According to Government figures, 62% of British farmers are having to diversify alongside running a traditional working farm.
It is not surprising, therefore that many farmers look for different ways to supplement their income. Especially given volatile food and livestock prices increased energy costs and unpredictable weather conditions that can play havoc with production.
Often this may involve separate paid employment off-farm or putting empty sheds to use by providing livestock housing for other cattle farmers. However, for many farming businesses, it can involve a more holistic and wide-ranging approach to their business. Such as assessing what activities can be maximised and where change can be implemented to increase profitability.
Several businesses have diversified into fabrication workshops or holiday lets on-farm, whilst others have introduced farm shops or butchery facilities to provide additional income streams. The desire to reduce both food miles and carbon footprint has become an increasingly important consideration to which many farm producers are able to respond to positively.
For one of Bruce Stevenson’s clients, diversification has meant involvement with Business Gateway and Scottish Enterprise in order to secure expert opinion and support. This farmer in question already had some commercial property rentals, an agricultural contracting business and had started to diversify into Christmas Tree contracting. By working closely with tree growers, this element of their work has expanded from one man, loading lorries in 2010, to forty seasonal staff in 2019.
As a result, this business provides local employment to other farmers, at a time of year when the agricultural industry is generally less intensive. Additionally, 50% of the temporary labour comes from the EU and this brings its own challenges including Health & Safety, where English is not their first language, temporary accommodation requirements and for the employer farmer, Gang Master Licensing.
This last issue was overcome by using an external labour provider, with the necessary registrations and contacts. This engagement also helped with Health & Safety issues as they also provide translators for the workforce and support their general welfare. As the farmer’s insurers, we also were on hand to assist with Risk Management planning and assessments.
Having established that there was no suitable accommodation that was both affordable and within a reasonable travelling distance from the plantations, the client set about converting an unused steading into Bunkhouse accommodation. This meant that the workers were on site and had a better work/life balance during the season.
The farmer not only provided additional work to the local community but by having the workers stay on-farm, there was further opportunity for the local economy to benefit as food and fuel was purchased within the vicinity. Outside of the tree-harvest period, this farm now has four full-time employees, carrying out work in the tree plantations; mulching spent vegetation, providing ground preparation for new saplings, ensuring field drainage is suitable for optimum growing conditions and deploying crop spraying treatments.
By investing in the equipment for these tasks, he has also been able to promote these to other tree growers in the area and is also maximising their use within the wider farming community.
In addition to their regular agricultural contracting work that has increased over the last decade, this client has embraced fresh thinking and new technology to deliver a first-class product to the market. As agricultural businesses look to reduce the reliance on EU support and also provide a regular and sustainable income to their farm, diversification would appear to be key to future-proofing success.
If you have any queries regarding Farm insurance please get in with us here.
Why Farmers Aren't Just Farming