Farming
Farm diversification more difficult in Wales
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.
Farming
Farmers raise concerns at west Wales hustings as Kurtz criticises Labour policy
Conservative candidate says farmers feel under pressure as parties battle over support, regulation and the future of Welsh agriculture
FARMERS from across the region raised concerns about rising costs, regulation and future support during an agricultural hustings in Aberaeron on Tuesday (Apr 14).
The event, jointly hosted by the Farmers’ Union of Wales, NFU Cymru and Ceredigion Young Farmers’ Clubs, brought together members of the farming community to question candidates on the challenges facing the sector ahead of the Senedd election.
Among those responding was Samuel Kurtz, Conservative candidate for Ceredigion Preseli Pembrokeshire, who said the mood in the room reflected growing frustration among farmers.
Mr Kurtz said: “The hustings made one thing very clear: farmers feel let down, ignored and under increasing pressure from Labour in Cardiff Bay and in Westminster.
“As the Shadow Minister for Rural Affairs, I have been warning for some time that the direction of travel is wrong. Farmers are being asked to do more and more with less and less support.
“Rising costs, burdensome regulation and uncertainty over future funding are placing real strain on farm businesses and family livelihoods.”
He said many in the industry were worried that current policies could undermine food production and place further strain on rural economies.
Mr Kurtz also raised concerns about long-term food security, saying farmers wanted stronger backing for domestic production and more confidence about the future.
He said: “Our farmers are the backbone of rural Wales. They produce our food, support local jobs and care for our countryside.
“But right now, too many feel that decisions by Labour, backed by Plaid Cymru and the Liberal Democrats, are being imposed on them rather than made with them.
“That has to change.”
The Welsh Conservatives say their proposals for the sector include an extra £100 million for the agriculture budget over the next Senedd term, placing food security and productivity at the heart of the Sustainable Farming Scheme, increasing the amount of Welsh food served in schools and hospitals, and moving away from an all-Wales NVZ policy in favour of a more targeted, catchment-based approach.
The party has also pledged to continue campaigning against the so-called family farm tax and to take stronger action on bovine TB in livestock and wildlife.
Mr Kurtz said: “We need a government that backs farmers, not one that creates barriers and uncertainty.
“We will continue to fight for a better deal for rural Wales and ensure that farmers’ voices are heard loud and clear.”
The hustings formed part of wider engagement with the agricultural sector during the election campaign, with farming remaining one of the key issues in rural parts of west Wales.
While Mr Kurtz used the event to attack Labour’s record in Cardiff Bay and Westminster, the discussion also reflected broader concern within the industry over funding, regulation and the future direction of farm policy in Wales.
Business
House plan for 25-acre Felindre Farchog farmland site
PLANS for a rural enterprise dwelling to support a Pembrokeshire horticultural business are being recommended for approval despite concerns from the local community council.
In an application recommended for approval at the April meeting of Pembrokeshire Coast National Park’s development management committee, Southern Roots Organics/Awen Organics, through agent Preseli Planning Ltd, seeks permission for a rural enterprise dwelling, track extension, and associated works at Eithin Farm, Felindre Farchog, near Nevern.
This application is being presented to the Development Management Committee as local community council Nevern has objected to the application raising material planning matters, contrary to the officer recommendation for approval.
An officer report says Eithin Farm comprises about 25 acres of agricultural land, with an additional seven acres to be rented by the applicants; the applicants running a horticultural business from the site, using multiple polytunnels and employing irrigation systems which require careful management.
The report says the business has been trading for over three years and can support a full-time worker, meeting criteria which addresses planning for sustainable rural communities. The proposal is said to meet these requirements, and the officer’s report confirms a genuine need for the dwelling.
Nevern, in its objection, said: “The living accommodation is supposed to be part of the business, it needs to be closer to the sheds, making the whole enterprise more aesthetically pleasing. The area designated for future seasonal agricultural workers would be an areas that would be more appropriate for a traditional cottage. A restriction on the house, a tied house needs to be considered.”
Objections to the plan have also been received from members of the public raising concerns including foul water disposal and the application “has nothing to do with the new current business”.
However, a number of representations have expressed support for the application. Issues raised include the benefit of applicants living on site, helping to reduce travel and carbon emissions, and confirming support for local, small-scale horticulture, and the contribution the business makes to the community.
The report says there is an identified need for a rural worker’s dwelling, especially due to the need to quickly respond to changes in crop conditions and potential failures in irrigation or ventilation systems.
It concludes: “The evidence submitted with this application, having been assessed by PCNPA’s Agricultural Advisors, is sufficient to demonstrate that an essential need exists for a rural enterprise dwelling, and that the proposal meets the tests set out in [policy].
“The siting and design of the dwelling are considered acceptable with no concerns in relation to landscape impact, amenity or biodiversity. Overall, the proposal is considered to be acceptable and a recommendation to grant permission is made.”
Farming
Pembrokeshire Mynachlogddu home’s 20 year planning breach
A CONDITION restricting a rural Pembrokeshire home to agricultural workers-only has been removed after its occupants lived in breach of that for some two decades.
In an application to Pembrokeshire Coast National Park, Richard Tadman and Rebecca Brinton, through agent Carver Knowles, sought a certificate of lawfulness for non-compliance of an agricultural/forestry occupancy condition for Brynmelyn, Mynachlogddu.
The condition restricting the occupancy was part of a consent for the farmhouse granted back in 1985.
An application for a certificate of lawfulness allows an applicant to stay at a development if they can provide proof of occupancy without any enforcement challenge over a prolonged period.
A supporting statement accompanying the application said evidence had been gathered to verify that since May 2006 the property has been occupied in breach of that condition, Ms Brinton purchasing the property that year, with Mr Tadman living there until 2022 and Ms Brinton continuing to do so.
When Mr Tadman was living at Brynmelyn he was self-employed as a mechanic, and Ms Brinton has not worked in agriculture or forestry, other than the couple keeping a few animals including chickens, ducks, turkeys, and pigs for a short period from 2008 until 2010 when the pigs had to be culled following a TB outbreak, the poultry succumbing to foxes.
The statement said council tax payment records to Pembrokeshire County Council showed the occupancy from 2006, adding that many of the previous owners apart from the original has not got an agricultural worker connection either,
An officer report recommending approval, which led to the issuing of a certificate of lawfulness, said: “The occupation of Brynmelyn of persons not employed in agriculture or forestry has been continuous for a period in excess of 10 years. It therefore represents a use unauthorised by the Town and Country Planning Act 1990.
“The use of the dwelling exceeds the time limit for the Local Planning Authority to take any enforcement action, in accordance with Town and Country Planning Act 1990 (as amended) and / or the preceding Town and Country Planning Act 1971. This authority considers that a Lawful Development Certificate can be issued.”
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