The Chancellor George Osborne's announcement in the Autumn Statement that the government will increase the Annual Investment Allowance for plant and machinery has been praised by a leading agriculture specialist.

The allowance has been increased ten-fold from £25,000 to £250,000; a raise which will come into effect in January 2013 for two years.

“This is very good news for the many farmers and countryside businesses looking to invest in new ideas and diversification,” said Nigel Parson, managing director of rural logistics firm Landmark Systems.

Diversification accounts for £360 million of farmers income every year, with around half of the UK's 56,000 farms conducting some form of diversified activity.

Parson added: 'Our view is that this will act as a welcome stimulus for the rural economy at a time when identifying and developing new income streams is increasingly important.”