More farmers are planning to start or further develop diversification activities in the next five years as the BPS is being phased out, according to new research.
The number of farmers surveyed by NFU Mutual who are planning to start a diversification has risen to 17%, compared to 15% in 2023.
It has also revealed that 40% of farmers already running diversification enterprises plan to further develop them over the next five years – up 3% on 2023’s figure.
UK farmers’ income from diversification enterprises on average accounts for 13% of farm turnover in 2024, the same figure as in 2023.
According to the rural insurer’s research, renewable energy remains the most popular form of diversification among farmers.
Nearly one-in-10 farmers operate schemes such as solar power, wind turbines or anaerobic digesters - up from 6% in 2023.
It comes as the Basic Payment Scheme (BPS), the previous system of support, is being phased out and while it was worth £1.84bn in 2020 it will fall to £480m in 2025 and disappear completely by 2028-2029.
Since UK left the EU, the previous Conservative government has been gradually moving to a new era of sustainable food production coupled with public payments for public goods.
But Chris Walsh, NFU Mutual farm specialist, said more farmers were seeking to diversify to complement their farming activities and make their businesses stronger.
He said: “From vineyards and wedding venues to solar farms and wind turbines, farmers are making the most of the resources available on their land to make their businesses more sustainable.
"In many cases, they are also providing career opportunities for farmers’ families, while creating rural jobs and boosting local economies.”
However, he warned that diversification was rarely a way of making a 'quick buck' and that successful schemes required careful planning, good management and long-term commitment.
“For the vast majority of farmers, running a diversification business is a way of supporting their farming enterprise, as legacy Basic Payment Scheme (BPS) support is phased out,” he said.
“There are some fantastic success stories out there, such as English wine producers becoming some of the world’s highest rated, also fantastic wedding venues, and hugely popular glamping sites."
To help farmers plan how to incorporate diversification into their agricultural businesses, NFU Mutual has developed a an online hub with information and case studies.
