One of the original objectives of the Common Agricultural Policy (CAP) was to keep small farmers on the land by supporting their incomes with subsidies. That system has tragically resulted in large numbers of small farmers trapped in a lifetime of low incomes and hard work.
Another problem created by CAP subsidies is that new entrants to farming and efficient producers anxious to expand are denied access to the extra land they need because small, inefficient farmers can "hang on" and don't sell up.
The lack of affordable land is compounded in the UK by the exemption from inheritance tax on farmed land and forestry, that attracts non-farming investors to bid up the price of any that becomes available. The end result is that many with small, unviable farming units can't expand and have to find other ways of supplementing their incomes.
Meanwhile the Westminster Government has set in motion the most radical reform of agricultural support and policy south of the border for 45 years, and there are concerns that the Scottish Government may follow suit.
At the heart of the new policy is the move away from direct and regular annual payments to farmers, to payments for "public goods". That won't happen immediately, but from 2021 support south of the border will reduce by at least 14 per cent a year and by more for larger farms. Minimising the impact of that decline in income will be vital for the survival of farm businesses and diversification is bound to play a major part in that process.
One of the biggest changes in Scottish agriculture over the past fifty years has been the dramatic increase in one-man units where the farmer does all the work himself, assisted by his wife when she is available. That's been another of the big changes in recent years - the way many farmers' wives now have a well-paid job off the farm to help supplement the farming income. Those with smaller farms have had to join their wives in taking paid work off the farm to earn the bulk of their income, leading to very long working hours.
A recent report from rural insurer NFU Mutual revealed that over 27 per cent of Scotland's farmers plan to diversify in to another enterprise to support their farm business after Brexit.
The insurer surveyed farmers with established diversification businesses to gain insight into their experiences, as well as farmers solely involved in farming activities, to understand their attitudes and plans for future diversifications.
The research found that from the 62 per cent of UK farmers who have already diversified their businesses, 94 per cent have been financially successful.
Not surprisingly, boosting farm income was the main reason for diversifying. Other reasons included providing a business opportunity for a partner or other family member (26 per cent), utilising redundant farm buildings or unproductive land (20 per cent), and providing a short-term income (9 per cent).
While 89 per cent of diversified farmers said their schemes had a positive effect on the farm business, respondents highlighted a number of challenges running an alternative enterprise alongside a farm. These included lack of time, red tape, unreliable broadband and cash flow.
The important role diversification plays in the sustainability of many farms was demonstrated with 63 per cent reporting that the income produced by diversification was "vital" or "significant" to their farm. On average, diversified farms report that 27 per cent of their income comes from non-farming activities.
The most common diversification on Scottish farms was renewable energy (34 per cent), followed by property letting (17 per cent) and holiday accommodation (8.5 per cent).
There seems to have been a mad rush by farmers to get involved in the renewable energy bonanza. All over Scotland wind turbines have been erected with plans for many more. Then there are small-scale hydro-electric schemes as well as solar panels on the roofs of farm buildings or farm houses.
All those farm cottages that are no longer required to house farm staff have either been sold, or are rented out on long-term lets or as holiday homes. Even with occupancy rates of about 60 per cent or less for holiday lets, depending on the location, they offer another popular opportunity to boost farm incomes.
Diversification ventures range from other tourism related activities, to farm shops, direct selling of farm produce at farmers' markets, relief working for other farmers, agricultural contracting and a whole host of ventures that add value to farm produce - and many more to help farmers stay on the land.
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