While no-one – in industry or Government – knows the full implications of Brexit, there is no question that agriculture is one of the sectors which will feel the full impact of our withdrawal from the European Union.
In January, Michael Gove, the Secretary of State for Environment, Food and Rural Affairs, speaking at the Oxford Farming Conference, said Government would guarantee subsidies at the current EU level until the 2022 election.
He also talked widely about future rewards for environmental husbandry, but still the picture is far from clear and there are some serious threats in the form of tariffs, custom controls and increasing competition.
That has, inevitably, made farming businesses turn their attention to other possible income sources. In fact, a survey by Farm Business Innovation showed that out of 300 farmers and rural business owners asked, more than 74% are more likely to diversify their land.
At Burgis and Bullock, we work with several rural businesses who have successfully diversified into areas such as farm shops, building conversions, caravan parking and lorry storage.
For some it has provided some welcome additional income, while for others it has become the mainstay of their businesses.
Burgis and Bullock has worked with the Oakes family at Balsall Common for over 30 years. In the last five years they have established and built-up a thriving farm shop and café business.
There were several factors in their favour, such as location, but they have planned and executed their diversification very well and it is really reaping rewards.
Not only has it provided a really strong business for the family, it has had a very positive knock-on effect for other rural businesses in the supply chain.
However, with any business venture, there are risks involved in diversification and steps rural business owners must take before they dip their toes into other areas of business.
While there are great advantages in diversification and for many rural businesses it will be essential that they explore additional income streams, there are potential impacts with, for example, inheritance tax, Business Property Relief and Agricultural Property relief, and also Entrepreneurs’ relief for capital gains tax.
So if you are a farming or rural business and looking to the future, please do get in touch.