How UK Farmers Are Diversifying to Boost Their Incomes

While the recent global economic crisis has had a profound effect on many UK industries, livestock farmers have been dealing with major economic set-backs throughout history, with instances such as the BSE epidemic in the mid-80s - and outbreaks of diseases such as foot and mouth, TB and swine fever - being most memorable for those of younger generations.

Consequently, over the last two decades farmers who had previously relied on livestock as a major part of their income have diversified in order to ensure more financial stability for themselves and their families - and this diversification trend has led to a number of intriguing developments and projects on UK farms. At an April 2009 Agrical conference paying host to many industry experts, it was estimated that 50 percent of UK farms have now diversified.

Perhaps unsurprisingly, a number of farmers located in regions popular with tourists are finding considerable success with offering Bed & Breakfast and holiday home facilities. This is a trend that is particularly popular with those who have buildings free for conversion or sufficient space to develop on unused land - and these are often the prevailing factors which make rural farms ideal locations to cater for tourists.

The Henly family at Bucklawren Farm in Looe, Cornwall are a prime example of making new use of both existing buildings and the land that surrounds them. They have converted barns and stables into five self-catering cottages within their farm grounds just a mile from the beach. In addition the farm now also boasts an acclaimed restaurant which prides itself on locally sourced produce.

Despite the popularity of appealing to couples and families, other farmers in the South West are offering more niche facilities to visitors in the area. Woodland Valley in Ladock is owned by Chris and Janet Jones who, after the Eden Project opened in 2001, decided to open residential facilities for visiting school parties.

This has since developed into a study centre for those with an interest in farming, sustainability and ecology - a more economical use for their own stone buildings which 'were no longer suitable for modern farming.' Much like the changes at Bucklawren, the need to diversify has had more than an economical effect on the workings of the farm itself - and has even stimulated its conversion to being fully organic.

Despite the positive economic outcomes of diversification, this increasing trend does bring new considerations such as public safety and holiday home insurance to the fore - at the same time as maintaining a working farm. The number of farmers looking to follow the footsteps of Bucklawren and Woodland Valley Farm by making the most of their land and buildings in a 21st Century context is set to carry on growing - with farms in other parts of the country allowing the use of their land for music festivals and sporting events also.

Farm diversification has arrived and is here to stay.

Cornish Mutual offer tailored farmers insurance, buy to let property insurance and holiday home insurance for property owners in the residential and holiday lettings markets in South West England.

Warning over insurance cut-backs

Businesses and homeowners in the South West are being warned against cutting back on insurance in a bid to save money or risk being left underinsured should the worst happen.

“Some savings could prove to be far more costly in the long run,” says Chris Ridgers from regional insurance firm Cornish Mutual, “If you cut back on your insurance policy, when it comes to the crunch and you need to make a claim, you could run into trouble and find you’re underinsured or worse still, end up in front of an industrial tribunal.”

Some business and domestic insurance policies have legal requirements attached to them – for example, legal liability for damage to the property of others or injury to them, where compensation awards and legal fees run into hundreds of thousands of pounds – reducing cover here can be unwise. In the case of employers’ liability and motor third party insurances, there is compulsory insurance legislation to be taken into account.

Chris, Business Development Manager with the company which has offices in Exeter and Truro, adds: “The best advice is to check your cover and policy details carefully, get a second opinion if necessary and make sure you look at all your options. The important thing is not to leave crucial cover to lapse and make sure you have everything you need but are not underinsured – check the level of insurance purchased.”

This comes as homeowners are also being urged not to forgo home and contents insurance, especially holiday home insurance in the south west following recent Government figures showing a four per cent rise in home burglaries during the last quarter of 2008.

Nick Starling, Director of General Insurance and Health at the Association of British Insurers, comments: “Many families will be looking to trim their budgets as the recession bites, but cutting back on home insurance is a false economy. Last year, insurers paid over 6,000 claims, some £7 million, every week, to burglary victims. Without insurance, becoming another crime statistic could plunge you deeper into financial trouble, from which it may take years to recover”.

Companies could legitimately save on some insurance costs by increasing their voluntary excesses for any loss or damage, reducing cover on low-value vehicles to third party, fire and theft, getting rid of flood cover where there is no likelihood of flooding and reviewing sums insured to reflect the basis of insurance, e.g. do they need to be replaced as new or current value figures and reviewing anticipated future income and margins to reassess loss of income protection.

Chris Ridgers adds: “Make sure your insurance provider is aware of your efforts in investing in health and safety or preventing accidents and losses – this could help reduce your premiums. Ask yourself what risks you are prepared to take and what do you want to transfer to an insurer. The overriding message is to find the best way of saving money without putting the future of your business on the line.”

Insurance risks for South West holiday homeowners

Hundreds of holiday home owners across the South West could be unwittingly flouting the law by not taking compulsory insurance cover on their properties this summer.

Regional insurance firm Cornish Mutual, which has Members across Cornwall, Devon, Somerset and Dorset, says many people may be unaware employers’ liability insurance is a legal requirement and holiday homeowners could face a costly claim or even a prison sentence if a member of staff is injured whilst working on or in their let property.

Latest figures* from the Health & Safety Executive show there were 28 fatal injuries to workers in the South West in 2007/08 and 2,337 reported major injuries in the region – Over two thirds (66%) were amongst workers in service industries.

Chris Ridgers, Business Development Manager for Cornish Mutual said: “Your employees may be injured at work and they might try to claim compensation from you if they believe you are responsible. It could be a cleaner who goes into the property on changeover day or a gardener you employ to maintain the property – anyone who’s working under your guidance and using your tools and equipment.”

Whilst public liability insurance is not a legal requirement, the cost of not having cover could amount to hefty claims from guests injured whilst staying in the property. With 20 per cent of all visitors to the South West choosing to stay in Self Catering accommodation**, it is important for property owners to make sure they have sufficient cover to guard against these risks.

Recent examples of claims experienced by Cornish Mutual include a guest who tripped over a step and fell onto a wood burner sustaining nasty burns and another guest who broke a number of bones after falling over a concrete mushroom in the garden. Other liability claims include damage to a property or its contents.

Malcolm Bell, Chief Executive of South West Tourism said: “We want all visitors to the South West to come to the region and have a safe and enjoyable time when they are here. There is so much to see and do in the South West and we are lucky to have some of the best self catering properties in the UK. Property owners need to make sure they do all they can to ensure their visitors enjoy their stay and this includes having adequate cover for their business.

“We would encourage property owners to take out public liability insurance to ensure they are covered should an accident happen.”

Iain and Gill Butterworth run specialist holiday homes letting agency ‘Holiday Homes & Cottages South West’, based in Torquay, Devon. Their Agency Agreement (legal contract between owner and the company) incorporates a declaration that the owner confirms that they have ‘adequate commercial public liability insurance’.

Gill added: “We recognise the importance of having insurance that is appropriate and offers the right level of cover. We, therefore, do not take on a new property before ensuring the owner has the right cover in place.”

Cornish Mutual’s Buy to Let or Let Property insurance products include holiday homes – this provides cover for buildings, contents and public and employers’ liability insurance. For more information visit www.cornishmutual.co.uk or call 0845 900 1288.

ENDS

*HSE, South West government office region (GOR), Statistics of occupational ill health, safety and enforcement 2007/08
**South West Tourism, South West Visitor Survey 2007

For more information, contact:

Melissa Ward
Cornish Mutual
01872 277151
mward@cornishmutual.co.uk
Visit the Cornish Mutual website at http://www.cornishmutual.co.uk