Host Peter Green is joined by rural business adviser Simon Haley to talk about diversification as well as meeting two Somerset farmers who are working together and have both diversified their businesses.
In this episode rural business adviser Simon Haley comes on the show to talk about diversification.
Peter also speaks to Somerset farmers Rob Addicott and Jeremy Padfield.
In this second series of Farming Focus we're asking the question 'does my farm have a future?'.
Farming Focus is the podcast for farmers in the South West of England, but is relevant for farmers outside of the region or indeed anyone in the wider industry or who has an interest in food and farming.
For more information on Cornish Mutual visit cornishmutual.co.uk
For our podcast disclaimer click here.
Timestamps
00:01 Cornish Mutual jingle
00:15 Peter Green introduces the episode.
01:19 Peter's Future Farm feature.
02:43 Peter introduces Simon Haley.
02:59 Simon Haley introduces how he works with farmers in the north west region.
03:36 What are some of the most popular diversifications on farm?
06:09 How will I diversify my time?
08:26 If we stand still we go backwards.
10:17 Peter introduces Rob and Jeremy - today's farmer guests.
11:12 Rob Addicott introduces himself.
13:20 Jeremy Padfield introduces his business.
16:15 How did Rob and Jeremy plan their diversifications?
17:40 Advice to farmers who are looking to diversify?
19:06 What skills or attributes will farmers of the future need to thrive?
20:08 Listeners' questions.
23:50 Advice to farmers as to next steps...
25:30 Showstoppers.
27:00 One practical tip from Simon.
28:17 Key attributes.
30:00 Peter rounds up.
Cornish Mutual, Farming Insurance Experts.
Hello and welcome to episode 4 of the second series of Farming Focus, the podcast for South West Farmers, brought to you by Cornish Mutual. I am your host, Peter Green, and today I will be taking a closer look at diversification. We'll be asking our guests to what extent farms should be diversifying their main business to thrive into the future.
Thanks Added to that, we'll be meeting a pair of Somerset farmers who have diversified their businesses successfully through working together and through new activities on their farms. We'll also be putting some of your questions to our guests. On that note, if you're interested in contacting us, you can send an email to podcast.
At Cornish mutual. co. uk. To start each episode, I'm sharing one thing I'm doing on my farm to help it thrive into the future. And I've got to do this in less than a minute. So before we head over to our guest, it's time for Peter's future farm in 60 seconds. For
me, diversification is any profitable activity that wouldn't form part of my farm's core business. After going self employed, I began by ensuring that my farm enterprise runs as efficiently as possible. The next step was to investigate how to improve profitability using existing assets. This led to putting solar panels on sheds and, uh, we've converted existing buildings for light industrial and office use.
Looking forward, I want to try and stack the enterprises supported by the farm. So this ideally means that we introduce new businesses without further investment. Presently, I'm considering hosting short term events on our land and funded school visits. There's also scope to increase the output. Perturb our beef boxes without incurring any more fixed costs.
One of the assets on any farm is the farmer. So the next obvious diversification is to increase income from using my skills off farm. That may be through podcasting, uh, working with groups of farmers like through the rural countryside fund or with individuals. To help develop their businesses. The added bonus of looking off farm to develop our businesses in future is the fresh perspective that it always gives.
So onto my guest today, Simon Haley, a rural business advisor and director of SRH agribusiness. Welcome Simon. Thank you, Peter. Could you just introduce yourself and tell us how you work with farmers to improve their businesses? Absolutely. Yeah. And thank you for asking me on to the podcast today. I work as a rural business advisor, um, across that Northwest region, mainly working on the strategic, financial and operational level, uh, with my farming clients.
I've been doing that for about 14 years. Which means I work across the breadth of those different farming enterprises, Peter, rather than being just focused on one sector in specific and the common denominator for me, there is the people, you know, the relationship that I have and the better I can know their businesses means the better I can help them.
So, um, can you give us an overview of some of the most popular diversifications on farms today? And, and how's that changed, um, over time, perhaps, uh, you know, in the time that you've been helping farmers? Certainly, well, maybe I'll answer that question. Um, if okay, Peter, in reverse, actually, you made a cracking point to me.
Diversification is something that happens after the core part of the business has been locked down or focused onto the max. We've got some spare capacity, whether that's cash, whether it's thinking time, whether that's. Personnel that is our diversification. And traditionally a lot of that diversification, I would say, certainly in this area up in the Northwest, Peter has been financed through grant opportunities and facetiously, I would always say, you know, you look at any farm shop or gin distillery over the past five to seven years, if they haven't had a leader grant, one of those rural development grants, there's something going wrong there.
People would have looked at grants as a cracking way of facilitating that diversification. And I think people's way of looking about diversification was something that was inherently different, Peter, to maybe what their core business was doing. Whereas now. What I'm actually seeing is not just a slight change, but people have gone, hang on, I don't need to be doing something that's out of my comfort zone or something that's wildly different.
Diversification could be as much as having two different livestock enterprises on farm now. Or looking at agri environmental schemes as a diversification of how I traditionally use a field, a parcel of land, and whether that's combining options within that same parcel or not, you've still obviously got various grants out there that are facilitating, uh, new enterprises on farm, but.
With DEFRA's focus at the moment on technology, innovation and productivity, diversification can actually be looking to implement for me, some of that stuff within that enterprise. So, if we are a dairy farmer and looking at putting robots on the farm. Okay, you might not go, well, to me, that isn't diversification.
I'm still milking cows, but it's a diversification of their time to allow perhaps that person to have a lifestyle change or to put better focus on the animal health and welfare, whether it's labor issues, whether that's other factors influencing on farm and your 60 second intro there. You know, the point about what am I going to do with me?
You know, that personal resource diversification of my time. I think it's too easy, Peter to go. If it's diversification, that has to be a spare building on the farm. And if it's not, we can't do anything with it. Well, okay. We know in a way, let's use some of these new phrases. We know what machinery capital is.
We know what labor capital is. We know what maybe infrastructure capital is. If Defra and the like are bringing out these new terms of natural capital, which we'll come on to, I'm sure in terms of maybe some of those new schemes and new direction of policy, is that not something we should perhaps go?
Okay. I understand that. Uh, and if I'm the main driver in the business and how I allocate my time, or You know, as most people would say, I've got a son, a daughter coming back from college. How do I incorporate them in the business? We're going to have to find something new for them to do. Well, let's, let's not always base it on I need money or buildings to do that.
It's, well, what skills do we inherently have to drive that business forward? And if that is going to put ourselves on a, on a CPD course. To improve skills, whether that's from a technical angle or a leadership, a strategic angle, to me, that's as good a diversified input, Peter, as anything else. So just, just to unpack a few bits there.
So CPD continuing professional developments, that might be something that allows us to. upskill people that are already in the farm business. Stepping right back to the beginning of that answer. Um, so we looked there, uh, you said there right at the beginning. Um, once you've nailed down the core business, um, it's looking at whether there's any spare capacity and use that phrase diversification of time.
I really like that. And actually you then sort of went on to develop the idea that diversification It doesn't have to be a complete about turn from the skills that are presently on farm, but actually it could, you know, so it doesn't have to be a market development, a change of market where that we're selling into.
It can be an example of where we just do things a bit better, a bit differently, more efficiently. And that's where there's the technological developments and advancements come in. Absolutely. Yeah, we know the phrase. If we stand still, we go backwards. So we've got to innovate continually within our businesses anyway, or we should be striving to.
You know, a really good example, which every farmer across England will be facing at the moment, not just your farmers down in the Southwest, the removal of that direct payment subsidy. Okay. We go back four years. When it was only a 5 percent reduction, I'm sure most people thought, well, it doesn't bother me.
It's only 5%. I might not even see it when it comes in or not. And then we talk in this cumulative fashion of 15 percent a year, just using the numbers, 15 percent still sounds quite small. I think we're in the danger of forgetting that in 2024, that's 50 percent of that basic payment scheme subsidy that's now gone.
It's now not being received. If we are being encouraged. Through some of that redistribution of money into grants and different schemes to go down those routes. We might not actually be getting ourselves ahead of where we were previously. Peter. So we're now running harder just to stand still. Now, if we're putting all of our time and attention into doing that, a, we're going to burn ourself out through energy and effort.
And then we realize that the bottom line isn't improved. In one shape or form either. So maybe taking that strategic step back, certainly where I would hope to have an influence on some of my client businesses that if they're, you know, heavily involved in the day to day running of that business, 16, 17, maybe 18 hours a day out on farm, rushing around left, right and center a phrase I always use busyness, you know, spell the word business.
In a way, it's just busyness for a lot of people. If I'm busy, I must be productive, and hence I must be viable. It doesn't work like that sometimes. Yeah. We're now going to hear from two farmers who have diversified their main farming business in Somerset. Rob Atticott and Jeremy Padfield operate Stratton Farms on the edge of the Mendip Hills in Somerset.
As Duchy of Cornwall tenant farmers, Rob and Jeremy have come together to share machinery and other parts of their operation. The farms are primarily arable, but they also have beef and sheep enterprises. In addition, they run an arable contracting business within an eight mile radius of the farm. And as we'll hear, they've both diversified away from farming.
Cornish Mutual, farming insurance experts, working to protect the farming community since 1903. Gentlemen, it's great to speak to you. Welcome to the podcast. Can you each introduce yourselves, the farm? Tell us a bit about how you came to be working together, please. Rob, maybe you could start. Okay. Yeah. So my name is Rob.
We are based just south of Bath. I'm the third generation tenant on this farm. We're a Dutchie, a Cornwall. Unit and the holding here is about 350 acres. We were traditionally dairy with a bit of arable and potatoes and beef on the side, as most farmers were at that time, about 2000 times began to be challenging in the dairy industry.
In fact, Jeremy sold his dairy heard a year before us. Um, and I always say I bought his cow and sold them at a profit. I won't ask whether that's true. I think probably the podcast is too short to find out whether it is. Yeah, um, so we, we gave up, uh, uh, dairy farming because a friend of ours had prompted us and said, if you ever convert one of your traditional buildings into an office, my company would take the first one.
So it planted the, an idea. In the US as a family, um, you know, I had decided to come back home and farm and that meant that we probably needed to generate a little bit more income to sustain two families rather than one. And so that was our way of diversifying at that time. So we gave up dairying and we invested.
The money from the dairy into the buildings as well as borrowing a fair bit more money, which was a really great decision for us as a business. Yeah, we've got 7 tenants in those offices, but at the same time, we had obviously a change of approach on our farming business side. We wanted to go down more of an arable route.
That was more of my interest than my. That's and so we then maybe you introduce yourself and we'll come back to, we'll come back to how we joined together. Yeah, that'd be great. Jeremy to pin. I wonder if I was going to get a word in Edgwares. I didn't even take a breath. Hi, so I'm Jeremy Padfield. We, you know, we, we farm, um, as neighbors, um, to the Alicots.
So we're also a Dutchie Cornwall farm, tenanted farm. Like Rob, we're a dairy, traditional dairy farm. Uh, we gave up in the year 2000. Prior to that, we were doing a little bit of diversification, running a retail milk business. Um, but once we sold the cows, we kept the livestock element, uh, running a beef herd.
Uh, expanded the arable on the sort of grassland area that was taken out and also opened up a livery business. Um, so we converted some of the old traditional buildings. Um, the main reason why we did dip out of Daring really was obviously where, where the milk price was back then, which was about 18 pence a litre.
And it needed a great deal of investment in terms of the parlour and the buildings. Um, we were sort of sat on top of a hill with a, with a, A river running at the bottom or a stream running at the bottom and yeah, it was the best option that we opted for. Um, so yeah, converted some of the buildings to livery, so 22 stables and, um, yeah, from there we sort of merged.
the arable business together with the aliquots and it started very gently to start with we both were running a combine each and they were both you know coming up to needing replacements so we decided to buy one between us and that was really the start of I say the relationship then So at that stage, no formal agreements, just, you know, conversations, um, good, good neighbors to one another and actually thinking about the practicalities of it.
You know, what, what's a sensible thing to do to go forward? I think our dads were helping one another out with silage making. So I think that was the seed, if you like the catalyst that sort of evolved since really. Yeah. So we'll have farmers listening to this who are really interested in perhaps Starting this or dipping their toe into this sort of agreement.
Um, they might be on a smaller scale. It might be on a larger scale. What advice would you have for them? How can they start thinking about trying this out? I mean, I think we've always said it's worked well for us because we just did a machine at a time. And I think you've got to look at what each partner can provide to that partnership.
You know, I've got skills that Rob hasn't. Yeah. Haven't I? Rob's shaking his head vigorously. Um, and it's, it's that mutual respect. It really strikes me that that's, that's something which really underpins this. The relationships got to be there in, in the first instance. And I think as you say, Jeremy, having a business to work with that symbiotic that you can dovetail with actually is, is pretty important as well to make sure that it, it can work together.
Thinking of that, um, symbiosis and sort of coming back to your own businesses and making sure that Besides the arable operation, your diversifications work well. How did you go about planning where to start with that diversification? You know, what would work well with the existing farming operation? I mean, I think on the Arab was because we'd obviously, by working together, we we'd been able to buy more high tech, larger equipment than if we're obviously farming independently.
So that's allowed us to, to take on. you know, other areas of contracting that we would not normally have done. So that is a diversification in its own right. Um, and then I think we've, we've both really looked at what we've got in terms of assets on the farm. You've done the offices. We had a farm where most of the cattle buildings were.
And then, you know, after, after Brexit, we were sort of thinking, right, okay, everything's going to change fundamentally. And what else could we do? And that was a phone call from a friend who had a, had a marquee business, who was looking, you know, to move, uh, well, he's looking to sell it. And so he was asking if I knew of anywhere, um, for storage facilities.
So that then took us sort of down the road. So we then sort of vacated that farm and then we've turned that into storage and distribution. So, um, that's, that was the next step of diversification. Rob, what would your message be to listeners who are looking to diversify, but they're just not sure where to start?
I think there are a lot of people who have diversified now, and I would say a lot of farmers will let you have a look around. And I would say, why not go and have a look around. Um, we went up to a show in Birmingham, didn't we? Where they were. There was lots of different opportunities for weddings, for camping, for glamping, all of that sort of thing.
Go to a couple of those shows, go and have a look around, see what sort of floats your boat. And also you've got to recognize where you are, what are your assets on your farm, which you could immediately tap into. We have really good location here. We're on the edge of a town, but we're also close enough to Bath that we get office customers, but you might be in a really good tourist area.
But you might want to do something different than all the other tourist people around you. So have a look, find out what fires your interest. Cause I think you'll need interest to sustain it. Yeah. Yeah, absolutely. I often talk to people about the benefit of doing SWOT analysis and thinking about your strengths, weaknesses, opportunities, and threats, and really looking in the first instance here at the strengths of your position and your business.
So it's not just Physical strengths, but it could be the skills that you've got in your team or something like that. So, um, before you go, I'm going to ask you both the question that we're asking everybody this series in three words, what skills or attributes will farmers of the future really need to be successful, open minded opportunist.
Tech savvy. Okay. Brilliant. Rob over to you. Let's have those three words, please. Flexibility passion. You said that cause your wife just walked out.
That is definitely staying in the edit.
Thick skin. Oh, that's a good one. We don't think we've had that one this series. We've definitely had flexibility and I'm not surprised. And I think is critical, um, but thick skin, I think that's, yeah, that is really important because you will get knocks in this business, right? Yeah. Gentlemen, thank you so, so much for that.
That's been so insightful. Thank you for your thoughts and thank you for coming on farming focus. Thank you for having us. Cornish Mutual. Farming insurance experts. So that was Rob Attica and Jeremy Padfield from Somerset. Simon, some of our listeners have been in touch with their questions about diversification.
I'm going to run them past you now. The first one is, is diversification a form of holding up one's hands and admitting defeat? You know, by moving on to something new and not really quite giving up the old. It's the age old, isn't it? Oh, you only diversify because you know, good doing what you currently do.
We don't win or fail. It's you win or you learn. Okay. So diversification can be a great way of learning about how something might or might not be suited. And that's whether, as we come back to those points off, whether it's there, whether you're in the right location, you know, let's use our grand designs point location, location, location, we might be perfectly suited.
For a farm shop, but we might not like the people we might love having people on farm, but we might be a million miles from the, from the nearest offbeat and trap. So no one's ever going to turn up in the 1st place. Diversification is not a failure. Diversification is a way of you, to me, being much cleverer with those assets across farm, natural, physical, or financial, and getting more bang for your buck, being more efficient with what you've currently got.
And the second question, how do banks see diversification proposals today? Do they see them as an additional enterprise and that spreads the risk within the farming business, or do they see them as somewhat risky in the current economic climate and sort of taking away the focus from the core? Nearly neither of those, Peter, nearly the fact is they would expect it.
So there are certain banks. Well, I would say probably more and more of the banks and certainly by the end of this year, I'd assume all of them would ask what is your sustainability strategy for any new piece of lending, whether that's loan, whether that's simply increasing the overdraft, whether that's just renewing the overdraft facility a couple of years ago, it was a token question.
Just ask verbally, have you thought about how to make your farm more sustainable now? Yes, no, tick cross. Yes, no, tick cross. Have I heard of a stewardship scheme? I'm not sure I have, but do you want me to nod and say yes? And that will do. Now it's nearly. Can you show me evidence that not only you thought about it, are you engaging with it?
So certainly from a bank's point of view, their definition of diversification would be that you are already doing something different. And that is to have or to incorporate an agri environmental scheme, a carbon audit report, something maybe as a biodiversity report that looks into it into even more depth and more future planning.
But the point is, if you haven't, Why haven't you, so you've asked me, is it an additional enterprise spreading the risk or is it conversely seen as risky in the current climate? It's neither. It's seen as standard and you need to be explaining why you haven't considered it already. That's, that's great.
Thank you so much Simon. And remember, listeners, if you've got a question for future episodes, please do get in touch by emailing podcast@cornishmutual.co. Dot UK that's podcast at Cornish, mutual. co. uk. We've got episodes coming up on direct sales, access to land, adding value and much more. So please do get in touch with your questions.
Simon, what's your advice to a listener who's looking to diversify, but just doesn't really know what to do next. Uh, when we, we referred to it slightly earlier, the future farming resilience fund, um, this is part of that, uh, devolved BPS payment that's already been taken away in one hand and is now offered back to farmers in another hand.
Okay, playing up to the stereotype, the money goes in the consultants back pocket rather than necessarily back to the farmer. But for every farmer in England. Who is in receipt of that BPS subsidy, there is approximately 1, 500 pounds worth of free consultancy advice up to March 2025. Now, there's a number of different providers, and you can only obviously take advantage of 1 of those particular routes, but if your listeners haven't yet access that Peter, and are wanting to have that conversation and talk through some of those different diversification conversations.
So no brainer for me to do that. Yeah, absolutely. And there are providers all around the country. I've taken advantage of that scheme and I've been a part of delivering parts of it as well, myself. So people can go on to gov. uk and they can search future farm resilience, is that right? Yeah, if they do that, that will give them a list of providers.
And I believe it's sorted by area. So I can thoroughly recommend that it's something you can easily do when you're having a cup of tea when you're in for lunch tomorrow. Just have a look at gov dot UK search future farm resilience. And that's a great first step if you haven't already made it to really starting out on this road.
We're going to come to my showstoppers now, where I pull out three key points that I think can really help listeners. And today I think really there's something like this. Number one, nail down your core business. Don't let diversification be a distraction. Um, it will be a success if you really understand your business.
Number two. BPS is disappearing. We're all aware of this. We're really feeling the pinch from that now. So it does feel like diversification is essential and diversification can come in many forms. It can be hitting a different market and doing something completely different, but it can also be doing what you do on farm slightly differently.
But whatever it is, make sure that it's a way of using spare capacity. Number three. Don't just leap. Don't just jump. Have a plan. Sit down, work it through. Do some numbers. This can be as a start, just on the back of an envelope. Talk to people in your network, not just around your kitchen table. And then when you've got the a bit of an idea developed and you think you could do with some outside advice, go and seek it.
Uh, it's out there. We've talked about the Future Farm Resilience Fund, but there are agricultural advisors and valuers all around the country. And you can go on to those society websites and get the details of contacts in your area of people who can really help you with that. Before we go, Simon, what one practical tip would you give farmers based on our discussion today?
Let's keep it short and sweet. There are various government and DEFRA focused blogs that will give you early notification of grants and scheme windows opening and applying and links to webinar recordings. These are. Really valuable in terms of not only using your time to the most efficient resource, you know, half an hour webinar that you can watch in the evening.
2 weeks after it's happened is much better than trying to be available as it's actually happening in the middle of the day. Also, signing up to the blogs means that you'll get in the Internet to do the work for you. You put a key search term, whether it's a Google alert, for example. Or you're signing up to some of these farming blogs.
Yeah, absolutely. And I'm subscribed to the Defra farming blog. And that gives me all of that information in a bit of a digest. And it's actually written in good, plain English that you can understand. Um, so I would absolutely underline that point that Simon's made there. Simon, I'm now going to ask you the final question that we're asking everyone in this series.
What three skills or attributes will farmers of the future require to be successful? So number one, uh, we've talked about it a lot through this podcast, a strategic mindset. So what I mean by that is having a plan, having a forward look, what's your short, medium, and long term outlook and write it down.
Have it as a 30 second elevator pitch, what people sometimes refer to, but know where you're going. That's number one, allied with that, you need a focus. So that's our second point. That's our second skill, a focus. You can get very easily distracted by the latest FAD, the latest diversification venture.
We've got a strategy and we're going to stay focused. It doesn't mean that we can't incorporate some of these different things, but it has to be going in the same direction. We are. And that was the point I made before. Don't chase grants for the sake of it. If it takes us 2 years off in a different direction, but ultimately, it's And this is important as the other 2, Peter.
Passion. If you can't be passionate and enthusiastic about what you're going to do, how can you expect anyone else to be? That's either the consultant who's helping you, the bank manager that's financing you, the RPA appraiser that's giving you funding to go towards it. We need the passion. I'm 100 percent passionate about what I do.
I need you to be about 100 percent passionate about what you do as well. Simon, thanks so much for that. Um, that's all been hugely helpful and there's so much there for us to get our heads around. So three bonus episodes there, Peter, at least Simon, at least. So that's it for today's episode. A big thank you again to my guest, Simon Haley, and thanks also to Rob Adekot and Jeremy Padfield.
In next week's bonus episode available from Tuesday coming, Simon will be giving more information on the money side of starting a diversification and the support that's available to you. Then we'll be back the following Tuesday with another full episode exploring the ways in which our farms are shop windows to consumers.
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I've been Peter Green. Until next time, it's goodbye from me and everyone in the Cornish Mutual podcast team. Cornish Mutual. Farming Insurance Experts. Cornish Mutual is hosting several First Aid Days. These one day events are for a Level 3 First Aid Award and will help attendees learn essential skills for responding to accidents and emergencies on farms.
Completing the course will grant First Aid certification for three years and with limited space available, head to the Cornish Mutual website for all the info and to secure your spot.