Using diversification to elevate your farming business

“Diversification is something that happens after the core part of the business has been locked down,” says Simon Haley. “If there is some spare capacity, whether that’s cash, thinking time or personnel, then there is a diversification opportunity.”

And this opportunity doesn’t have to be completely different from the core farming enterprise explains Simon. It could be as simple as adding a second livestock species or using agri-environmental schemes to explore different land uses. 

“Diversification is a way of you being much cleverer with assets across the farm. Natural, physical or financial and getting more bang for your buck, being more efficient with what you've currently got.”

For any farm business thinking about diversification, Simon would advise looking at what skills you have within the business and how you could use them to drive things forward. “Is there spare capacity in the business? Could you look at a diversification of time? Or could you consider doing some CPD to improve a skill?

“Business is just busyness for some people. The idea that if I’m busy I must be productive and therefore viable, just doesn’t work sometimes. Strive for your business to be constantly innovating, otherwise you risk standing still.”

Top tips for farmers looking to diversify:
·       Nail down the core farm business first and don’t let diversification be a distraction. A diversification is more likely to be a success if you understand your business.

·       Diversification can come in different forms. It can be hitting an alternative market by doing something completely different, or it can be doing what you do on farm but slightly differently. Either way, always make sure it's a way of using spare capacity.

·       Don’t leap straight in without a plan. Sit down and work through numbers, even if it’s just on the back of an envelope. Talk to people in your network, and once you have an idea developed, go out and seek some advice.

·       Make use of advice and support. For example, Defra blogs can give you early notification of grant and scheme windows opening, including links to webinar recordings. 

·       Be passionate about what you hope to do but don’t lose focus or be distracted by fads. 

·       Remain practical and do not underestimate how much time, money and energy will need to go into a farm diversification to make it a success. 

Collaboration kick starts successful diversification
Rob Addicott and Jeremy Padfield live on neighbouring farms in Somerset where they decided to focus on their arable enterprises together several years ago. They have worked together ever since, creating a profitable contracting business.

“Our partnership started from a practical solution. We both needed a new combine, so we decided to buy one between us,” says Jeremy.

“By working together, we have been able to invest in newer, more high-tech equipment and this has allowed us to take on additional areas of contracting. It's worked well for us because we just did a machine at a time.”

Jeremy explains their success comes down to mutual respect and a clear understanding of what each partner provides. Recognising the skills of those in your business as well as the assets available on farm and how they could be used differently, is also important.  

For those considering a farm diversification, Rob advises researching options carefully: “You need interest to sustain a diversification, so pick carefully. Have a look around other businesses and go to shows or events to see what floats your boat. Think about making the most of where you’re based and try to do something different from others around you.”

For more on successful diversification, Phil Heard and Mark Rees told Farming Focus™ in a subsequent episode how diversifying needs to complement not compete. 

Listen to the full episode and bonus below - also available via Spotify and Apple Podcasts.

About our guests

Simon Haley is a rural business advisor, managing his own company of independent advisors, SRH Agribusiness Ltd. He is a member of the Society of Agriculture and a member of the CAAV Farming & Business Technical Committee.

Rob Addicott & Jeremy Padfield operate Stratton Farms in Somerset on Duchy of Cornwall tenancies. They run a joint arable enterprise and contracting business with additional  diversifications suited to the individual assets of each farm – offices on one and a livery on the other.