Budget boost for farm diversification

The Chancellor’s Autumn Budget Statement has delivered a much needed boost to the diversified farm sector, according to a leading industry expert.

Nigel Parsons, MD of rural business information specialists Landmark Systems, said that the announcement yesterday of a ten-fold increase in the Annual Investment Allowance for plant and machinery would be widely welcomed by the sector.

“This is very good news for the many farmers and countryside businesses looking to invest in new ideas and diversification,” he said.

“It will allow those thinking of making a significant outlay to claim 100 per cent of their capital allowances against their earnings on up to a quarter of a million pounds a year.

“Our view is that this will act as a welcome stimulus for the rural economy at a time when identifying and developing new income streams is increasingly important.”

The Chancellor made the decision to increase the allowance from £25,000 to £250,000 yesterday. It will come into force from January 2013 for two years.

Around half of the country’s 56,000 farms have some form of diversified activity and diversification accounts for £360 million of farm income each year.

In nearly a quarter of farms with diversified activity, income from the diversified enterprise exceeded that from the remainder of the farm business.