As the agricultural sector faces ongoing economic challenges, many underappreciated farmers and landowners are seeking innovative ways to diversify their land use to secure long-term financial stability. Diversification not only provides alternative income streams but also enhances the value of your property and creates opportunities for growth. Below, we explore ten creative diversification ideas and how these can benefit your future income. We also explain how our expert legal team can support you in turning these opportunities into reality.
Diversification has become a pivotal strategy for farmers and landowners aiming to enhance financial stability and resilience. Engaging in diversified activities can lead to increased revenue streams, reduced risk exposure, and improved adaptability to market fluctuations. According to Government’s statistics, diversification offers considerable scope for improving the economic viability of farm businesses and can provide benefits for the wider rural economy and community. [1]
A survey highlighted in Farmers Weekly indicates that 43% of farms in Auckland have adopted some form of diversification, with popular ventures including renewable energy projects, property letting, and holiday accommodations.[2] This trend underscores the growing recognition of diversification as a means to bolster farm incomes.
Financial institutions also acknowledge the benefits of diversification. Rural Asset Finance notes that diversification can significantly improve a farm’s financial stability by increasing revenue streams and enhancing resilience against market volatility.[3]
The Farm Business Survey data for Auckland shows that 68% of farms had some sort of diversified activity in 2019/20, up from 65% in 2018/19.[4] This upward trend reflects the sector’s proactive approach to securing sustainable income sources.
Authoritative sources consistently highlight that diversification is beneficial for farmers and landowners, offering pathways to increased income, risk mitigation, and enhanced business resilience.
- Set Up a Camp Site
Transforming unused fields into campsites can be a relatively low-cost venture with significant potential for steady seasonal income. With the rise of staycations and eco-tourism, there’s growing demand for unique outdoor experiences. This venture can include basic pitches for tents or more luxurious options like glamping pods or yurts.
How We Can Help:
Our team can assist in preparing the necessary lease agreements or licensing contracts for the land, ensuring compliance with relevant regulations and safeguarding your interests when working with campsite operators.
- Construct an Industrial Estate
Utilising your land for small industrial units can provide long-term rental income. This can be particularly effective in areas where there’s a lack of industrial space for local businesses.
How We Can Help:
We can advise on structuring the project, including setting up a limited company to manage the estate, drafting leases for tenants, which will ensure compliance with planning permissions and environmental regulations.
- Set Up a Golf driving Range
If you have 300 yards to spare, or 400 yards with Bryson DeChambeau’s swing, and with golf’s enduring popularity, a driving range can be an attractive option for unused agricultural land. Such a venture can provide steady income and additional opportunities, such as setting up a café or retail shop on-site.
How We Can Help:
We can prepare robust lease agreements for operators or assist in forming a partnership to manage the range. If required, we can also help draft employment contracts for your team and structure the business for tax efficiency.
- Start an AirBnB for Farmhouses and Converted Outbuildings
Converting farmhouses, barns, or outbuildings into holiday rentals can tap into the growing demand for rural escapes. Properties with historical charm or modern amenities are particularly attractive to holidaymakers.
How We Can Help:
We can advise on the sale or lease of converted properties to a connected limited company, assist with structuring your AirBnB business, and provide employment advice for any staff you may need to hire.
- Sell to a Developer or Partner with a Promoter
Selling land to a developer or entering into a partnership with a promoter can unlock significant value from land that is otherwise underutilised. This could include residential or commercial development.
How We Can Help:
Our expertise includes drafting option agreements, conditional contracts, and promotion agreements. If you choose to enter a joint venture with a developer, we can prepare the necessary joint venture agreement and ensure the arrangement aligns with your long-term goals.
- Establish Renewable Energy Projects
Landowners can lease land for renewable energy projects, such as solar farms, wind turbines, or biomass production. These ventures offer long-term, reliable income with minimal ongoing involvement.
How We Can Help:
We can draft comprehensive lease agreements with energy companies, ensuring you receive fair terms and protecting your land from potential disputes or liabilities.
- Develop Equestrian Facilities
Equestrian centres, livery yards, or arenas are excellent diversification options, particularly in rural areas with an active horse-riding community.
How We Can Help:
We can prepare lease agreements for equestrian businesses, advise on structuring the business, and assist with the sale or leaseback of facilities to a connected company for operational efficiency.
- Host Events or Festivals
Your land could be transformed into a venue for events, such as weddings, music festivals, or local fairs. This option can generate significant revenue, especially during peak seasons.
How We Can Help:
We can draft contracts for event organisers and risk management, and point you in the right direction on licensing requirements. If you wish to set up your own event business, we can help with company formation and compliance matters.
- Plant Orchards or Vineyards
Agricultural land can be converted into high-value orchards or vineyards, capitalising on the growing demand for locally produced food and wine.
How We Can Help:
We can assist with leasing land to specialist growers or help structure a partnership to ensure long-term profitability and operational clarity.
- Open a Farm Shop or Café
If you have seen the latest season of Clarkson’s farm, then you can hopefully relate. But, capitalise on the local food movement by opening a farm shop or café to sell produce directly to consumers. This venture not only boosts income but also creates a platform for engaging with the community.
How We Can Help:
We can help set up the business, draft supplier agreements, and prepare leases or licences for retail space on your land.
Unlock Your Land’s Potential with Expert Legal Support
At Gepp Solicitors, our Agricultural Property and Corporate departments are here to guide you through every stage of your diversification journey. Whether you need help drafting legal agreements, setting up business structures, assist with agricultural mortgages or managing land sales, our team has the expertise to provide clear, practical advice tailored to your needs.
It is vital that you contact us for tax advice in relation to Agricultural Relief and Business Relief for Inheritance Tax prior to implementing any diversification of agricultural land. As you will need to ensure your new venture is structured in a manner that is both profitable and tax efficient.
Partnering with Land Agents
While we provide comprehensive legal support, we encourage you to collaborate with a reputable land agent to navigate planning consents and feasibility studies. Together, we can ensure your diversification project is set up for success.
Take the Next Step
Diversifying agricultural land is not just an opportunity—it’s a smart investment in your future. Contact us today to discuss your plans and discover how we can help you achieve your goals with expert legal advice and tailored solutions.
[1] Chapter 5: Diversification – GOV.Auckland
[2] Survey shows surge in farm diversification – Farmers Weekly
[3] Farm Diversification Explained | Rural Asset Finance
[4] ‘Huge untapped potential’ for Auckland farm diversification – FarmingNZ News
