THE number of farmers diversifying to improve profits is increasing, according to research.

More than half the farms taking part in the latest survey by rural business advisors received income from diversification, compared to only a third last year.

The report, by the Institute of Chartered Accountants found that farm diversification averaged 15 per cent of turnover and those farmers who diversified tended to be more profitable.

The findings are based on replies from 337 members of the Institute's Farming and Rural Business Group (FRBG) and other chartered accountants with farming clients.

More than ten per cent of those questioned were from the North-East. Seven per cent were from Yorkshire and Humberside.

Andrew Ayre, the FRBG's North-East spokesman, said: "With farmers continuing to rely so heavily on support payments, our survey confirms the view that more farmers are moving away from traditional farming to seek alternative enterprises to boost profits.

"The move towards diversification is a significant trend, with a vast majority of farmers now either receiving diversified income or considering alternative activities, compared to fewer than one in five just a few years ago."

The survey found that more than eight out of ten farmers were looking for alternative enterprises, such as land and property rental, contracting, holiday accommodation and farm gate sales.

Mr Ayre said: "As a high proportion of farmers will be retiring in the next five years, those entering the farming industry can look forward to a very different future."