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Written by Richard Morgan, Senior Planning Consultant

The final version of the revised National Planning Policy Framework (NPPF) has now been published by the Government and there is continued support for farm diversification to drive the rural economy, presenting an opportunity for farmers and landowners to create additional income streams.

With the uncertainty of Brexit, unpredictable weather, rising energy costs and lower food prices, the challenges facing British farmers have never been more apparent. Many farmers are reliant on subsidies through the Common Agricultural Policy (CAP) to run their businesses at a profit and these will soon come to an end. As such, farm businesses may need to explore new opportunities to make money whilst maintaining the agricultural function of the farm.

According to the latest Defra Farm Business Survey, 64% of farms in England now generate income from some form of diversified enterprise. Total diversification income accounted for almost a third (29%) of the £2,160m generated from all farming activity in England in 2016/17, with an average diversified enterprise income of £17,100 per farm. However, Defra point out that there were wide variations between farms.

 

Income from diversified enterprises - England 2016/17
  Number of farms Percentage of farms Total farm business income for these farms (£m) Income of diversified enterprise (£m) Average enterprise income (£/farm)

Diversified enterprises (all kinds)

36,600 64% 1,690 620 17,100

Letting buildings for non-farming use

24,600 43% 1,330 440 17,900

Processing/retailing of farm produce

5,200 9% 170 50 9,700

Sport and recreation

7,200 13% 360 30 3,600

Tourist accommodation and catering

3,400 6% 150 20 7,000

Renewable energy

16,400 29% 920 50 7,000

Other diversified activities

4,700 8% 250 30 7,000

Source: Defra Farm Business Survey, England

 

Rural diversification can come in many forms. Some may want to take a side step into alternative agricultural activities such as rearing rare or unusual livestock, growing specialist crops or investing in modern technologies. Others may take a bold leap into a non-agricultural sector. Many farm diversification plans include residential developments and mixed use schemes such as farm shops and cafes, or flexible commercial business units. Recognising the aesthetic and historical value of traditional farm buildings, new planning policy continues to promote the re-use and conversion of redundant farm buildings. This encourages bringing buildings, that are not suitable for modern agricultural practices, back into effective use where it will support the rural economy.

Where there is demand, providing tourist accommodation can also be a profitable business venture which is often supported by planning policy. Common examples include barns converted into holiday lets, ‘glamping’ pods, shepherd huts, log cabins and even farm stays for working holidays. Other popular diversification enterprises include equestrian facilities, pet boarding, cookery schools, craft workshops, shooting grounds and venue hire for weddings and parties.

Do you own land on the edge of a settlement? The Government has ambitious house building targets to meet the increasing demand resulting from a historic undersupply. To address affordability issues in rural areas, the Government has introduced new planning policies to allow the development of affordable and entry-level housing schemes on non-allocated greenfield sites, including land in the Green Belt in specific circumstances.

Although subsidies for renewable energy have reduced in recent years, they have not dried up completely and with the technology improving all the time, payback periods are shortening making investments viable even without grant funding in some cases. At a time of increasing energy prices, it could be a smart move to reduce your dependency on centralised energy sources. Forestry is also proving to be a shrewd investment, with the price of timber continuing to rise and the Government providing incentives and grant schemes for felling and planting.

If you are diversifying into other forms of agriculture, this will not usually require planning permission. The Government has also recently increased permitted development rights to allow farmers to erect new agricultural buildings with a floor area of up to 1,000 square metres without planning permission in order to help them adapt to more modern farming practices. However, if you are proposing to move into a non-agricultural sector, planning permission is likely to be required for the change of use of the land or buildings and any new-build development.

If you are considering a rural diversification project or would like to discuss your options, our planning and development team has considerable experience in this field and can provide professional advice and support.

For further information, please contact Richard Morgan on 01434 609 000 or email richard.morgan@youngsrps.com

 

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