, say, a regional airport or large firm based nearby, you may find they need regular accommodation for air-crew or staff.

Its not unknown for farmers to turn the whole farmhouse into a hotel and move into a bungalow elsewhere on the farm. A major undertaking, certainly, but with UK room rates among the highest in the world, theres a potentially profitable market out there.

Look at the farm buildings with a businessmans – as opposed to a farmers – eye. Is most of the farming carried on in relatively modern buildings, while a separate set of traditional barns gets used only as an oil store, extra bale store or farm machinery retirement home? Then they might well be an ideal target for conversion to something else.

This can be an expensive option. Conversion of three or four small traditional barns to holiday accommodation, offices or a tearoom/restaurant could cost between £100,000 and £200,000. But it may be that you have a newer steel portal building that could be relatively cheaply converted to storage for a local companys furniture, vehicles or files. But bear in mind your location. What works well on the outskirts of Birmingham may be a no-hoper in the wilds of Northumberland or north Wales.

Now look at the fields relatively close to the farmstead. Is there land at the bottom of a valley that is too wet for crops or animals? Perhaps it could be converted into fishing lakes. The sheer number of anglers in the UK means this option shouldnt be ignored. Equally, if you have a stretch of river running through the farm, its not beyond the bounds of possibility that the fishing rights could be sold.

And while were talking about country sports, do you have a shoot on the farm? If not, and particularly if you have some nice sweeping countryside and are within an hour or twos drive of London, there could be money to be made from selling the shooting rights or setting up a shoot. If the thought of pheasants, keepers and beaters doesnt appeal to you, theres always clay pigeon shooting.

What if you have woodland thats not much use for anything? Theres still a market out there for people to come and play paintball games and for companies to send their staff on bonding or team-building exercises.

Not too far from that, mentally at least, is kart tracks, ATV tours and four-wheel drive vehicle tracks. For the cost of a few thousand £s on small petrol-powered go-karts, you can set up a track that will appeal to the publics seemingly insatiable desire to get out into the fresh air to do something active.

Equally, many farmers have set up 4WD tracks or conduct ATV tours of the farm for tourists. But, as with all noisy activities, you will need to take account of the planning authorities, local residents and farming neighbours. And beware – some of these activities can be quite time-consuming, especially at weekends.

There are lower-key activities to consider. You can get involved with caravans, either storing them for people who havent got room for these great white behemoths on their suburban drives. Or you can have up to five caravans on a Certified Location.

Wondering about a full-sized caravan park? Theres no doubt a market out there for nicely-landscaped, low-density caravan parks, but the planners have a profound dislike for them. An alternative might be to install log cabins in a piece of woodland as self-catering accommodation. Not a cheap option – and youll need planning permission – but you do then have something that can be marketed as an alternative to the standard stone-cottage experience

Mental/managerial/manpower assets

Anyone embarking on the diversification path needs to conduct a little gentle psychological self-analysis, says Miss Stead. You have to decide whether you are happy dealing with the public, either in small numbers or en masse, she points out. If you think you could learn to love the public then all sorts of avenues beckon.

If not, stick to making something like garden furniture or metal bird-feeders for local garden centres or processing food (see below). Or get other family members to do the interfacing-with-the-public bit.

Equally, how much labour do you have available to throw at this venture? If you are single-handedly running 1000 acres of arable, a tourism-based venture that peaks in August might be tricky. But then many of these bolt-on enterprises are run by wives, sons and daughters who are pleased to have something challenging to get their teeth into.

What else can I do?

Diversification doesnt necessarily mean non-farming. If you dont feel confident with the more extreme diversification options, you could go organic or tackle alternative crops. These range from the more obvious ones like lupins, flax, energy crops or vegetables to the exotic end of the market like herbs, oils and even ginseng.

Its fair to say that many of these are relatively small, niche markets that cannot stand thousands of farmers suddenly piling into them. But theyre worth a little research, particularly if you think you have strong marketing skills or could tie them in with a farm retail operation/visitor attraction whereby people could see the crop being grown/processed and buy the products from the farm shop.

What about plants for the nursery/garden centre trade? You only have to go to a garden centre (especially in affluent areas) on a sunny Sunday in June to see how buoyant this market is. Theres no reason in principle why farmers shouldnt nudge into this market – many have been quietly doing it very successfully for years – except that it will require a new set of skills and some investment in equipment and staff. And you need to be on the right soils.

Food processing

One of the areas highlighted in MAFFs England Rural Develop-ment Plan is the business of farmers getting into processing the food they produce. Many have been doing that for years, like the dairy farmer who makes icecream and sells it from a shop on the farm. Or the farmers wife who makes cakes and pies for the local WI market.

But the advent of farmers markets and the internet has widened the scope of this area of potential diversification. One obvious move is to learn butchery skills yourself and then, rather than selling pigs to a processor for peanuts-per-pound, make them into ham, bacon and sausages and sell them at the local farmers market yourself. If you cant face learning butchery skills, many butchers will now do the processing for you at a set fee.

Equally, its not hard to see how farmers markets could bring opportunities for specialisation. For instance, there are farmers in the US who grow 40 varieties of potato including many historical/ old-fashioned ones that appeal to the current surge of interest in food.

And the internet? Its probably a little risky to rely on it as your sole form of marketing, but it will no doubt come. A lack of widely known-about on-line directories of British produce is probably hampering things, too.


You cant overestimate the importance of this. The nearer you are to centres of population and the better the road network around the farm is, the wider the range of diversifications that will be available to you. Tough, but true.

Will it make money?

Only you, your accountant and fate can decide this. Gut feeling when starting a new business has sometimes propelled people on to dizzy financial heights. But for most mortals, the more you can do in the way of feasibility studies, the more expert information you can tap into and the more research you do, the better your chances.

Check out the size of markets for any product/service locally. Talk to the local council/tourist board, find others doing the same thing, drive around and work out how much competition you will have.

And remember that turnover isnt the same as profit. You can think youre turning over a lot of money, but by the time you deduct all the real staff costs, bills etc you can find youre hardly making any money at all. On the other hand, you may be pleasantly surprised…

Smith-Woolley 01636-892456

Other sources of info

Reference material is generally thin on the ground, but Peter Prags £19.50 Rural Diversification (01444 445335) gives a good grounding in the marketing/planning/financial/ legal/tax aspects.

Also try the SACs Diversifica-tion Database on, click on SEARCH, then key in DIVERSIFICATION.

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