5 March 2020


Farmers considering diversification opportunities in the Welsh countryside as an additional income stream are being urged to seek inspiration from gaps in the market, not from existing ventures where demand is at saturation point. 

Farming Connect has been running a series of meetings across Wales to help farmers contemplating business ventures outside their main farming enterprise.

At those meetings, farmers who have already taken this route have shared their experiences and tips for making a success of diversification.

For any potential diversification, getting some important factors right will go a long way to making sure the enterprise succeeds.

Peter Rees, whose family runs the very successful Erwlon caravan and camping business on the outskirts of Llandovery, said a common mistake farmers make is to diversify into a sector that is already successful locally.

It cannot be assumed that demand is there regardless of the level of competition - ignoring the competition is a big risk.

Supply what the market needs, Mr Rees advised.

“There is a common misconception that “it worked for my neighbours so it will work for me”,’’ he told farmers attending one of the Farming Connect meetings at Llandovery.

“Look at gaps in the market, not at what your neighbour is doing. Find something new, the successful businesses are those that are different rather than one where the farmer has established a business like the one down the road that is doing well.’’

There are instances however when the same businesses can complement one another by drawing more people into the area, Mr Rees pointed out.

“If you take the example of an antique shop, if there is more than one in a town, people who are interested in antiques are more likely to visit that town. The same is true of farm diversifications.’’

Farmers are also advised to consider their own Unique Selling Point (USP) as well as what they are actually interested in.

Livestock farmer Peter Williams, a Farming Connect Mentor, established a pop-up events venue with his wife Sue at Great House Farm, near Usk, 20 years ago.

He said their key USP is the farm’s proximity to large towns and cities and to a good road network.

Mr Williams warned that it was important to consider how the diversification could impact on activities associated with running a farm, such as harvesting and stock movements.

He cited an example of one of his planned events coinciding with a gap in wet weather and a much-needed opportunity to cut silage.

“We couldn’t cut the silage because it would have involved heavy vehicles passing through areas where there were people, and that did create difficulties,’’ he recalled.

Farmers must also consider the long term financial commitment of a diversification too.

Mr Rees said it is vital to reinvest in a business. “You can’t stand still, you have got to invest and reinvest and when you have reinvested you have to reinvest again.’’

He suggested that farmers should only diversify if their core farming business was sound. Diversifying because the current business generates insufficient profit is a mistake, he believed.

“If you have got a failing business, diversification is the worst thing you can do because you will be distracted by running a second business and this could result in both businesses failing. Concentrate on one thing and get that right.’’

In some cases, it is worth looking at how profitability of the existing business can be improved.

“Alternatively, they might consider liquidating the core business in order to invest in the diversification opportunity - but only if they have a very robust and researched business plan and the appropriate skills to make the new business work,’’ Mr Rees cautions.

Consider the objective of a diversification. “Is it to provide an extra income source, to invest in the farm or to provide cream on the jam?’’ said Mr Rees.

For any potential diversification, getting some important factors right will go a long way to making sure the enterprise is a success. 

The Farming Connect meetings were very well attended at what is a challenging time for agriculture, said Farming Connect development officer Alun Bowen. 

He said there is support available from Farming Connect to help farmers considering diversification.

These include marketing and diversification surgeries which provide an hour’s advice for free.

“Through the Farming Connect Advisory Service there is bespoke support for business planning for financing and developing a business idea, as well as bespoke training courses,’’ said Mr Bowen. “These are 80% funded for farmers registered with Farming Connect.’’

Fully funded ICT workshops offer support for developing a website and the Farming Connect Mentoring Service can match farmers with those who have a knowledge of diversification and business development.

Another service is Agrisgôp, a fully-funded action learning programme that brings together forward-thinking, like-minded individuals from farm and forestry businesses at a local level.

Llion Pughe, a speaker at the Farming Connect events, recently used this service in conjunction with a group of farmers to open a restaurant serving local produce in Aberystwyth.

Farming Connect has also launched a series of ‘Ear to the Ground’ podcasts and one of these is devoted to farm diversification.

Farming Connect, which is delivered by Menter a Busnes and Lantra, has received funding through the Welsh Government Rural Communities - Rural Development Programme 2014-2020, which is funded by the European Agricultural Fund for Rural Development and the Welsh Government.

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