Agribusiness News November 2023 – Sector Focus: Croft Diversification

Diversification is a great way to add value to your existing physical and personal assets, add a new income stream to your farming business, and can be both financially and personally rewarding for you and your family. It can involve adapting and changing your current business to meet new trends, markets, and customer demands which utilise and add value to your existing physical assets (natural assets, views, biodiversity, land, buildings, machinery, etc.) and/or your own personal knowledge, skills, interests, culture and heritage. Crucially, diversification should be unique to you, your farm or croft, family, and lifestyle.

There is now a notable income gap between farms with diversified activities and those without. Latest data from the Scottish Farm Business Survey outlines that farms with diversified activities on average generated £24,200 more income than those without, and 58% of businesses surveyed (sample size: 350) now have at least one diversified activity (Source: Scottish farm business income: annual estimates 2021-2022).

While diversification for many is driven by necessity, to support farm business income, it’s important that farmers and crofters choose enterprises which they themselves are truly passionate and engaged in rather than looking over the hedge and following others’ diversification paths.

Agritourism

Agritourism continues to go from strength to strength in Scotland with a growing network of farmers and crofters showcasing the very best in food, farming, and environmental sustainability to domestic and international visitors. Inviting the public onto your farm or croft isn’t for everyone and does require a specific skillset and a willingness to open your farm gates and privacy to consumers, but those who do enjoy engaging with visitors and it can generate healthy financial returns. Stand-alone farm tours can generate around £15-30 per person, per hour, with more bespoke hands-on activities and demonstrations like lambing experiences, alpaca walking, interactive sheepdog/sheepshearing demonstrations generating around £35-50 per person, per 1-2-hour session. These may also include refreshments and home baking. Luxury food and drink-based experiences using home-grown/reared produce can generate around £400-600 per small group (6-8 people) with private chef options and large group bookings commanding a premium.

Croft tours, workshops, arts and crafts

I recently returned from a work trip to Shetland where I experienced first-hand the creativity of crofters and smallholders who celebrate their crofting roots, culture, and heritage, sharing them with domestic and international visitors. Bespoke workshops and events are a powerful way to showcase traditional crofting practices, culture, heritage, and the community spirit which underpins life in rural areas. Visitors to Shetland can take part in a variety of workshops including; carpentry, spoon and shawl pin whittling, photography, art, and knitting using pure Shetland wool. Local croft tours can be combined with guided tours of Iron Age brochs, Viking longhouses, early Christian chapel sites, and twentieth century military remains, among other trips to sites of natural and historical interest.

Showcasing local, seasonal food and drink is also a big part of the developing culture on Shetland where businesses work collaboratively for mutual benefit. Shetland has a strong agricultural supply chain where pure Shetland Lamb and Mutton is reared, slaughtered, processed, and delivered to local hotels and restaurants. Through collaboration and supply chain efficiencies, crofters can add value to their livestock, provide employment within the local abattoir, and supply local hospitality outlets, which ultimately fulfils growing customer demand for an authentic product and story with strong provenance.

The key learning from Shetland is that crofters and smallholders have identified their own unique selling point, creating sustainable income which align their personal interests and skillsets with crofting roots, culture, and heritage which is unique to them, their family, lifestyle, and individual crofting enterprises.

Closer to home, other great examples of farmers adding value to their assets and creating alternative diversified income streams include: photography workshops, floristry workshops, wreath making, soap making, foraging, basket weaving, bee keeping and smallholding courses, children’s education and farm to fork activities, to name a few.

Diversification: where to start?

• What interests you or your family specifically? What are you truly passionate about?
• What assets (physical and/or personal) could you add value to on your farm or croft?
• What makes you, your farm, location, views, produce, culture, heritage, unique from others?
• Does someone in your family or business have unique skills or interests they could pursue into a new business opportunity?
• Diversification can be seasonal. Do you have times in your agricultural calendar which could support an additional enterprise? E.g. Christmas
• How do you want your diversification to fit with your lifestyle? Have a vision not just a business plan.

Calum Johnston, calum.johnston@sac.co.uk