How glamping, property and energy helped future-proof a farm business
- Credit: Chris Hill
When Luke Paterson took on his family's farm five years ago, he could not have predicted the economic shocks which were to follow.
But despite Brexit, harvest disasters and a worldwide pandemic, the business has thrived - thanks to a diversification strategy which has equipped it with new incomes and the resilience to ride out the storms of an ever-changing industry.
Mr Paterson is the fourth generation of his family to farm at Dilham Hall, near North Walsham.
He bought his brother Joe out of the business in 2016 - a move which itself was only possible due to the security of income from his brokerage firm Paterson Ag, which recently celebrated its tenth anniversary.
Since then, recognising the volatility of traditional agriculture, he has added grass liveries, a pig-fattening enterprise, canal-side camping, canoe hire, 10 glamping pods at Tonnage Bridge, commercial buildings and planned residential conversions.
Tourism now accounts for almost a third of the farm's revenue, and the newest additions - luxury couples-only retreats at Broad Fen - opened in April ahead of much-anticipated post-lockdown demand. Another disused barn is earmarked for renovation as a swimming pool.
The arable operations have also been overhauled, now growing maize and rye for the nearby anaerobic digestion energy plant at Scottow - a low-risk venture with guaranteed contract prices.
And even though the Covid-19 lockdown hit the tourism revenue hard, the revival of Dilham Hall Retreats is now expected to overcome the next financial challenge - replacing the loss of 11pc of the farm's income as the EU system of Basic Payment Scheme (BPS) subsidies are phased out after Brexit.
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"There is more diversification to do and we must not rest on our laurels, but I feel the business is in a good place currently to deal with the removal of BPS," said Mr Paterson.
"Our BPS is just shy of £90,000. But this has been on the horizon for a while, so it should not come as a surprise. It would be nice if we knew what ELMS (the replacement Environmental Land Management Scheme, still under development) is going to look like, so I have put the farm's hat in the ring for the Sustainable Farming Incentive pilot so we can find out more.
"But we do know that BPS is going, so that's about 11pc of our income about to go. But tourism growth will replace that. Tonnage Bridge will do that on its own. I never thought I would find a silver bullet to sort out BPS, but Tonnage Bridge is probably it."
Mr Paterson said the family succession was helped by the his brother Joe's "desire to keep the farm together" - but he quickly found that his initial calculations had not accounted for uncertainty.
"When I did my sums, we had just had harvest 2014 and 2015, both vintage years which was amazing," he said. "I did all my numbers based on that and then walked into harvest 2016 having borrowed quite a bit of money and I knew that this just isn't going to add up."
As well as the tourism and property diversifications, the switch to energy crops was also prompted by a need to reduce business risk. Mr Paterson runs the Paterson Farming Partnership, which grows about 1,000ha of maize and rye for the nearby AD plant at Scottow.
"I realised I need something where I could get a long-term contract," he said. "I wanted to write a five-year budget. Try doing that for growing conventional crops - you don't know what the price or yield is going to be.
"With the maize I can tell you now, give or take, what my farm profitability is going to be in five years' time. So it gives me a lot of security and takes a lot of risk out of the business, which has allowed us to redeploy capital that was in machinery into the glamping enterprises.
"And the icing on the cake is that we have freed up two 10,000sqft grain stores, one of which is currently in for planning to be five residential properties, and one has just been converted into a commercial unit."
The farm is also proud of its environmental credentials. It includes a two-mile canal, a 36ha site of special scientific interest (SSSI) at Broad Fen, and runs a Mid Tier Countryside Stewardship scheme. Recent surveys recorded more than 1,000 trees, and concluded that the farm overall is carbon negative.
The energy crops also play a part in this sustainability, requiring no insecticides or fungicides to grow and returning digestate by-product to the land, along with organic manure.
- The Royal Norfolk Agricultural Association is due to hold a members' tour at Dilham Hall Farms in mid-July. More details will follow when confirmed.