Diversified income gap widens despite smaller profit margins

Around 330 farms have been providing us with their data over the last five years. This allows us to see changes in their diversified activity that generates income. Diversified activities are non-agricultural activities that use farm resources.

More than half of farms have diversified activities that generate additional incomes to their businesses. In 2022-23, 59% of farms had at least one diversified activity.

Falling diversified income and rising costs from diversified activities led to lower overall profit margins from diversification in 2022-23. The average income from diversified activities decreased to around £9,900.

However, the gap in overall farm business income between the average farms with and without diversified activities widened to £38,300. The overall income of farms with diversified activity increased by 24%, 2 percentage points more than the increase in income of farms without diversified activities.

The results show that farms who have diversified are generally more profitable than farms without diversified activity.

Figure 10: Average farm income, farms with and without diversified activities, 2018‑19 to 2021‑23. 2022-23 prices.

The most common diversified activity continues to be renting out farm buildings (for purposes other than tourist accommodation). Other common profitable activities that farmers are doing include micro electricity generation, wind turbines and hosting mobile telephone masts.