Farmers are increasingly looking for diversification ideas away from their core farming enterprises.
Barry Caslin, Energy and Rural Development Specialist at Teagasc, says this is due to growing uncertainty following Brexit and the government’s Climate Action Plan.
“Many don’t know if their farms are going to be viable for their sons and daughters into the future,” he told That’s Farming.
“Also, farmers are looking at protecting and isolating themselves from global commodity prices. Hence, they want to maximise the income from their assets.”
Furthermore, he says alternative farming options that are drawing interest include glamping, micro dairies and milk vending machines, and on-farm restaurants.
He notes that the focus on staycations in the last two years due to COVID has led to more farmers considering adding accommodation to their farming businesses.
Self-storage space on farms
Another compelling option that some farmers are looking into is making self-storage space available on their farms. This includes the conversion of redundant buildings, like beef and sheep sheds, and the use of shipping containers.
As far as food is concerned, farmers are also looking into value-added products, for instance, using their milk to make cheese or ice cream. Added to that, more farmers are selling these products directly, either online or through farmers markets.
Caslin also believes that the improvement of broadband in rural areas will lead to better opportunities for diversification in the future.
Considerations when diversifying
He lists some of the major questions to evaluate when contemplating the diversification move:
- Are you interested in diversifying, and if so, why? What is your motivation?
- If you have decided on a specific diversification path, what is the reason for your decision? Be careful not to get too stuck on one idea. Make sure you have looked into other options.
- How does it fit in with your existing farming enterprise? Does it complement your current operations, or is it something new? Diverting attention (and time) from your main business could be to its detriment.
- Who is your potential customer, and what do they want? How are you going to reach and influence them, i.e. how will you market to them?
Ultimately, much centres on doing proper and thorough research beforehand, which is something that is often neglected.
This will not only answer many of the pressing questions but also help in easing some of the pressure that involves making the diversification move.
Handy tips to consider
Other pointers when contemplating diversification:
- The diversified operation may involve a new set of skills that need to be learned either by yourself or someone else. Employing someone with the appropriate skills will, of course, impact the business’ cost.
- Ensure you have properly evaluated your competition and ensure that the market is not saturated.
- A proper and realistic business plan with carefully considered budgets, financial projections and targets must be set up.
- If the new venture involves dealing with customers, those that are in direct contact must have the proper people and social skills.
- Farming in Ireland is often a family business involving sons and daughters. Make sure the whole family is on board with all developments, how they will be involved and what is expected of them.
- Set deadlines for key actions and check that these are kept.
- Get the important people on your side. This may involve government agencies who need to give the necessary regulatory approvals or neighbours that have to give permissions. Other parties may include builders if construction needs to be done or the bank manager if financing is involved.
Teagasc has produced a comprehensive body of information to help those interested in diversifying.
This includes factsheets, webinar recordings and videos on various ideas and possible diversification options.
Additionally, Teagasc also offers their Options Programme, designed to provide new thinking to generate additional income for farmers.
The programme consists of a series of workshops covering a wide range of topics.
These workshops also involve input from guest farmers who have successfully diversified and other specialists.