How Ireland's Farmers Are Diversifying Their Income Streams
Why is diversification important?
Diversification avoids putting all your revenue-generating eggs in one basket. After all, we live in uncertain times and farming is certainly not immune to the challenges resulting from COVID-19 and the UK’s departure from the EU. But many Irish farmers have already been diversifying their income streams with great success over the years - in this article we look at how.
Advantages of diversifying your farm
There are a large number of benefits to diversifying your farm, making it more like a rural enterprise whilst still keeping its traditional workings. These benefits include:
As the coronavirus outbreak has shown us, we never know what’s around the corner. By offering up new and different activities on their sites, farmers are discovering what works and what doesn’t. They are also better able to respond to new opportunities as they arise, hopefully then protecting revenue in future. It means being less susceptible to any one income source failing.
Developing new skills
It’s true that diversifying any business can be daunting. But it’s also an excellent chance to branch out, learn something new and make new business contacts.
Diversification is a great way of continuing on the farming tradition. The new income streams you create can also subsidise the more traditional activities, as well as paying for new and innovative ideas.
But how are farmers financing this?
The downside of diversifying a farm is that it’s unlikely to come cheap. Making - and sticking to - a realistic budget is essential, and it’s all too easy to under or over estimate. But the good news is there are a number of financial supports available for companies looking to innovate and grow, including R&D Tax Credits and R&D Grants. And you don’t you have to go it alone either! The R&D experts at Myriad Associates (the name behind Tax Cloud) will be happy to advise you of the best options to suit and guide you through a claim.
Ideas for farmers looking to make extra cash
Irish farmers are growing and diversifying their business in a range of exciting and cash-generating ways, for instance:
Using mature woodland as the location for recreational activities like zip wiring, playgrounds, glamping and holiday lodges is the ideal way to increase income. Safety and planning are key here if you’re considering this for your business, and a large amount of R&D may be involved in avoiding damage to the woodland habitat. However, the financial rewards long term can be substantial.
Turning fields into campsites
Empty fields are ideal for turning into camping and caravan sites, requiring a simple shower unit and toilet facilities. If the field is in a popular tourist area it can be an especially valuable extra income stream.
You can start off with a fairly basic offering and add in electricity and water points later. By reinvesting the money generated, farmers can create a sustainable business without a lot of pricey outlay.
This idea has worked well for many Irish farmers over the years but we strongly recommend discussing your plans with your local government authority first.
Offering demonstrations, school visits and tours
An excellent additional income stream that requires no real outlay at all is in opening up the farm and offering small group tours. This is also the chance to show some of the more traditional farming practices in action, and cash is generated by charging for entry. For those who are confident enough to speak in public, community centres, events and schools always need speakers, with topics like veg growing, jam making and beekeeping particularly popular.
Private fishing lakes
Farmland that’s home to a lake or two is ideal for generating income from fishing. Generally there are two types: The first is simply about the enjoyment of fishing, so once caught the fish is immediately released. Customers pay as they enter and can then set up for the day. If one of the fields is also a campsite as mentioned earlier, camping and fishing packages can also be offered.
The other way is “Fish and pay”. This is where any fish that are caught are kept by the angler, but they must be weighed and paid for. Farmers just need to make sure their lake is well stocked to keep the revenue coming in.
With many people still preferring to stay at home and shop online in the wake of COVID-19, internet sales of all things garden-related are booming. Likewise, farming tools and equipment also sell well even if they’re second hand.
From flowers to trees to mowers, keen gardeners are always on the look-out for something new. Many farmers are now big sellers on popular platforms like Gumtree and eBay, making a tidy extra revenue stream.
Starting a B&B
This one can involve a fair amount of outlay but is also an excellent way to make sustainable additional income, especially if the farm is in a tourist area. Barns can be converted and spare rooms adapted for guests, and many farmers also offer pony rides and animal petting for children.
Have you completed an innovative scientific or technological project recently?
The farming industry is one of the most innovative in Ireland, and many projects actually involve the development of science of technology without the farming really recognising it. This is why we strongly recommend reading up on R&D Tax Credits to see if you could make a claim towards the cost.
The R&D Tax Credits scheme is a generous tax incentive offered by Revenue, allowing for costs like wages, materials and overheads to be reclaimed against Corporation Tax. Loss-making companies can also claim the benefit as a cash lump sum where no CT liability exists.
Even if the project was unsuccessful, if a technological or scientific innovation was made - however small - then a claim will likely follow.
See our R&D Tax Credits page for more information or call us on +353 1 566 2001. Don’t forget, you can also use our specially developed Tax Cloud portal to make a fully supported, maximised claim at your own pace too. Have a look at the Tax Cloud portal for businesses to see what your business could claim and get the ball rolling.
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