Farm diversification is an increasingly common practice for farms and rural businesses around the world. In the face of increasing financial, environmental and market pressures, diversification offers the opportunity to spread income risk and build resilience.
Farm diversification is the introduction of a new business activity to generate another source of farm-based income. The new or additional farming enterprise may be agricultural, such as a new crop or animal, or non-agricultural, such as agritourism or on-farm processing of food. Although the primary driver for diversifying is to generate income, other benefits of diversifying include:
- Spreading income risk
- Improved use and management of land
- Developing opportunities for future growth
- Creating opportunities for family involvement (including for succession planning)
- Creating renewed interest in the farm business
Diversifying into a new enterprise or business activity can bring with it great reward but also great risk and as with any new business venture, thorough planning and investigation is required. Choosing the most suitable form of diversification is a critical decision and is influenced by many factors including personal considerations (lifestyle, tolerance of risk and debt, capacity to take on additional workload), farming considerations (existing enterprise, land and water resources, current agronomic practices) and business considerations (market demand, existing debt, risk profile).
Diversification often involves significant financial outlay, development of new skills, access to new resources and most importantly an ability to create or respond to new market opportunities. There is no single correct path that will ensure success in undertaking farm diversification and as the case studies provided on this website demonstrate, the drivers and outcomes are different for every farmer.
This website is designed to be a first-stop on the journey of diversifying, providing information about what new enterprise may be worth considering for your farm. To assist you consider if diversifying is the opportunity you are looking for, take a few minutes to consider the 10 questions provided on this website. This website does not provide all the information you need to decide if diversifying is the solution you are looking for, rather it aims to inspire your thinking of what might be possible. To assist you on your journey, a range of resources and links to further information have been provided.
If you have any questions or are looking for information on a plant or animal that is currently not included on the website, please contact us and let us know what you are looking for.
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