Farmers across the UK are showing their entrepreneurial spirit, as they diversify traditional arable, dairy or livestock farming to increase or supplement their income. This is according to new research from wealth manager Investec Wealth & Investment (UK), with 100 freehold farmers across the UK.
All farmers surveyed said they were currently using at least some of their land in non-traditional ways.
The most popular initiative is increasing biodiversity through increased tree planting or carbon capture (66% of farmers surveyed said they are doing this) followed by starting to make new products to sell, such as cheese (43%) and trying out Community Supported Agriculture, where customers subscribe to receive regular deliveries of fresh produce or other farm products (38%). Other new revenue streams include starting to attend farmers’ markets (35%), offering a tourist attraction such as holiday cottages or glamping facilities (25%) or starting to farm new livestock (24%).
The research by Investec Wealth & Investment (UK) reveals that eight in 10 (80%) farmers surveyed say that current market dynamics have pressurised them into considering these alternatives farming activities.
Investec says that it appears their entrepreneurial spirit is proving lucrative, with green initiatives in particular not only being environmentally friendly but financially sound too.
Of the farmers surveyed who say they’ve started using their land for increased biodiversity through tree planting or carbon capture (66%) around seven in 10 (68%) of these say it makes up between 15% and 20% of their farm’s annual income. More than one in 10 (12%) say it makes up between 10% and 15% of their farm’s annual income and one in twenty (20%) say the figure is up to 10%.
Similarly, of the farmers surveyed who say they’ve started using their land for renewable energy, such as solar panels (17%), more than one in 10 (12%) say it contributes to between 15% and 20% of their farm’s annual income and 77% say it contributes between 10% and 15%. Over one in 10 (12%) say the figure is between 5% and 10%.
Those farmers running tourist activities such as a holiday cottage or glamping (25%), and making new products to sell, such as cheese (43%), reported a broader range of incomes from these activities. Of those running tourist activities, 16% said this generated over 20% of their farm’s annual income and 24% said this was only up to 5%. Of those making new products, 26% said this generated between 15% and 20% of their farm’s annual income while 30% said this generated between 5% and 10%.
The majority of farmers surveyed have been running these new enterprises for at least two years or more, and say they’ve experienced an improvement in their farm’s income during this time. Over a quarter (28%) say their farm’s income has increased slightly over the past two years, and a further quarter (26%) say it’s increased dramatically. More than a third (36%) say their income has stayed the same over the past two years. Only 8% say it’s fallen slightly, and 2% say it’s fallen dramatically.
Scott Jones, Divisional Director, Southern Offices at Investec Wealth & Investment (UK), said, “Our survey shows that some farmers are having to diversify away – at least in part – from traditional arable, dairy and livestock farming.
“Many feel that they are being led to these new enterprises because of the current market dynamics, but that they are also proving to be economically attractive. There doesn’t appear to be a one-size-fits-all approach to diversification with farmers showing their entrepreneurial spirit to try out a whole host of new ways to use their land, from carbon capture, to glamping, making new products or even contract farming with local supply chains.
“Whichever route farmers and landowners decide to take, we can help to navigate this journey whilst protecting and building assets and wealth along the way, for today and for future generations to come.”
Investec Wealth & Investment (UK), is for the third year running, the official Wealth Management Partner for The Game Fair. This is the UK’s largest countryside show, taking place at Blenheim Palace from 26th to 28th July 2024.