The best alternatives on the farm use your existing assets. And if you own your own land, it's probably your most valuable asset. So why not make money with it? The theoretical contribution of this article is a segmentation of agricultural companies that makes it possible to distinguish between different attitudes towards non-agricultural incomes and the adoption of renewable energy sources. The descriptive statistics of the survey show that 62.7% of the respondents were dedicated to non-agricultural incomes.
With a varied landscape, Wales is rich in resources in terms of wind and water and a suitable place to develop many different forms of sustainable energy. The general findings highlight the capacity and willingness of farmers to diversify despite the significant challenges faced by the rural economy. External environmental barriers include planning restrictions, such as those of Respondent C, whose farm is located in a national park, regulations and uncertainty in the industry, particularly in relation to Brexit, which discourages farmers from investing. Policies could seek to encourage higher levels of innovation in both types of farms, especially in group 4, where the farmer tends to be younger than in group 3.Respondents recognize that the abundance of natural resources that exist in Wales provides opportunities for farmers to diversify towards renewable energy; however, the type of renewable energy adoption varies depending on the specific conditions of the farm.
Significantly, for these respondents, renewable energy activities on the farm generate high profit margins, which increases the attractiveness of investing in such activities. Strategies for this type of farm could focus on developing diversified sources of income through renewable energy, since the farm already has renewable energy sources. The generation of renewable energy could be a solution to these factors of diversification and this form of entrepreneurship can be fundamental to the resilience of the family agricultural business, since it allocates resources far from the main production of food (Vik and McElwee, 2011). Two-step cluster analysis was chosen instead of alternative clustering methods, since it does not require specifying in advance the number of clusters needed to segment the sample.
Some of these statistics are biased by large commercial projects; however, regional variation is also influenced by local resources and planning regulations. The opportunities in the adoption phase are for farms to make the most of their resources to innovate and adapt to changes in the industry. Government policy could encourage these types of farms to expand these activities, in particular through favourable regulated rates. Cluster 1 represents a large highland cattle and sheep farm with no diversification activities, but with access to renewable energy.
The research presented in this article reveals the desire of Welsh farmers to seek non-farm income opportunities to supplement agricultural incomes.