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Farming

Farm diversification more difficult in Wales

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Diversification: Upland farming makes task difficult

ALMOST half of UK farmers are planning to pursue diversified income streams to support their agricultural businesses, according to new research from leading rural insurer NFU Mutual.
With changes to Government support and the way Britain trades with the rest of the world ahead, farmers are diversifying their businesses to boost profitability and fortify their farms for the future.
Forty-eight per cent of farmers are planning to set up or expand diversification businesses following Brexit, moving into new areas such as tourism, hospitality, retail and renewable energy.
This figure has doubled since NFU Mutual carried out similar research in 2018 and found 23 per cent of farmers were planning to expand or start diversification enterprises.
The sharp increase in diversification comes as agriculture undergoes the biggest change to funding in decades following the UK’s exit from the European Union.
In a report published on Friday (Feb 7) NFU Mutual provides advice on setting up new diversification businesses and looks at case studies of successful schemes from wedding venues and glamping to kefir dairy products and cosmetics.
“The next seven years will be crucial for the farming industry,” explained Chris Walsh, NFU Mutual’s Farm Specialist. “Because of this, many farmers are looking at new business opportunities to spread their risk.
“Farmers have always had to adapt to changing times, and a number have been diversifying for decades. But even more are now deciding to support their agricultural work with new ideas.
“Whether it’s building holiday cottages, launching a wedding venue, or opening a farm shop, not only can these new businesses supplement the existing farm, they often provide other members of the family with a crucial role in the business.
“Our research shows nearly half of UK farmers are either looking into setting up new businesses on their land or expanding existing diversification ideas, with a quarter planning to diversify to create business opportunities for family members.
“There is only room for a certain number of farm shops, holiday cottages and wedding venues so farmers planning to diversify need to do careful research and costings before they start converting cow sheds into cafes.
“Farmers and their families also need to have the right skills – particularly if they’re going to be working with the public. It’s a big change looking after a demanding wedding party if you’re used to being on a hillside with a flock of sheep all day.”
The report stresses the importance of detailed planning to minimise risks to the public and employees and make insurance of new diversification schemes straightforward. It also highlights the importance of looking at the financial implications of setting up non-farming activities to avoid higher Inheritance Tax Bills.
Looking ahead, the report suggests there may be new opportunities for farmers to access Government financial support for diversification schemes as changes to agricultural support are rolled out.
DEFRA statistics show that diversification activity brought in £740m of income in 2018/19 – up 6% on the previous year.
NFU Mutual’s report, together with a series of videos and podcasts produced to help farmers considering diversification, is now available to download at nfumutual.co.uk/diversification
NFU MUTUAL DIVERSIFICATION ADVICE
Diversification means using your farm’s assets, such as its land, buildings or machinery to develop a new business activity. Diversification ventures usually set out to provide additional revenue and can complement the agricultural activity or may even, over time, replace it.
Before you start, consider:
• Do you have the skills, resources and commitment to make it work or would it be a distraction from the core farm business?
• Have you fully reviewed your farm business and identified strengths and areas where you can add value to your existing model?
• What are your assets – from people, land, location, buildings, finance to skills – and have you realised their full potential?
• What market and demand is there for your diversification venture?
• What makes your farm unique and sets you apart from the competition?
• Have you asked the experts for advice? For example, speak to insurers at the planning stage to ensure you understand the risks and have the right level of cover to meet your needs.
DIVERSIFICATION TOUGHER IN WALES
Farming businesses in Wales face many hurdles, such as poor upland land quality, and remoteness from centres of population. These factors severely restrict business resilience and diversification.
Improving farm efficiency, developing non-food and non-crop revenues, participation in agri-environmental schemes, or access to rural development funding and business support, are more difficult in Wales than elsewhere.
When compared with England, Welsh farms are also smaller and less well resourced and receive an average of £3,300 less in funding.
Although diversification on Welsh farms has grown over the past decade, diversification revenues on Welsh farms represented on average only 3.4% of total farm revenues in 2017, compared to an average of 7.7% in England.
That suggests reliance on increased farm diversification to build resilience in Wales remains an optimistic strategy. In the worst-case post-Brexit scenario diversification revenues might need to increase up to tenfold to replace other lost revenues.
Farms in Wales depend on income streams separate from the main farming business.
A range of actions might support the continued growth in diversified income. However, although they could help deliver wider social and environmental public goods, they might not support farming, community identity or build economically sustainable farm businesses.
Welsh Government policy might want to pull in one direction but reality suggests that its goals will be far harder to achieve than sunny optimism and glib soundbites suggest.

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Farming

Government won’t be able to blame Brussels

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BREXIT could have British farmers reap the benefits of international trade thanks to a leading British product, National Farmers Union vice-president Stuart Roberts suggested.

Brexit could help British farmers take on a leading role on the world stage thanks to great dairy and meat products created in the country, according to Mr Roberts. Asked whether leaving the EU could benefit the farming industry, the National Farming Union (NFU) vice-president insisted Brexit will offer the UK more freedom to trade with the rest of the world.

Speaking to talkRADIO, Mr Roberts said: “There are several benefits. If we talk about trade, there are certain parts of the world where I think we can have some real positive trade deals.

“Our dairy products, for example, are ones that we can lead the world on, we can add value to.
“When you look at our sustainable meat production in this country, people are crying out for this around the world. I think there are some opportunities in trade.”

The NFU vice-president also suggested leaving the European Union will grant the UK to have full control over farming regulations in the future.

Mr Roberts also said Brexit will force British politicians to be more “accountable” for the decisions they will take in the coming years.

He continued: “There are also opportunities in terms of the regulatory environment.
“We are now, at least, in a position where the politicians in this country will make the decisions and be responsible for it.

“They can’t blame someone else, they can’t pass the buck. In every aspect of society, probably for all of us, it was convenient to blame Brussels for things.

“Going forward people are going to have to be more accountable.”

The UK will no longer abide by the Common Agricultural Policy (CAP) at the end of the transition period scheduled to conclude on December 31, 2020.

in December 2019, former Chancellor Sajid Javid announced farmers could enter the new year with confidence that they will be able to “thrive” after Brexit after he confirmed just under £3 billion of funding for 2020.
The cash – to be spread over two years – will be used to support farmers once all Brexit phases have concluded and the CAP direct payments scheme ends next year.

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Farming

Young hill farmer stars in £250,000 campaign

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AN ACCOMPLISHED young farmer from the Ceiriog valley is starring in a nation-wide campaign promoting PGI Welsh Lamb and Welsh Beef.

Caryl Hughes, who farms in partnership with her family near Llanarmon Dyffryn Ceiriog, features in Hybu Cig Cymru – Meat Promotion Wales (HCC)’s latest campaign.

The £250,000 campaign was announced in November 2019 by HCC Chair Kevin Roberts at the annual HCC Conference and will focus on Welsh red meat’s sustainable qualities. The campaign will include radio and tv advertising, on-demand tv advertising, print advertising and media partnerships. It will also feature core messages around Wales’ sustainable red meat production focusing on elements such as – landscape, climate and water usage.

The television advert sees Caryl at home on her farm in Ceiriog valley and displays the dramatic landscapes and natural surroundings where Caryl rears her own flock.

Caryl is a familiar face within Welsh agriculture; having previously held the role of National Sheep Association Young Ambassador and Montgomery YFC Chair.

Caryl has a degree in Agriculture from Aberystwyth University and, notably, was the first person to undertake the Llyndy Isaf Scholarship with the National Trust – where she managed a Snowdonia hill farm for a year combining sustainable farming practices with managing the outstanding natural environment.

Having also competed on S4C’s Fferm Factor, Caryl is also someone comfortable both on film and in the field.
Commenting on the campaign, Caryl said ‘Like most Welsh sheep and beef farmers, I am very proud of our industry, the food we produce and how we produce it. I’m very pleased to be involved in this campaign promoting exactly that.’

HCC’s Market Development Manager Rhys Llywelyn commented ‘We wanted the real, authentic voices of Welsh farming to star in this campaign to show the real picture of Welsh red meat production.’

‘Caryl’s knowledge, passion and experience are undeniable and she is a very credible ambassador for our industry and produce. We’re sure viewers and consumers at home will find Caryl very relatable and engaging in this advert’
HCC’s new campaign launched on Thursday, February 13, and can be seen and heard on on-demand television platforms and radio stations throughout England and Wales.

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Farming

FUW reminds members about SAF

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IT’s that time of year again when we start thinking about Single Application Forms (SAF).

The application window opens on Monday, March 2, and the Farmers’ Union of Wales is reminding its members that county staff are here to help and ready to take the stress of filling the form away from you.

The FUW provides this service exclusively to all paid-up members as part of their membership package, which has proved invaluable for thousands of members over the years – saving them time and a paperwork-headache.

FUW Membership and Operations Manager Caryl Roberts said: “The SAF completion process is probably the single most important form completion exercise being carried out by Welsh farmers since 2004, and the financial repercussions of errors on the forms are severe.

“Our staff are not only well trained but very well practised in dealing with the complex application process.”
Since the Welsh Government mandated that all applications should be done online, the FUW is focused on providing the best possible service to its members.

“I encourage our members and first-time form fillers to contact their local office as soon as possible to book an appointment if they need help in filling out the form,” added Caryl Roberts.

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