FARM diversification is catching on in Cumbria with farmers desperate to provide a valuable second source of income.

And the current level of interest in farm diversification was reflected by the turnout of county farmers to the Penrith-based The Farmer Network workshop in Kendal funded by the Cumbria Growth Catalyst Programme.

More than 55 farmers heard a talk by the main speaker, John Wellbank of Ireby Green Farm, which is just off the A65, near Kirkby Lonsdale.

John is a consultant, who until recently, worked for Rural Futures helping farmers develop their farm diversification ideas including applying for planning and grants. His wife, Sylvia, comes from a long line of farming women and has spent more than 30 years in the catering industry.

Back in 2012, they bought Ireby Green Farm which was 76 acres with a range of redundant buildings and a 22-pitch caravan site. The potential of the site and its location, was the main attraction.

Using John’s planning expertise and with the help of a Leader grant, they opened a farm café in October 2013 on the site of a redundant pig building seating up to 75 people. They also developed the caravan site with all pitches having hard standing and electric hook ups and two shower/toilet blocks and a laundry room. Covered winter storage is also provided.

The farm cafe exceeded expectations with strong demand from regular local customers. Renting seasonal pitches to caravan owners was a useful way to generate income without much time commitment and the caravan owners were also regular users of the cafe.

With the help of a Leader grant a new farm shop was developed in a traditional Shippon, opening in February of this year, selling the café’s home-made breads and cakes and produce from local suppliers.

John stressed the need to develop a realistic business plan not only to obtain loans and grants but also to ensure the future viability of the business. Cost and income projections should not be overly optimistic and must be linked to cash-flow, he said.

Farmer Network’s Veronica Waller gave details of how to apply to the RDPE Growth Programme which provides grants for rural business development, tourism infrastructure and food processing. Funding is of up to 40 per cent of project costs with a minimum grant of £20,000 which for most applicants means spending at least £50,000. She stressed the importance of employment creation with the scheme having a guideline of one job per £30,000 of grant. There is a two stage application process and the deadline for the Expression of Interest application is February 16 2020.

John Cooke, Director of Thomson Hayton Winkley and the Rural Law Practice said: “There are many ways in which farms can diversify successfully to keep them as a viable entity. Depending on the project, there can be a significant impact on the agricultural property relief available against the inheritance tax position of the holding and this needs careful thought and planning. Various other legal questions can emerge during the preparation stage for diversification, including rights of way, land ownership, planning and tenancy issues.”

Andrew Robinson Partner & Head of Agriculture at Armstrong Watson said: “Moving away from traditional farming operations offers great opportunities to ensure the future viability of your business. However, there are important tax issues that need to be considered before starting your new venture including VAT. It is important to talk to your accountant about whether new diversification enterprises should be set up as separate business from the farm.”

The Farmer Network is planning to organise further events in 2020.