Ref. 15277-48NEARLY three quarters of farmers in Wiltshire and the South West are planning to diversify to broaden their income streams, according to the latest farming survey by Lloyds TSB.

The bank's research, which shows that the region's farming industry is gradually regaining its business con- fidence, has highlighted how farmers, determined to make their assets work harder, are now diversifying into non-core farming activities.

The most popular forms of diversification include conversions of redundant cottages and other buildings to residential or holiday lets, farm building lets for other business uses and horse-related initiatives.

Said Dick Mason, Lloyds TSB senior agricultural manager for the South West: "Among all farmers in the survey , the percentage forecasting profits for their farms has climbed steadily from 57 per cent for 2000 to 68 per cent in their estimates for 2004.

"And the level of optimism is particularly strong among younger farmers," he said.

Sarah Smith and her husband Joe, both in their 30s, are typical of the new breed of farmer.

The owners of Redland Farm, Wanborough, know all about diversification.

Said Sarah: "We're business people at the end of the day. The days of the quaint farmer have long gone.

"To continue farming in the economically depressed climate that we're in, farmers are having to toughen up and look at new markets."

Which means considering business alternatives that can maximise the use of a farm's assets.

Explained Sarah: "We've diversified by moving into leisure and sport, opening a microlight club, a parachuting and sky-diving club and we're about to launch a flying school, as well as hosting office parties at Christmas.

"It's all about using our assets so that we can maximise the farm's income."

Added Mr Mason: "The survey also suggests the message about the need for more business planning is finally getting through.

"There has been an increase in the proportion of farmers who have drawn up a detailed budget or business plan and a steady 90 per cent who now use their accountant for business advice," Mr Mason said.