How to start a farm business

Amid post-Brexit uncertainty, supply chain issues, a looming recession, rising fuel and energy costs and a critical shortage of seasonal agricultural labour, is now the worst possible time to consider starting your own farm?

It’s not all bad news. But, if Clarkson’s Farm has taught us anything, it’s that even the best-funded among us can come a cropper in this most challenging of industries. With EU subsidies gone and the government being pushed to support the UK farming infrastructure even further, the future of the industry is never far from the headlines.

There’s no avoiding the facts on the ground – farming can be a brutally tough line of work to make a success of. But, potential profits are there, provided you plan carefully, understand the upfront and ongoing costs, and know exactly what you’re getting into.

Below, we’ll take you through the obvious and not so obvious costs, such as machinery, land, and property, as well as other considerations such as marketing and location, so you can get started on setting up your own farming business.

What does the farming industry look like today?

Farming incomes were hit hard by the start of the coronavirus pandemic, and they have struggled to recover since.

According to ONS figures, released in 2021, the Total Income from Farming is estimated to have fallen by £768m (-15.7%) from 2019. That’s the lowest value since 2007.

However, COVID-19 is not all to blame. The report outlined that, of the income lost, adverse weather conditions had cost the industry £999m as a dry season threatened wheat and potato production.

Brexit has also played havoc on UK farms. Supply chain issues caused by a lack of HGV drivers meant that many farmers were reportedly pouring fresh milk down the drain as no delivery drivers were able to collect produce.

The UK government is responding to the issue. As part of a new grant scheme to help revitalise the sector, and bring in more innovative and sustainable solutions, it announced it will pay older farmers up to £100,000 to retire.

However, more government support will undoubtedly be needed to aid farmers as they deal with the fallout of these various business challenges over the next few years.

Training and regulations

While there isn’t one set route into running your own farm business, it’s useful to know which training you may need to complete, as well as what regulations you’ll need to abide by.

What are the skills needed to become a farmer?

Organisation – when you’re running a farm business, it’s likely that you’ll wear many hats, with varied tasks including working out on the land, completing paperwork or overseeing staff. To do this, you’ll need to be able to keep on top of multiple areas of the business at once, plus know how to prioritise tasks accordingly.

Management – although you may be starting a small farm from scratch, it could become a farm that employs one or two team members. Then, in time, your business may grow to be a much bigger operation, requiring you to manage more and more team members. You’ll need the ability to motivate staff and match the right people to the required work.

Fitness – working on a farm often involves physically demanding tasks. Even though your skills might be more in line with the behind-the-scenes office duties, you’ll still need to know about the day-to-day operations of a farm business, especially in the early days. Ensure you’re physically strong and healthy enough to manage the demands of running a farm.

What training is required?

To manage a farm, you should have:

• Practical experience – before opening your own farm business, it would be wise to have some real-life experience on a working farm to understand how this type of business works. If you’re still in full-time employment, consider volunteering on a farm at the weekends.
• Driving licence – whether it’s getting from one side of the farm to another, or transporting goods into town, knowing how to drive can be essential.
• Formal qualifications – while not mandatory, it can be useful to have completed more structured training too, such as a diploma, apprenticeship or degree in an agricultural subject. Alternatively, qualifications and experience gained in other sectors could be transferred to managing a farm business too.

What regulations do you need to comply with?

There are many laws and regulations that you’ll need to know about, and consequently abide by, when opening a farm. Which rules will apply to your business will often depend on the type of farm you operate.

Generally, you’re expected to comply with health and safety regulations, as well as laws that govern how the animals and produce you farm is reared and supplied. This includes:

• Planning permission – this is governed by your local authority and is usually applicable if you want to change what you use your farm or land for, or to build a house.
• Farm vehicles must be registered with the Driver and Vehicle Licensing Agency (DVLA) and meet health and safety requirements.
• Land used for agricultural purposes should be registered with the Rural Land Register.
• If your farm creates milk products you need to register with the Food Standards Agency (FSA), which is the organisation responsible for ensuring food safety in the UK.
• Health and safety – you’ll need to be aware of, and follow guidance on health and safety on farms from the Health and Safety Executive (HSE). This includes conducting risk assessments where necessary, such as assessing the safety of using buildings or hazardous chemicals, as well as handling livestock.
• Food standards and accreditations – to ensure food is of a high quality and traceable (Red Tractor), or to ensure organic farming methods have been used (Soil Association organic certification).

Types of farm businesses

When you think about starting a farm, it’s easy to be overwhelmed by the possibilities. In this section, we’ll break down some of the different types of farm businesses, and offer practical advice to help you decide which is best for you.

How to get started in farming: Glossary

There are a lot of words and phrases used in the farming industry specifically. Here we offer a quick guide to the ones you’re most likely to come across.

Utilised agricultural area (UAA) – land used for agriculture purposes, including arable land, permanent grassland and crops, as well as kitchen gardens

Arable land – land that can be ploughed, cultivated or farmed on

Pastoral land – used for raising animals

Mixed farming – land that is used for both arable and pastoral farming

How to start a poultry farm business: Key points to consider

• Decide if you want to run a farm that rears chickens for eggs (layers) or for their meat (broilers)
• Consider how the chickens will be raised – in barns or free-range?
• Assess what type of poultry you will farm – chickens may be more popular, but it’s also possible to rear ducks, geese and turkeys on a poultry farm too
• Think about the equipment you’ll need to keep your poultry safe in general, and protected from predators

How to start a vegetable farm business: Key points to consider

• Consider what type of vegetables you want to grow, and check if it’s possible on the land and soil you’re planning to farm on
• Think about what type of irrigation system you’ll use to water your vegetables
• Decide if you’ll grow organic or non-organic produce – be sure to get the required accreditation if you’re intending to grow the former
• Assess how many different varieties of each vegetable you want to grow, in addition to the number of different types

Some examples of other types of farms include:

• Dairy – rearing cows or goats to produce milk for sale
• Cereals – growing crops such as barley, oat and wheat
• Pig – rearing pigs indoors or outdoors for pork products
• Fruit – growing apples, strawberries or raspberries, for example

Costs

At this stage, you’ve got a good idea of what’s involved in opening a farm, so you’re probably wondering how to run a farm as a business. In this section, we’ll examine the costs involved, and how much you could potentially earn.

How much does it cost to start a farm business?

Buildings and outbuildings – while your farmland may come with buildings already, you’ll need to ensure they match your farming requirements. Similarly, you may need to extend or add outbuildings or other structures as your farm business expands, so be sure to factor these costs into your budget.

Equipment – the equipment you need will depend on the type of farm business you decide to start, as outlined in the section above. Find out if you need to buy the equipment, if it’s possible to rent the items that you need, or if you can get them second-hand. Read our page on farm equipment for more detailed information about the costs involved.

Land – this will be one of the major costs of starting your farm business. While land is often inherited, that’s not the only option: it’s also possible to buy or rent farmland in the UK too. You’ll need to consider how much land you need for the crops or livestock you intend to farm.

How much does land cost?

The average value for arable land in the UK, according to a 2021 report by Carter Jones, is £8,450 per acre. For pasture land, it’s £6,744 per acre.

That means the cost of the average UK farm size of 87 hectares would be a little over £1.8m, based on arable land costs.

Insurance – there are a number of ways in which you should protect your farm business, and taking out adequate business insurance policies is key. You’re likely to need contents insurance for your equipment, as well as building insurance for your property.

Similarly, consider business interruption insurance to cover your business should you be unable to operate. If you take on staff, you’ll need employers’ liability insurance too. Ensure you find policies that match the requirements of running a farm specifically.

Potential earnings

It can be difficult to give an indication of how much you would expect to make from your farm business, as there are a lot of variables to take into account. These include:

• What crops or livestock you farm
• How many income streams you have – diversifying your farm’s offering may help to increase your earnings (see below for more information)
• Schemes you participate in, such as subsidies and environmental schemes

How much farming experience you have, as well as national and international politics, can all affect demands for farming – and in turn, earnings. Plus, weather can also have a big impact on harvests from year to year.

Promoting and expanding a farm business

After the initial set-up, next it’s time to think about how to grow your business. In this section, we’ll outline some of the best ways to promote and expand your farm business.

Whichever ways you decide to market your farm business, ensure you have your target audience – the customers you’re trying to appeal to – at the forefront of your decision-making process.

Social media

While your farm may be located in a rural area, don’t let geography stop you from using social media to reach out to people, both within your local community and further afield.

Decide which platforms work best for your business: Instagram and Pinterest are highly visual, and can let people see what’s happening on your farm.

By contrast, LinkedIn and Twitter are text-based, so they’re ideal for positioning you and your farm business as an industry leader through sharing articles or joining forums. Facebook has a range of features, although its messaging function could be ideal for responding to customer enquiries.

Website

You’ll need to create a website so that people can easily find information about your farm online, as well as ensuring that you have somewhere to direct traffic to from your social media posts.

A website should have key information about your farm, such as contact details, as well as information about your team members and your produce.

Initially, you could use a website builder to create your own website. As your business develops and your website requirements become more complex (whether that’s a booking form for farm visits or an e-commerce store to sell your goods, for example), you may need to hire a professional web developer.

Industry events

Trade shows, association events and networking sessions all offer opportunities to further promote your farm business.

Connect with other attendees at these meetings to develop a network of farming industry professionals, as well as those that work in related sectors. Be sure to bring your business cards!

Traditional marketing

While it’s important to have an online presence, don’t dismiss traditional marketing. Some ways of promoting your farm offline include:

• Brochures and leaflets – you could distribute them at community halls and local amenities, for example
• Print ads – promote your farm in local or regional newspapers and magazines, as well as trade publications
• Radio – create a jingle or ad yourself, or with an agency, to promote your farm on radio stations and country shows relevant to your target audience. This could be especially useful to reach those customers who also live in rural areas, and who may be unable to easily access the internet due to poor signal strength

How to expand your farm business

In time, you may want to consider expanding your farm business, such as through diversifying your offering. Some examples include:

• Opening a farm shop
• Providing accommodation, such as a bed and breakfast or camping ground
• Growing non-food crops e.g. flowers or flax
• Rearing certain species of goats, rabbits, sheep or alpacas for their wool

Be sure to review if your farm has the capacity to diversify as well as maintain your primary business function. Plus, find out if any additional regulations or legislations will apply to your new intended production.

Read the Gov.uk guide on diversifying farming business for more information.

What are the next steps?

By reading this article, you’ve gained an understanding of how to start a farm business, including what training and regulations you’ll need to complete and follow, as well as some of the potential costs and earnings. We’ve also looked at different types of farm businesses, plus how to promote and expand your business.

The next step is to get your business starting off in a strong financial position. Our online comparison tool gives you quotes from the best business loan providers in the UK in just one minute.