What can farmers expect to gain from diversification?16/09/19
At the time of writing, the UK agriculture industry faces interesting and possibly challenging times. Brexit is still hanging over us all with possibilities of a deal with Europe, crashing out on 31st October with no deal or even a second referendum. Undoubtedly, knowing which way we are heading would help rural businesses make decisions about what they need to do to future-proof their trading operations.
What is certain is that agricultural property provides considerable opportunity. In the long term, land tends to hold its value or sees steady sustained growth, while other property types fluctuate. For this reason, lenders like to hold land as security and it may be possible to borrow money against land to finance a variety of alternative uses.
Location is everything
When considering rural diversification, location is everything. For example, the most successful commercial conversions for offices tend to follow the main highways, where visibility and access is good. Conversely, rural tourism tends to be most successful in more isolated, rural locations.
In terms of planning policy, every local authority has its own planning framework but generally rural diversification is actively supported and encouraged. There is increasing recognition that being outdoors and getting close to nature is good for us and more and more people are taking their holidays in the UK.
Even the most modest of buildings sometimes overlooked may have potential. For example, a small barn nearby was recently granted planning permission to convert into a two bedroomed dwelling - it can be retained and rented out or holiday let or sold to release capital to finance other projects. Another local example of farm diversification is a log cabin development in north Shropshire, utilising a previously unused area of woodland.
In some cases, grant assistance may be available, for example under the LEADER scheme which can help with support for micro and small businesses and farm diversification, which boost rural tourism, increase farm productivity, increase forestry productivity and provide rural services, as well as cultural and heritage activities.
Talk to the Forge team to find out how we can help you plan a diversification project.