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Diversifying income opens new doors

Published: 21 November 2016

Not every farmer is born into the business, and the challenges for newcomers can be daunting. The Morgan family, however, have proved that being flexible, working hard and knowing when and how to seek outside help can lead to success.

Twenty years ago, Lucinda and Peter Morgan were both in full-time jobs, but had other dreams. The couple’s vision was to create a viable family farm where their three children could grow up and eventually run their own businesses. At the time, they took on just 40 sheep on 50 acres of rented land. Today, they run more than 320 acres and manage thriving egg, sheep and beef enterprises at Dunstars Farm near Cowbeech in East Sussex.

Having started from scratch, the couple still believe it’s possible for new entrants to build their farm business – but it’s not an easy ride.

Their children – Angus, Duncan and Georgina – have been involved from a young age and have their own responsibilities on the farm as well as active lives at school and in local sports clubs.

Small-scale, big on potential

“You have to play to your strengths,” stresses Peter. “Lucinda has a degree in agriculture from Harper Adams University in Shropshire, and is the day-to-day livestock expert. She also markets the eggs, is a school governor and a Pony Club event organiser – she works very hard. I do the heavier manual work, the tractor-driving, new projects such as new land, managing finances and so on. It’s a team effort every day.”

The Morgans believe that aside from hard work, success comes from getting good professional support and having alternative sources of income. Their route was to choose relatively small-scale enterprises that needed only low levels of capital and could be gradually developed.

In the first years, Peter and Lucinda used their salaries to build the farming business. Not only did this external income take the pressure off the new farm, it provided assets to borrow against. They took advice from local agents Batcheller Monkhouse, who helped them prepare their loan applications. Thanks to AMC’s deep understanding of the realities of agricultural businesses, the company was happy to use these other sources of income as security when agreeing to lend to the Morgans.

The couple proved their resourcefulness by taking on redundant land that needed work to get it back into agricultural use – often in lieu of paying a commercial rent. Then, in 2003, they bought the 75-acre Dunstars Farm, which gave them a secure base alongside other land rented on long-term farm business tenancies.

“A fair portion of our land is still under gentlemen’s agreements,” notes Peter. “Trust is a strong part of farming and the support and advice we’ve had from local farmers and landowners has been crucial.”

Even as the farm became more established, the Morgans continued to spread their risk, setting up marine engineering firm Helmsman Systems in 2010.

Changing course to stay the course

It’s an example of a sharp eye for opportunity and of a pragmatic approach to the business. They are very conscious of costs, margins and market trends for their various income streams, and don’t hesitate to change course. The dairy-bull beef enterprise they ran for 10 years, for example, was based on taking animals others weren’t willing to rear and selling them on to a local farmer at 17 to 18 months of age for finishing. But, with margins tightening, they decided to move into suckler beef instead, breeding and rearing their own Continental-cross store cattle.

Peter says they aim for higher-value markets where possible, such as the free-range Dunstars Eggs that are sold to local retailers.

“But,” he says, “we could move away from this if the market doesn’t hold up. Being sentimental doesn’t pay the mortgage. It’s the same as when we took our flock of Welsh Mule Suffolk ewes from 40 to 750 then took them back down to 400 as we got to understand the margins and markets better and to adapt to changing family circumstances. With fewer but better quality cattle, the sheep numbers will be going back up over 500 – sheep are well suited to the Wealden landscape.”

At the time of writing, the family was about to leave the mobile home they’d lived in for two decades and move into their own new farmhouse, funded by another loan from AMC and built with Agricultural Tied Dwelling status at Dunstars Farm. The agricultural needs test for securing its status as a farmhouse was challenging, not least because of the continual reinvestment in the business. Their livestock numbers helped their case.

“We needed to provide a set of accounts proving the viability of the farm business – our agents were very important in portraying this,” explains Peter. “It’s also important to accept that, even for our size of farm in this part of the world, diversified income will carry on being a fact of life. All our farmer neighbours have secondary businesses – whether that’s a farmshop, contracting or selling farm supplies. So, while we now have the life we want and firm foundations for the future, we can’t afford to let those extra income streams go any day soon.”

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