The diversification dilemma

Sound absurd? Welcome to the UK government’s latest "solution" for farming - diversification.

At the 2025 Oxford Farming Conference, Secretary of State for Environment, Food and Rural Affairs, Steve Reed, unveiled what he described as “the most forward-looking plan for farming in our country’s history”. Forward-looking, maybe. Realistic? That’s debatable.

Reed’s grand vision includes a hefty push for farmers to embrace diversification, effectively asking them to turn their fields into multi-use spaces for everything from glamping sites to renewable energy projects.

However, lets get one thing straight, diversification isn’t a magic wand that fixes the deep-seated issues plaguing agriculture. In fact, the government’s newfound obsession with side hustles feels like an admission of failure rather than a vision for the future.

The Secretary of State said: “To stay viable in an increasingly uncertain world, you must profit from other activities.” Basically, this is a roundabout way of saying growing food isn’t profitable, so farmers need to branch out.

This statement raises a glaring question: why isn’t food production profitable? Why are farmers expected to moonlight as hospitality moguls just to make ends meet? Especially when the nutritious food they are producing is critical not only for our health and well-being, but ultimately, our survival.

The reality is that diversifying a farm business isn’t as straightforward as it sounds and it’s not doable for every farm family. For starters, farmers are already stretched thin, juggling the demands of food production with environmental regulations, rising costs, and volatile markets. Now add planning permissions, business rates, and inheritance tax headaches to the mix. It’s not just a side hustle, it’s a logistical minefield.

Let’s address the elephant in the room - not everyone can diversify successfully. The government’s approach seems to assume there’s unlimited demand for glamping pods, storage sheds and farm shops. But what happens when every village has half a dozen of each? Oversaturation kills the market and with the economy on shaky ground, where’s the consumer demand for these ventures going to come from?

Diversification, when done right, can enhance a farming business but it should never be the crutch that props up an unprofitable core enterprise. Farming should stand on its own two feet. If it doesn’t, we’re not producing food profitably; we’re subsidising it with private cash.

Here’s the crux of the issue: instead of tackling the root causes of the farming crisis, low food prices, unfair supply chains and excessive regulation, the government is pushing farmers towards diversification as a ‘sticking plaster’ solution. This doesn’t fix the system, it sidesteps the problem entirely.

Raising food prices to reflect the true cost of production would help make farming viable, but that’s a political minefield. Food poverty is a real and urgent issue, but let’s not kid ourselves, cheap food benefits corporations far more than it benefits struggling families. The current system props up big business while squeezing farmers dry and yet, instead of addressing this inequity, the government tells farmers to “get creative.”

Even for those who embrace diversification, the financial risks are enormous. Building a diversification project often increases the value of a farm’s assets - great for the balance sheet, but potentially disastrous when the taxman comes knocking. Proposed changes to Agricultural Property Relief and Business Property Relief could strip away vital protections, leaving farmers facing crippling inheritance tax bills.

Why would anyone take on a risky venture that could be wiped out by the Treasury when they “pop their clogs?” Without reforming these tax policies, diversification becomes a trap, not a lifeline.​​​​​​​

Diversification can be a valuable tool, but it’s not the silver bullet the government seems to think it is. Asking farmers to juggle side hustles while still feeding the nation is not what is needed. What farming really needs is a system that values food production as the essential, life-sustaining activity that it is.

So, by all means, diversify if it enhances your business but let’s stop pretending that side hustles are the answer to a fundamentally broken system. Farmers don’t need more pipe dreams, they need a government willing to tackle the root problems head-on.