Diversification

Having a diverse crop rotation is not only good for the soil; it’s also good for your bank book. By growing a number of crops (or having multiple sources of income), you are less vulnerable. For example, if a wet fall prevents you from being able to harvest your soybeans, your total income won’t drop too much if you managed to harvest and sell wheat, hay and meat birds.   Diversity also protects you if the market crashes (or is saturated) for one of the crops.

Diversification options should take advantage of underutilized skills, labour, resources and capital assets like equipment or buildings.  New opportunities should compliment existing products and fit within existing channel.  Rotations, nutrient cycles and land stewardship should all be considerations in diversification decisions.  Off-farm investments and income should also be weighed in the analysis.  Each new enterprise should be analysed and planned on their own and as part of the whole operation.

The risk of growing too many products is that may be difficult to develop markets for all of them, particularly since you may have small volumes of each.  Each crop may also require time, equipment and expertise.  Diversification can cause management time to be spread too thinly, leading to problems.

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