Tag Archive: farm diversification
It’s been a tough winter for farmers across the region and Spring is proving challenging given the extreme weather conditions we’ve experienced. Although farmers can’t control such external factors, it does have quite an impact on their farm business – there will be less offspring to sell, potentially poorer crops and larger than usual feed and bedding bills. Consequently, the income of farms across the North will be affected, and it’s important farmers plan appropriately for this, to help sustain the farm.
Cashflow management is critical during testing times and one way to help ensure a consistent and reliable income is by providing alternative revenue streams, such as contract management. This doesn’t just apply to arable farms. We have seen a dramatic increase in the number of livestock contract management agreements being offered, notably the influx of pigs being brought in to Northumberland, as well as cattle rearing agreements, or something outside of the box; there are numerous ways contract management can benefit businesses. These are prime examples of how smaller scale farmers, with limited capital to diversify can achieve mixed farming practices and increase their farming enterprises, or even larger farmers looking at expanding once again.
Diversification also presents a huge opportunity to farmers to increase their cash generation from alternative revenue streams. This could be due to the older generation looking to retire from the farm business and aren’t able to as they rely on the farm’s income. This can put a large burden on the business and its cash availability. There are numerous ways farmers can diversify to, again, spread their enterprises and income streams to compensate for this, whether it be other agricultural enterprises, tourism or a non-farming option. It can all contribute to the greater goal of farm sustainability and cash availability throughout the year.
The same can be said for the younger generation when sons and daughters return home and are looking to be involved in the business. An alternative enterprise or diversification can be the answer. This can then help them to build up something for themselves, and give them a form of responsibility which so many desire.
George F. White works with farmers across the region, advising and supporting them through many different types of income alternatives, whether this be contract farming/management options or diversification projects; including tourism, energy efficiency and farm productivity. We are experienced in guiding farmers through each step of the process, managing the different aspects involved in setting up a new enterprise, including grant support where available. We also provide support in planning applications or cashflow management, if required. Whichever way you’d like to diversify, we’re here to advise and support you on and through the establishment of an alternative revenue stream that will sustain and support the main farm business.
To discuss why diversification might be the right option for you and your farm business, please contact James Oliver on email@example.com/01665 511 982 or any of the GFW Farm Team.
The UK farming sector is currently experiencing a great period of uncertainty, with market prices volatile against a backdrop of political discussions as we move to exit the European Union. Farmers are working harder than ever, and worried about their future and how economic and political factors will impact their business. We look into a client case study to determine how farm diversification can benefit UK farmers.
“Sustainability is the fundamental goal for all farmers currently”, explains Pip Robson, who owns an arable farm in Chathill, Alnwick with over 1,000 acres and a herd of 80 Aberdeen Angus suckler cows. Alongside the main farm business, Pip also runs a large arable and groundworks contracting business. “There is so much market instability now with beef and grain sales, and I realised just how dependent my business is on external changes outside of my control, especially farm subsidy payments. I needed another enterprise that would increase profitability and, crucially, sustainability as well as help to support an increase in employment in the local area.”
Pip’s enterprise brainwave was to install a straw pelleting plant at the farm. “The idea was to increase the value of a bi product from the arable enterprise; straw,” said Pip. “The processing line works by initially chopping the straw before shredding it further through a hammer mill. This grinds the straw into the required length for pelletising. The straw then goes through a filtration system to remove dust to leave the product completely dust free. The straw then goes through the pelletiser, before being bagged into 500kg or 15kg bags. Predominately, the pellets are marketed for horse and pet bedding, but can also be used for bio-fuel as an alternative to wood pellets.”
To get his new idea off the ground, and diversify his main farm business successfully, Pip worked with land, property and business consultancy George F. White who supported him through the entire process, step-by-step. “Pip came to us with a great idea to diversify his current farm business and we were able to help him in a number of ways. Firstly, we helped Pip secure grant funding. By managing the application process for grant funding from start to finish, which included creating a business plan for Pip, including costings to deliver the project and detailed market research, we were able to secure 40% grant funding for the project from the Government’s LEADER scheme. This also allowed us to assist in approaching his bank for the additional funds required.”
George F. White was very hands on throughout the whole project, preparing necessary budgets and cash flow projections to support the additional funding requirement from the bank. The consultancy also provided guidance and support in the planning application to Northumberland County Council for the project.
“Working closely with George F. White was vital in making this project a reality,” continued Pip. “Not only did they manage the funding process and provide additional financial guidance where needed, they also helped on the other side of the project, with securing planning permission for the straw pelleting plant. A member of the George F. White team even visited Lithuania with me to look at where the straw pelleting plant is manufactured and see how the plants work in operation. At the same time, other members of the team were liaising with the County Council to guide the planning application through to completion. I really needed a ‘one-stop-shop’ service and that’s exactly what George F. White was able to provide.”
For Pip, the new straw pelleting enterprise holds huge potential. There is great interest and demand for straw pellets, especially within the equine industry, both trading in the UK and exporting abroad. It is a renewable product which makes it highly appealing and it’s also cheaper than many other equine and pet products, such as wood pellets and shavings.
“The main aim of farm diversification is to support and increase the core business”, explained David Hume from George F. White. “Therefore, you have to be 100% committed to a project.”
“We can’t make clients diversify”, said David, who is a rural business consultant. “For it to happen, and be successful, farmers need to be willing to invest time and resources into the project, to get it up and running and to grow. This will allow diversification project to achieve what’s required to sustain the rest of the business and increase profitability.”
Sharing his thoughts on how to diversify successfully, Pip added: “Identify your idea, or dream, and get this down on paper. Once you’ve thought it through as fully as you can, speak to a professional who can provide a non-biased perspective and assessment of whether it’s a viable project and how it would work with your existing business and fit in with that, or around it. The opportunities and grant funding to diversify are there, but you need to be fully behind a new project if it’s going to work and create a sustainable new income for you and your main business.”
For more information on farm diversification, or advice on any of the aspects discussed in this article, please contact David Hume on firstname.lastname@example.org or 01665 511986.
Farmers across the region looking to create jobs, diversify their business, and grow the rural economy could access grants and receive support through LEADER.
Providing grants to rural SMEs, farmers, foresters and communities, LEADER supports projects that create jobs and grows the rural economy. Supporting micro and small businesses, farm diversification, boosting rural tourism, increasing farm productivity, increasing forestry productivity, providing rural services and providing cultural and heritage activities are all LEADER priorities. This means that farmers across the North East have an opportunity of accessing funds for their diversification project.
LEADER delivers a bottom-up, community-led approach to rural and community development, promoting sustainable development in rural areas. An initial outline application will enable applicants to get a ‘yes, progress to a full application’ or ‘no’ answer at an early stage, reducing the risk of spending time and money developing an application for it to fail at an early stage.
The funding available will primarily be for capital expenditure, with funding of up to 40% of eligible costs, a minimum grant of £2,500 and no maximum limit. North East Farmers looking to submit an expression of interest can do so to Northumberland Uplands LEADER or Northumberland Coastal & Lowlands LEADER. There are no set deadline dates or application windows and the funding is open until 2020.
Another current diversification opportunity is Combined Heat and Power (CHP) units. For those businesses with a heat requirement CHP could provide a generous income stream through electricity generation and government incentives as well as heat cost savings. For farmers looking to become self-sufficient from the National Grid and produce their own energy, CHP is an opportunity worthy of serious consideration. CHP provides both heat and electricity through the gasification of burning woodchip or wood pellets. This gas is used to drive an engine which generates electricity and heat. The electricity can either be consumed on farm or exported to the grid. A constant demand for the heat produced through the burning process is needed and can be used for district heating, drying woodchip, heating warehouses, poultry sheds, or reversing the heat for cold storage etc. Through Renewable Heat Incentives (RHIs) from the heat generation, Renewable Obligation Certificates (ROCs) on the electricity and also the potential value from the heat, it can also provide significant income generation.
With a 20 year guaranteed income (with connection prior to April 2017) and a payback between 3 – 7 years CHP systems are fast becoming a very attractive option. We are guiding and encouraging a number of clients to look at these systems as a form of diversification and often an alternative enterprise for younger members of the family. There are however a number of salesmen currently pushing expensive CHP units without managing the process, as well as selling maintenance agreements that only apply 9 – 5, Monday – Friday.
For further information on both LEADER and CHP please contact Louis Fell or David Hume in the George F White Alnwick office on 01665 603231.
Humble Bee Farm has been announced as the winner of the 2015 Farm Diversification Award, receiving a £500 cash prize and engraved silver salver as part of the accolade.
George F. White in association with Driffield Agricultural Society was pleased to award the prize to Mr & Mrs Warters of Humble Bee Farm at the Driffield Show.
Humble Bee Farm, located in the Yorkshire Wolds, is a working arable and stock farm that has diversified to provide a visitor experience which includes accommodation from luxury holiday cottages, to glamping in wigwams or a peaceful campsite. As part of the offering the farm also gives visitors hands-on experience with regular events such as lambing and calving weekends, bat watches and creepy crawly adventures.
John and Julia Warters who run the business have kindly offered to donate their cash prize to the Teenage Cancer Trust, Clic Sargent and Candlelighters, charities all very close to their family. Maisie Bulmer, a family friend, 17, from Salton, North Yorkshire, is currently receiving ongoing treatment for B cell Non-Hodgkin’s Lymphoma. Maisie is part of Kirby Moorside Young Farmers and with the help of the group and her family; they have raised over £25,000 so far for cancer charities.
Julia Warters said: “We are both thrilled to win this award and have our business and hard work recognised. Our farm and accommodation work seamlessly together, showing that diversification can be beneficial to all parties and work in perfect harmony. We decided to donate our cash prize to charity in support of Maisie. Maisie, her family and the young farmers are doing a fantastic job fundraising for cancer charities and we hope this donation will play a part in their efforts.”
Tom Mason, Partner at George F. White commented: “We are delighted to hear that John and Julia have chosen to donate their prize money to such a worthy cause. I was particularly impressed by the business offering at Humble Bee Farm and whole visitor experience as a package. The facilities and service available to guests are fantastic which is reflected in their high level visitor feedback. The tourism business which runs alongside the farming business creates a very strong overall business, able to withstand the volatility in agricultural commodity prices, while providing a secure future for future generations.”
The Warter’s target market is based on the ‘three generations’ – grandparents, parents, and children – not forgetting the family dog, who are all invited to take part in the farms themed events during their stay on the farm. The events are part of the Higher Level Stewardship Scheme to give visitors a full farming experience of life on a farm with Farmer Percy on hand to answer any questions.
Runners up for the award included Staal Smokehouse, Beverley and The Ginger Cow Company, Everingham.
For more information about Humble Bee Farm, visit: www.humblebeefarm.co.uk.