Types of Farm Diversification

Woman and boy laughing while picking a cabbage
Thinking of diversifying your Farm's income? It’ll surprise no one that diversification can be implemented in a variety of ways, many of which are unique to a farm’s context and a farmer’s values.

Whilst outlining farm diversification in all its weird and wonderful forms is beyond the scope of this post, we are going to break down some of the most common types of diversification you could consider.

Agricultural Enterprise Diversification

This means increasing the number of different agricultural enterprises on a farm and can be achieved by including more diversity in your cropping rotation or through adding or increasing livestock breeds. Whilst managing these enterprises in hand maximises your control of the enterprise, if you don’t already have the relevant equipment, infrastructure, knowledge or time, it can be infeasible. 

Sheep grazing on farmland

Instead, agreements like grazing licenses and contract farming can bring in a diversity of income without the high investment costs. Another increasingly relevant form of agricultural diversification is agroforestry and forestry which can provide additional revenue from fruit, nuts, and wood alongside payments from grants and environmental markets.

Environmental Diversification on your farm

Our second farm diversification type is environmental diversification. This means generating revenue by providing an environmental benefit to society. It can also include generating income from public payments (Sustainable Farming Incentive, Countryside Stewardship, England Woodland Creation Offer) and private schemes such as Biodiversity Net Gain (BNG), carbon credits, and nutrient neutrality. 

Looking to take advantage of environmental diversification?
Land App offers a host of tools and guidance on how to explore the opportunities offered by these schemes.

Certain scheme options, such as the England Woodland Creation Offer require land to be taken out of farming; but others, such as Countryside Stewardship payments for the creation of species-rich grassland or BNG, can be implemented with low-intensity farming. In certain contexts, this blending of environmental options with farming can enable farmers to market the environmental benefits of their produce.

Enterprise Diversification

The third and final type of diversification is enterprise diversification. This is the most common perception of diversification and involves adopting non-agricultural enterprises.

Chalkboard sign reading 'This way to farm shop + tea room'

The list of options here is limitless but generally includes enterprises to process or sell produce on the farm – selling eggs, milk vending machines, pickled veg, cafes, farm shops and veg boxes are all examples; enterprises to encourage and charge visits to the farm – this includes fishing lakes, shoots, horse riding, campsites, shepherds hut accommodation, and yoga retreats; and enterprises to support other businesses – this could include providing storage space, solar farms, workshops, or events space for businesses to use often using converted farm buildings.

Which Farm Diversification Route is best for you?

The possibilities and uncertainties can make deciding how to diversify daunting. An important first step is understanding what you have that is unique. Do you have a unique opportunity to sell to people using your land for running, horse riding, or mountain biking? Are you close to a town that attracts tourists? Do you have low productivity south-facing fields that could be used for solar power? Are you experienced in regenerative agriculture and do you think you could run courses or host events on similar events that would draw people in? Asking questions like these is a great starting point.

Make use of tools that can help to speed up decision-making, such as Land App. Digital tools can help you to easily plan land use options and assess which is the most feasible for you, and your land.

Man in a checked shirt on a laptop in a field

Finally, do something that you care about. You’re far more likely to be successful at something if it aligns with your values as well as increasing business profitability, especially if it’s innovative. This is not to say jump into a charitable, unprofitable enterprise, but if you’re weighing up similar options don’t forget to consider what you, your family, and maybe even your community are most passionate about. Your passion and the support of your friends and family may well provide you with a firmer foundation for your new venture.

Now you’ve decided to start your diversification journey, read more about the risks and benefits to consider.


I have spent the last four years working with farmers, NGOs, businesses, and government bodies exploring how agriculture can transition in an economically and environmentally sustainable way. Managing land in a regenerative and informed way has huge potential to enhance UK habitats providing benefits to society in the form of more resilient and higher quality food production, cleaner air and water, improved flood resilience, more space for recreation, and greater species diversity and abundance. These services benefit all of society and I am passionate about building an economy that provide fair payment to those providing them.
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