Northern Ireland’s farmers turn to diversification to support incomes after Brexit

With changes to government support for agriculture and the way Britain trades with the rest of the world ahead, Northern Ireland 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, recreation, 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 new report, NFU Mutual provides advice on setting up new diversification businesses and looks at a range of successful schemes from wedding venues and glamping to kefir dairy products and cosmetics.

Many of Northern Ireland’s farms are making the most of the tourism and retail opportunities. NFU Mutual’s report highlights Co Antrim’s The Present Tree, an online retail enterprise run by Catherine Cunningham.

Catherine, who runs a 13th generation family sheep farm in the heart of Co Antrim with her husband Andrew, set up The Present Tree in 2013. An online shop specialising in beautifully-wrapped tree gifts, Catherine came up with the idea after going on a business course run by Northern Ireland’s Department of Agriculture, Environment and Rural Affairs (DAERA).

“I learned lots about running a business and decided to combine my passion for trees with my love of beautiful design,” she said.

“Listening to our customers has been integral to our success. We want our customers to have a great online experience, just as if they are walking into a real shop.”

From its low-cost start, with an investment of £5,000, The Present Tree has now sold over 50,000 tree gifts and has ambitious plans for the future.

Martin Malone, NFU Mutual Northern Ireland Manager said: “Northern Ireland’s farmers are looking for new business opportunities in order to spread their risk as we adapt to trading outside the EU and with major changes to government support for agriculture on their way.

“Northern Ireland’s farmers have always had to adapt to changing times, and a number have been diversifying for decades. But even more are seeking ways now to support their agricultural work with new ideas and protect their farms for present and future generations.

“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 farmers are either looking into setting up new businesses on their land or expanding existing diversification ideas, with a quarter planning to diversify in order to create business opportunities for family members.

“However, farmers need to do careful research and costings before they start converting cow sheds into cafes.”

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.

NFU Mutual’s report together with a series of podcasts, including the Present Tree, have been produced to help farmers considering diversification. Visit nfumutual.co.uk/diversification NFU Mutual advice for farmers considering diversification

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.