Identifying other income streams
Diversification isn’t for everyone – and committing to a new enterprise without wanting to, or knowing how to, is a complete no-go. But identifying other income streams could be essential for some sheep farming enterprises as support payments reduce. A project might be short-term while system changes take effect or long-term if it’s right for the farm and the people involved. In any scenario, diversification options will vary between businesses and need to fit with the resources available.
Margaret Dalton, Ceredigion, Wales
My husband and I bought the farm here in Llangybi back in 1963, running sheep, sucklers and poultry on 200 acres. After my husband sadly passed, my sons David and John joined me in running the business, with John working closely with me on the day to day work, and David focusing more on the farm accounts and records.
Farms these days seem to make less and less money on traditional farming practices, and we wanted to do something to strengthen the business for the future and ensure there was a strong business there to support the loyal workforce we have and futureproof the business for when my grandchildren get older and want to take on the farm themselves.
We came up with the idea to add an anaerobic digester to the farm, which required some changes to how we worked. We feed the AD plant and in return it produces electricity that we can sell to the grid at a contracted price, therefore giving us a guaranteed return for the next 15 years. All we have to do is keep our input costs under control – and this is proving a challenge!
We have recently bought some land that came up for sale next door. You don't get these chances very often so felt we needed to invest in the opportunity, so we now have more space to grow what crops we need. We are fully self-sufficient with the AD plant. We cut back on sheep as we needed more cattle to generate slurry that we can feed the digester.
We also feed the AD plant crops and what comes out is a dried, compost-like substance which we use for bedding and cuts down our straw consumption. This then goes back into the digester with the slurry and generates power.
We have had a really difficult time with the digester, with a total catastrophic structural failure occurring in 2017. Fortunately this was insured, and work was done to replace our lambing shed and a new digester put in.
Now that is sorted we are hopeful that we can start to see some benefits from all the investment but, as with many diversification schemes, the promises you are sold do not always work out in reality. However, we are confident that energy is one commodity that is going to grow in demand and are hopeful we will start to see the benefits soon. As with any new business it is a long-term process, but it is vital that you don't take your eye off the main enterprise.
Diversification in one way or another is present on most farms. Be it through someone working elsewhere alongside the farm, AD plants, turbines, holiday lets or anything else, most farmers are having to find ways to supplement their income.
I would advise anyone considering a new diversification to think about it carefully, plan carefully and go into whatever it is you do with your eyes wide open. But crucially, don’t be afraid to have a go.
- Farm diversification guide from the Campaign to Protect Rural England (CPRE)
- Farm diversification guide from Scotland’s Rural College (SRUC)
- Farm diversification guide from NI Business Info: advantages of diversification and information on diversification options
- Farm diversification report from NFU
- Farmers Weekly article on farm diversification performance (based on December 2011 survey results)
- Farmers Weekly ‘Know How’ page on farm diversification
- Gov.UK report on business opportunities for farmers in industrial energy and non-food crops
- Woodland Trust’s guide to trees as a farm diversification option
- Planning permission information for diversification: From Gov.UK and for Northern Ireland
- There is a Farm Business and Innovation event held every November at the NEC, Birmingham. More here.
Enjoy in the comfort of your own home or listen-on-the-go as Kate Russell of the Central Association of Agricultural Valuers (CAAV) gives her top diversification tips, including pitfalls to avoid. Kate is an integral part of the CAAV team, specialising (amongst other things) in planning and development.