Farmers – ever thought about diversifying?
Diversification has many different forms and can be on as small or large a scale as you choose. Often providing an income spread more evenly throughout the year than traditional arable farming.
Take property rental, for example. It’s something many farmers do and it often makes good use of empty buildings and cottages. The income is nicely spread throughout the year and what’s more, if you can find a good tenant then income can be assured and expenses are often low.
For the more adventurous of you, diversification could, for example, be setting up tourism activities – a camping and/or caravan site or 'glamping' site, an outdoor off-road activity centre, or opening up parts of the farm for visitors.
These kinds of attractions, whilst often costly to set up, can be quite lucrative. Glamping sites, for example, often charge upwards of £75 a night off peak, and £120 a night during peak season and only require minimal facilities. If you have a small field with relatively good access, which isn’t producing crops well, then it could be a good solution.
For those wanting to stay true to their farming roots, there is always the option of organic farming or contract farming. Contract farming, again, can either be on a small or large scale. You may decide to invest in people and machines and set up a whole new contract farming enterprise, or it could simply be a case of utilising any spare capacity that your current workforce already has to undertake jobs for neighbouring farms.
With any new enterprise, taking timely advice is important. Getting the legal structure and agreements right, as well as planning and business rates considerations correct from the outset, is imperative. It would also be remiss of me not to mention tax! Understanding how the income is taxed, the impact on capital taxes, as well as VAT will make sure your new venture gets off on the right foot.
If this blog has given you food for thought, look out for next month’s blog where we discuss how to overcome some common pitfalls of farm diversification.
For more information on how we can help, please speak to your usual Larking Gowen contact.
Call 0330 024 0888 or email firstname.lastname@example.org
Sign up to receive the latest news from Larking Gowen