Accredited official statistics

Chapter 5: Diversification

Updated 22 January 2026

Applies to England

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A possible and rational response to the changing position of agriculture in the economy is for farmers to seek to enhance their income from sources other than conventional farming production through diversifying their business activities. Diversification is widely thought to offer considerable scope for improving the economic viability of many farm businesses. Many farm diversification activities can also provide benefits for the wider rural economy and community by, for example, encouraging and providing additional job opportunities.

Most farm businesses engage in other activities in addition to those carried out on their own farm, even if only hire work for another farmer. However, the definition of diversified activity adopted here excludes agricultural work on another farm and is restricted to non-agricultural work of an entrepreneurial nature on or off-farm but which utilises farm resources.

This chapter focuses on those farms which have diversified and excludes farms which do not undertake any diversified activities.

Proportion of farms engaging in diversified activities

Using the above definition, 72% of farm businesses in England had some diversified activity in 2024/25. Figure 5.1 shows that, since 2015/16, this proportion has gradually increased by 10 percentage points.

Figure 5.1: Percentage of farm businesses with diversified activities England 2015/16 to 2024/25

Source: Dataset Table 15.2

Figure notes:

1. The legend is presented in the same order as the lines.

2. The breaks in the series shown in 2017/18 and 2022/23 represent changes in the method used to assign farms to a specific farm type, along with further changes to the Standard Labour Requirements and the update to the weighting methodology in 2022/23. Where breaks occur, average income has been calculated using both methods for comparability.

3. 95% Confidence Intervals have been presented to show the range where the true value is likely to lie and provides an indication of the degree of uncertainty of the estimate.

4. 2022/23 and 2023/24 data has been revised with updates to Standard Labour Requirements and weighting methodology. For more details see 6.1 Survey details.

5. Letting out buildings refers to receiving rent for farm buildings or land for purposes not connected with the farm business, and does not include income from tourist accommodation.

The most popular diversified activity in 2024/25 was letting out buildings, with 50% of all Farm Business Survey (FBS) farm businesses in England engaging in this activity. This was 1 percentage point higher than in 2023/24. For 16% of all FBS farm businesses, letting out buildings was their only diversified activity.

The second most common form of diversified activity in England was generating solar energy, with 27% of all FBS farm businesses engaging in this activity in 2024/25, which was a negligible change compared to 2023/24. However, since 2015/16, the proportion of farms businesses producing solar energy has increased by 9 percentage points.

The other diversification activities had uptake rates of between 7% and 13% in 2024/25. See dataset Table 15.2 for the full time series data.

Enterprise income from diversified activities

Figure 5.2: Enterprise income from diversified activities in England, 2024/25

Source: Dataset Table 15.4

Figure notes:

1. Income values are for farms engaging in those activities; farms not engaging in each activity have been excluded.

2. 95% Confidence Intervals have been presented to show the range where the true value is likely to lie and provides an indication of the degree of uncertainty of the estimate.

3. Letting out buildings refers to receiving rent for farm buildings or land for purposes not connected with the farm business, and does not include income from tourist accommodation.

Figure 5.2 shows that, in 2024/25, farm businesses with diversified activities had an average (mean) enterprise income of £31,100 from these activities. At the all farm level, the most profitable enterprise was letting out buildings, which bought in an average of £27,900. Providing tourist accommodation and catering, and generating other renewable energy, both provided considerable income to the farms participating in these activities, at £8,700 and £19,800 respectively.

Although offering sport and recreation activities was the third most common type of diversified activity, it had the lowest average enterprise income in 2024/25, at £3,600.

For the full breakdown of output and income from different diversified activities by farm type, see dataset Table 15.3.

Dependence on diversified income

Figure 5.3: Distribution of diversified farm businesses according to the proportion of their Farm Business Income from diversified enterprises in England, 2023/24 to 2024/25

Source: Dataset Table 15.3

Figure notes:

1. Excludes farm businesses with no diversified activities; the proportion of farm businesses with a negative Farm Business Income is different to the proportion for all farm businesses, found in Figure 2.1 of the FBI publication.

2. The legend is presented in the same order as the bars.

3. 95% Confidence Intervals have been presented to show the range where the true value is likely to lie and provides an indication of the degree of uncertainty of the estimate.

4. 2023/24 data has been revised with updates to Standard Labour Requirements and weighting methodology. For more details see 6.1 Survey details.

Figure 5.3 shows how much diversification contributed to the FBI of farms in 2023/24 and 2024/25, for farm businesses engaging in diversified activities. There was substantial variation in the dependence on this part of the business in 2024/25. For 36% of farm businesses with diversified activities, enterprise income from these activities only accounted for up to a quarter of their FBI. On the other hand, enterprise income from diversification accounted for at least half of the FBI for 26% of diversified farms.

When at least 100% of FBI comes from diversification, this means that enterprise income from diversification was higher than the overall FBI, but the FBI was not negative overall. This occurs when another cost centre (agriculture, agri-environment, or direct payments) has negative enterprise income. The proportion of farms with at least 100% of the FBI coming from diversification decreased by 3 percentage points to 12% in 2024/25.

There were also more farms in the smaller brackets of Figure 5.3, compared to 2023/24, and the proportion of farms with negative enterprise income overall decreased by 8 percentage points to 20%. This was because, while average enterprise income from diversification increased in 2024/25, returns from agri-environment activities also increased; these both drove up average Farm Business Income (FBI). Therefore, diversification generally contributed to a smaller proportion of FBI in 2024/25 than in 2023/24.

Chapter 6: Survey Details and Technical Notes →