DIVERSIFICATION is not the answer to every farmer's problems.

"It is being promoted by all and sundry as the answer to farmers' ills, but it certainly is not that," said Mr Nick White of the North Yorkshire farm diversification initiative.

"It can help certain people in certain circumstances but it is not a panacea."

He was addressing up to 100 young farmers at a meeting organised by the Northern Dales Meat Initiative at the Royal Derwent Hotel, near Consett.

Mr White warned that it took time to develop a new idea and a great deal of enthusiasm was needed to build it up and take it forward.

"You need to be able to deal with officialdom, with planners and bankers because you may need funding," he said. "You need to be able to market your project or services, to market yourself and to know your customers."

The existing business should be closely examined to see how it was performing and what were its strengths and weaknesses.

Mr White recommended seeking advice from the small business service or farm business advisers and a key point was to realise that any diversification required change.

"You have to ask if you are prepared to change, do you want to," he said.

Over the last two-and-a-half-years his service had received 500 inquiries; 30pc submitted applications, and 75pc of those were successful. These involved some 30 direct marketing activities, eight leisure and eight manufacturing, others were for business units and 15 were equestrian activities. A further 25 were for collaborative ventures

"We are worried that the equestrian market may become saturated in certain areas," said Mr White.

In the Northumberland area, grants totalling almost £493,000 had been given, which had drawn down a further £1m in investment and created 88 jobs. Each job cost about £5,600 and the average grant was £14,000.

Mr White repeated his plea for anyone considering diversification to seek advice at an early stage. "The underlying business must be soundly structured if it is to carry something else," he said.

New schemes would require any grant to be spent within a year. "I think MAFF finds that scary; they are not sure how it is going to work because outside things can delay plans," he said.

Mr Kevin Bewsher, Lloyds TSB head of agriculture, also urged farmers with problems to talk to advisers and their bank at an early stage: "You need to act quickly; now is not the time to put things off. You should have a business plan which is a working plan and which is regularly checked.

"But I am an optimist and I honestly believe that for most people in farming there is a future but they will need to make some adaptations.