For example, one section of the British Department for Environment, Food and Rural Affairs (DEFRA) defines diversification as “the entrepreneurial use of farm resources for a non-agricultural purpose for commercial gain”.
The great majority of diversification activities simply involved the renting out of farm buildings for non-farming use, but 9% of farms had become involved with processing or retailing, 3% with provision of tourist accommodation or catering, and 7% with sport or recreational activities.
In making decisions about diversification farmers need to consider whether income generated by new farm enterprises will be greater than the existing activities, with similar or less risk.
While growing new crops or raising animals may be technically possible, these may not be suitable for many farmers in terms of their land, labour and capital resources.
The United Nations Food and Agriculture Organization (FAO) has been one of the development organizations promoting diversification by small farmers and has produced booklets identifying beekeeping, mushroom farming, milk production, fish ponds and sheep and goats, among others, as diversification possibilities.