Farmers not ready for withdrawal of support

Some 36 per cent of farm income depends on the Basic Payment Scheme, but one in three farmers are yet to start preparing for its withdrawal according to a survey for Farmers Weekly.   79 per cent of farmers have no clear idea how their farm business will survive without it.   Lowland livestock enterprises are particularly reliant on the basic payment.

Just 15 per cent of farmers say they are interested in taking a lump sum to retire from farming.

53 per cent of farm businesses say they have already diversified.   Of these 51 per cent have a renewable energy scheme, including solar panels (76 per cent), biomass boilers (26 per cent), wind power (22 per cent) and anaerobic digestion (7 per cent).

The next most popular diversification is holiday accommodation (24 per cent), followed by offices and workspace (10 per cent), leisure activities (7 per cent) and farm shops, cafés and restaurants (5 per cent).

The answer no longer lies in the soil

NFU Mutual have produced an excellent report on diversification activity by UK farmers. What is clear is that one response to the phasing out of subsidies is an increase in diversification activity: Diversification

A note of caution is necessary. Much of the low hanging fruit has already been taken. Diversification requires a different skill set from farming and often considerable capital, so risks need to be carefully assessed.

NFU Mutual's Chris Walsh told Farmers Weekly:'There is only room for a certain number of farm shops, holiday cottages and wedding venues, so farmers planning to diversify need to do careful research and costings before they start converting cow sheds into cafes.'

Some of the traditional favourites such as on farm holiday lets are seeing a fall off in income as customers favour long weekend breaks over weekend stays. Mind you, one can adapt to this by offering luxury accommodation for large family get togethers, having shelled out a four figure sum this morning.

Perhaps most worrying is that the sector most under threat by market trends as well as subsidy withdrawal is livestock farming in challenging locations which often offer fewer diversification opportunities. Forestry is one that may be available.

Defra statistics show that diversification generated £740m of income in 2018/19, up six per cent on the previous year.