Let buildings were the most popular and the most profitable choice
Income from farm diversification was £580m in 2016.
Letting buildings for non-agricultural work was the most popular and profitable choice, with an average income of £17,400 per farm. On farm processing and retail of farm produce had an average income of £9,600 per farm.
The Farm Business Survey (FBS) published by Defra showed 32 per cent of total farm business income comes from diversification.
Renewable energy was the second most popular diversification and 23 per cent of farms now produce ‘green energy’ up 5 per cent year on year as farms 'raced to get renewable activities online before reductions in tariffs came in'.
The average income from farm diversification was £16,600 last year but Rachel Lawrence at FBS said the full picture is much more complicated.
"For over a quarter of businesses with diversification, this income actually exceeds what is being generated from the rest of the farm business.
"However for 4 per cent of farms their diversification activities actually lost money.
"We are seeing diversification becoming an increasingly important aspect of farm income, especially as businesses look to reduce exposure to the volatility of agricultural commodities markets," she said.
"We expect these trends to continue as farms want to diversify reliance away from core agricultural activities."