Farmers need to diversify to survive, says NFU Mutual

BREXIT: ‘Ever-increasing need to look at new ways to increase our businesses’

More than a quarter of Scotland’s farmers plan to diversify to survive after Brexit, according to a new report from NFU Mutual.

Investing in some form of renewable energy is the top diversification choice for producers, accounting for 34% of post-Brexit plans, ahead of property letting on 17% and holiday accommodation on 8.5%.

When asked why they were considering such options, 62% of those surveyed said their main driver was to boost farm income. Other popular reasons included providing a new business opportunity for a partner or other family member (26%), utilising redundant farm buildings or unproductive land (20%) or providing a short-term income (9%).

NFU Mutual Board member and former NFU Scotland president Jim McLaren said: “With declining direct support for many farms on the horizon it’s essential to examine the opportunities available from diversified income streams.”

Current NFUS president Andrew McCornick agreed: “There’s an everincreasing need for farmers to look at new and novel ways to improve their businesses. Today in these uncertain times standing still is not an option, you are holding yourself, and the industry back.

“In our own business we have done renewables, solar and heat pumps primarily. Our attempt to get wind turbines was thwarted by planning. We also had surplus housing to draw in some steady money.”

Admitting that his own diversification projects were all ‘easy wins’, Mr McCornick added that he was probably ‘short on imagination’ compared to his near neighbours whose ventures include a farm park, ice cream making from their own milk, wood processing, biomass and contracting.

“Scotland’s farmers are facing their greatest challenge for generations, so we are working hard to help them make informed choices,” said Chris Walsh, NFU Mutual farm insurance manager.

While commenting that farmers in general are ‘incredibly resourceful’, Mr Walsh warned that for many producers, setting up a non-farming business is a step into the unknown, a challenge the new report was designed to address.

For example, although 89% of already diversified farmers’ told the survey team that their schemes had a positive effect on the farm business, they also highlighted a number of challenges attached running an alternative enterprise.

These included lack of time (22%); red tape (18%); unreliable broadband (15%) and cash flow (15%).

Renewable energy is the top diversification choice for producers, accounting for 34% of post-Brexit plans.