AGRI-TOURISM DEVELOPMENT IN BRITISH COLUMBIA
by
Kathryn Joanne Lack
Bachelor of Arts, Simon Fraser University, 1995
RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF
THE REQUIREMENTS FOR THE DEGREE OF
MASTER OF NATURAL RESOURCE MANAGEMENT
in the
School of Resource and Environmental Management
Report No. 205
O Kathryn Joanne Lack 1997
SIMON FRASER UNIVERSITY
December, 1997
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Critical changes have occurred in Canada's agricultural sector over the last twenty-five years which have resulted in ewnomic uncertainty for .
many Canadian farmers. In response, some farmers have implemented a
diversification strategy into their business plans. The focus of this study is
on one type of diversification: agri-tourism. This study provides a profile of the financially successful agri-tourism operations in British Columbia and
notes the differences in operational characteristics between financially
successfuI and financially less successful agri-tourism businesses. The
study also compares the perceived constraints to agri-tourism development
between government agencies and farm operators and notes that the constraints varied between the groups. Several management strategies relevant to the study's findings are presented. The first strategy relates to farm operators pursuing economies of scope by maximising opportunities for visitors to spend money at the farm rather than maximising the number of visitors to the farm. The second strategy relates to agricultural/tourism associations, government support agencies, agri-tourism operators and other businesses organising strategic alliances to tackle the issues related to agri-tourism development.
iii In memory of my rnother
Alice Edith Chomey
(1922-1 985) ACKNOWLEOGMENTS
I could not have completed this research, if not for the help of many
people. I would like to take a moment and thank some of the people who , helped me along the way: Peter Williams for his practical suggestions, encouragement and good humour; Alison Gills for her critical reading and comrnents; Karim Dossa for his help with the statistical analysis; and to my father for finding more mistakes than I Gare to think about. And of course, I must express my love and most sincere thanks to my husband, Martin, and my children, Nathan and Rachel, whose continual sacrifice and support allowed me compete this project. TABLE OF CONTENTS
Approval Page...... ii
*.* Abstract...... III. .. Dedication...... iv
Acknowledgments...... v
Table of Contents...... vi
List of Tables...... xiii
List of Figures...... xv
List of Appendices...... xvi
Chapter 1 - INTRODUCTION
1.1 Rationale for Study...... 1
1.2 Purpose of Study ...... 4
1.3 Research Questions ...... 4
1.4 Methods...... 4
1.4.A Method One: Literature Analysis...... 5
T.4.2 Method Two: Questionnaire Suwey to Farm Operators...... 5
1.4.3 Method Three: Questionnaire Suwey to Support
Agencies ...... 5
1 -4.4 Method Four: Focus Group Research...... 5
vi
2.4.2.7 Pesonal challenges br hm~;lies...... 29
2.4.2.8 Conkt WHpninary agnculfural producbonn...... 29
2.4 2.9 Db&ne hmmahe& ...... 30
2.4.2.10 lnliasliucbre /im&tions ...... 30 .
2.4.2.1 1 Fam&ease ...... 31
2.4.3 Determinants of Success...... 31
2.5 Policy and Program Practices In Agri-tourism ...... 33
2.5.1 Financial Aid ...... 34
2.5.2 Technical Information ...... 35
2.5.3 Marketing Strategies...... 36
2.5.4 British Columbia's Agn-tounsm Policy ...... 37
2.6 Summary...... 38
Chapter 3 .METHOOS
3.1 Introduction...... 40
3.2 Research Questions ...... 40
3.2.1 Ptimary Research Questions...... 40
3.3 Rationale for Methodology ...... 42
3.4 Data Collection...... 43 . . 3.4.1 Study Objecfive...... 43
3.4.2 Survey Method #I- Questionnaire to Farm Operators...... 44
viii 3.4.2.1 Fam Operator3 Suwey Population...... 44
3.4.2.2 FmOpemtofs Research hsbument ...... 44
3.4.2.3 Fam Operafo/s Survey DesMn and Procedure...... 45
3.4.3 Survey Method #2- Questionnaire to Support Agencies ...... 47
3.4.3.1 Supporf Agencks 'Sufvey P opulation...... 47
3.4.3.2 Supporf Agencîès 'Research hsbument ...... 48
3.4.3.3 Support Agencks 'Quesbonnake Design and Pmcedure.... 49
3.4.4 Survey Mefhod #3 - Focus Groups...... 50
3.5 Limitations of Research Methods...... 51
3.6 Data Analysis ...... 52
3.7 Summary ...... 54
Chapter 4 .SURVEY RESULTS
4.1 Introduction...... 55
4.2 Definition of Sarnple and Sample Size ...... 55
4.2.1 Definition of Sample...... 55
4.2.2 Definition of Agri-tourism Businesses...... 56
4.3 Profile of Financially Successful Agri-tourism Operations ...... 57
4.3.1 Type of Farm ...... 57
4.3.2 Types of Activifies...... 57
4.3.3 Amount of Time Visitors Spent on Farm...... 59
ix 4.3.4 Months of Operation...... 59
4.3.5 Running the Agn-tourism Operation...... 60
4.3.6 Number of Years in Operation...... 61
4.3.7 Marketing Promotion...... 61.
4.3.8 Working with Other Business...... 62
4.4 Differences Between Agri-tourism Operations...... 62
4.4.1 Mode1 of DMerence...... 63
4.4.2 Geographical Location...... 64
4.4.3 Farm Business Size...... 65 ... 4.4.4 Types of Activities...... 66
4.4.5 Months of Operation...... 68
4.4.6 Number of Tounsts and Revenues...... 69
4.4.7 Number of Employees...... 70
4.4.8 Business Growfh...... 70
4.5 Support Agencies ...... 71
4.5.1 Support Agencies' Perceptions of Constraints...... 71
4.5.2 Farm Operators' Perceptions of Constraints...... 74
4.5.3 Cornparison of Constrainfs...... 75
4.6 Summary ...... 77 Chapter 5 .MANAGEMENT IMPLICATIONS
5.1 Introduction ...... 78
5.2 Economies of Scope...... 78
5.2.1 Economies of Smpe as a Management Strategy ...... 79 .
5.3 Strategic Alliances ...... 83
5.3.1 Strategic Alliances as a Management Strategy...... 85
5.3.2 Strategic Alliances behveen Agriculture and Tourism
Sectors...... -85
5.3.2.1 Issue: rnarkefng ag~.lounsm...... 86
5.3 .2.2lssue: prvâuct quafi& ...... 88
5.3.3 External Strafegic Parfnerships...... *.*...... 90
5.3.3.1 Issue: ob faihhg finanaal support ...... 90
5.3.3.2 Issue: fiabil@ management ...... 91
5.3.3.3 Issue: hihihg and educaaun ...... 92
5.3.3.4 Issue: reguf'aiians...... 94
5.4 Summary...... 96
Chapter 6 .CONCLUSIONS AND RECOMMENDATIONS
6.1 Introduction...... 97
6.2 Major Findings...... 98
6.2.1 Perceived Constraints to Agri-tourkm Development...... 99
xi
LIST OF TABLES
Table 3.1 .Statistical tools used in data analysis...... 53
Table 4.1 - Type of farm ...... 56
Table 4.2 - Distribution of agri-tourism businesses by gross revenues.... 56
Table 4.3 - Type of business...... 57
Table 4.4 - Type of agri-tourism activities...... 58
Table 4.5 - Amount of time spent on farrn ...... 59
Table 4.6 - Months of operation...... 60
Table 4.7 - Time spent running agri-tourism operation...... 60
Table 4.8 - Mean number of years in operation...... 61
Table 4.9 - Marketing activities...... 61
Table 4.10 - Partnerships with other businesses...... 62
Table 4.1 1 - Geographical regions...... 65
Table 4.12 - Difference in farm business size ...... 66
Table 4.1 3 - Difference in types of agri-tourism activities...... 67
Table 4.14 - Number of activities...... 68
Table 4.15 - Difference in months of operation...... 68
Table 4.16 - Customers: volumes and revenues...... 69 Table 4.17 - Difference in number of employees...... 70
xiii Table 4.18 .Business growth in 1995...... 70
Table 4.1 9 - Anticipated average growth in business in 1996...... 71
Table 4.20 - Initiatives undertaken by support agencies...... 72
Table 4.21 - Support agencies' perceptions of constraints...... 73 Table 4.22 - Farrner operators' perceptions of constraints...... 75 Table 6.1 - Determinants of a successful agri-tourism operation in BC ...... 98
Table 6.2- Top four constraints to agri-tourism development...... 99
xiv LlST OF FIGURES
Figure 2.1 .Extemal and lntemal Factors Affecting Farm
Diversification...... 18 .
Figure 2.2 - Agricultural and Structural Forms of Fami Diversification ..... 19
Figure 2.3 - Structural Diversification Continuum...... 21
Figure 4.1 - Factors Affecting Financially Successful Agri-tourisrn
Operations...... 63
Figure 4.2 - Geographical regions of British Columbia...... 64
Figure 5.1 - Factors of an Agri-tourism Experience...... 82
Figure 5.2 - Strategic Alliance - Building Stages...... 84 LIST OF APPENDICES
Appendix 1 - Capture the Opportunity - Fam based Business '96 - Survey...... A13
Appendix 2 - Agri-tourism and Value-added Processing Survey -1 996...... 1 17
Appendix 3 -Agri-tourism and Value-added Issue Workshop Summaries...... -123
Appendix 4 - Support Agencies Responses...... 132
Appendix 5 - Open- Ended Comments by Farm Operators on the Constraints to Agri-tourism and Value-Added Development...... 135
xvi CHAPTER 1
1.1 Rationale for Study
Agriculture is an important comerstone of Canadian society. Not only does this sector provide Canadian people with their daily sustenance, it also supports the Iandscape that encompasses Canada's historical and cultural heritage, contains and maintains the biophysical environment and contributes to outdoor recreation opportunities (Fraser Basin Management
Program, 1997; Bryant & Johnston, 1992). Regardless of these benefits to society, the role of agriculture in Canada has declined during the Iast half of this century (Pierce, 1994; Thompson, 1990).
Traditional rnethods of fam and business management are no longer viable and adapting to these necessary changes has created economic uncertainty for many farm operators (Pierce, 1995). As fam incomes gradually have declined, many farrn operators have reacted by incorporating a restructuring strategy into their business plans (Pierce,
1995; Bowler et al., 1992; Bryant & Johnston, 1992; Marsden & Munton,
1991).
One type of restructuring strategy is fann diversification. This strategy involves shifting resources (land, labour and capital) that were previously cornmitted to conventional farming activities to other activities that are not production orientated (Ilbery, 1992). Fam diversification provides a dual benefit to operating farrns. One, famers can directly and indirectly improve their incornes (Agricultural Land Commission, 1997); and two, farm operators are able to tower the risks and uncertainties associated with market situations f Lowry, 1996).
Agricultural tourism, or agri-tourism, is one form of farm diversification. Combining agriculture and tourism together is not a new phenornenon. Europe, New Zealand, Australia, the United States and some parts of eastern Canada have a long tradition of linking tourism and agriculture. In these parts of the world, agri-tourisrn is viewed as a legitimate way to enhance farm income and thus contribute to the stability of rural areas (Agricultural Land Commission, 1997). Unfortunately, this long tradition is not matched by an equally long and intensive research tradition (Opperrnann, 1996; Luloff et al., 1994; Dernoi, 1983). This lack of information is further compounded by the absence of a commonly accepted definition of agri-tourism (Opperrnann, 1996; Oppermann, 1995; Cox & Fox,
1990).
Agri-tourism is a broad term that covers a multitude of possible enterprises and a wide range of management and capital requirements
(Ilbery, 1989; Gassan, 1988; Haines & Davis, 1987). The definition of an agri-tourism business used throughout this study is an enterprise that combines the natural setting and products of an agricultural setting with a tourism experience. This includes a wide spectnim of products and services that ranges from 'fruit stands' to 'winery and orchard tours' to 'farrn-based bed and breakfast accommodations' to 'alpaca fams' to 'cattle drives'. All of these activities include a combination of agricultural and tourisrn elements
(Strategic Partnerships et al., 1996).
To date, little is known about the current status of fam-based agri- tourism in British Columbia. Nevertheless, BC's government agencies believe that there are considerable opportunities for growth in this field of tourism because of the province's spectacular scenery and moderate climate (Agricultural Land Commission, 1997). Also, it appears that an increasing number of BC farm operators are tuming to tourism as a means of diversifying their ewnomies (Bruce & Whitla, 1993),especially in regions such as the Okanangan and Vancouver Island, where there already is a large pool of tourists from which to draw.
Regardless of this growing enthusiasm, the transition from agricultural production to catering to tourists is not always an easy process.
Not al1 farm operations are capable of diversification (Ilbery, 1992),and often difficulties arise when farm operators attempt to shift their farm operations from agricultural production to tourism development (Haines &
Davis, 1987). Current research tends to lag behind existing business practices. As a result, many fan operators and govemment officiais have tended to follow their own judgment on an informa1 and ad hoc basis.
Unfortunately, this type of decision-making does not often produce desired results. Therefore, further research should be conducted before BC farm operators and govemment aoencies irnplement strategies, programs and policies aimed at encouraging agri-tourism development. i.2 Purpose of Study
The overriding purpose of this study is to gain an understanding of
agri-tourism developrnent in British Columbia. Therefore, the objective of this research is twofold:
1. to determine what factors affect diversification into agri-tourism; and
2. to identify strategies that enhance agri-tourism development in British
Columbia.
1.3 Research Questions
This study of British Columbia's agri-tourism operations encompasses two main research questions which were identified during a review of the literature.
i.What factors differentiate successful agri-tourism operations from less successful ones?
2. What strategies should be developed to encourage diversification into agri-tourism?
1.4 Methods
Four methods have been employed in this study: a literature analysis, two self administered questionnaire surveys and focus group research. 1.4.1 Method One: Literature Analysis
An analysis of secondary data provided background from which
primary research was conducted. Two surveys and several management
strategies were developed based upon information found in the titerature.
7.4.2 Method Two: Questionnaire Suwey to Farm Operators
A self administered questionnaire survey was mailed to 930 farm
operators in BC during the tirne period of the middle of August to the end of
November 1996. The questionnaire was developed for the Ministry of Small
~usiness,Tourism and Culture and the Ministry of Agriculture to gain a
greater understanding of the supply side of agri-tourism and added-value
processing in BC.
1.4.3 Method Three: Questionnaire Suwey to Support Agencies
During the first week of November 1996, questionnaires were sent to
80 support agencies that had ties to tourism or agriculture associations.
These support agencies were contacted by telephone, and a questionnaire was faxed to each of them. The responses to the questionnaire were either
given over the telephone or were faxed back to the researchers.
1.4.4 Method Four: Focus Gmup Research
Agri-tourism workshops were conducted during the last week of
November, 1996 in four regions of 8C: Nanaimo, Langley, Penticton and Creston. Groups of 15 participants were formed from the people who
attended these regional workshops. Each of the 15 focus groups provided
qualitative information on issues that had been previously identified by the
Ministry of Small Business, Culture and TouRsm and the Ministry of
Agriculture as constraints to agri-tourism development. These constraints
included issues such as excessive govemment regulations, lack of financial
support, inadequate marketing skills, lack of training programs, appropriate
Iiability and risk management strategies and partnership development.
1.4.5 Data Analysls
The data were analysed using nonparametric statistics. Statistical
tools such as analysis of variance and chi square tests were used to meet
the study's objectives. A content analysis was used to quantify the
qualitative information supplied by fam operators.
1.5 Report Organisation
This document is divided into six chapters. Chapter one presents the
rationale for the study, the purpose of the study, research questions and a
brief description of the research methods used in this study. Chapter two
provides a review of the literature in three general areas which are relevant to this study: agricultural restnicturing and diversification, agri-tourism development and policy development. Chapter three provides a description of the research methods used to collect, analyse and interpret the data pertinent to this study. This chapter also outlines the survey instruments- and focus group discussions. Chapter four describes the research findings.
Chapter five details management strategies. Finally, chapter six presents conclusions and a sumrnary of further research needs in this field of inquiry, Chapter 2
Literature Review
2.1 Introduction
This chapter is divided into four sections. The first section deals with the institutional changes that prompted the restructuring of the agriculture sector in various countries. Jialso examines some of the key environmental, social and economic issues associated with this restructuring process. The second section describes diversification as a means of economic survival for farm operators. The third section discusses one type of diversification, agri-tourism, and examines its existing scope, range and influence. The fourth, and final section, outlines the different policies designed by various governrnents to encourage and enhance agri-tourism development in their country.
2.2 institutional Changes
- During the last twenty-five years, the agriculture sector of the
Western world has been undergoing a transformation from industrial production to post-industrial production which has been reflected in institutional changes. For example, Canadian agricultural policies have slowly shifted from protecting its agricultural industry, to being wmmitted to free irade and private enterprise. However, to date the post-industrial production model has not completely replaced the industrial model. Some authors (DISouza & Ikerd, 1996) state that this post-industrial paradigm has
emerged under the concept of sustainable agriculture in order to solve the
problems of environmental pollution and resource base degradation fhat the industrial model created.
This shift in paradigm appears to be accepted by societies as a fact
of life. Nevertheless, the transition has radically altered many agricultural communities' social and economic systems, which has resulted in the emergence of alternative land uses and values (Gill & Reed, 1997;
Marsden et al., 1993; Bryant & Johnston, 1992).
22.1 Restnrcturing the Agricultural Sec for
Critical changes in the agricultural sector began to take place after the Second World War (Pierce, 1993; Bowler et al., 1992), when the agricultural policies of many Western nations shifted from traditional productive activities to increasing agricultural productivity by promoting technological progress (Gill & Reed, 1997; Dwyer & Hodge, 1996; llbery,
1988). Industrial and capital intensive modes of production became increasingly important. As a resutt, the agricultural sector became greatly influenced by various forces and trends: high inputs of fertilisers, pesticideslherbicides and fuels (Pierce, 1993), emergence of new 'needs' in society (Bowler et al., 1992; Petit & Barghouti, 1992), increased specialisation of crops, a rapid rate of technological change (Pierce, 1993;
Bowler et al., 1992; Petit & Barghouti, 1992), a restructuring of fam numbers and size, and a change in support from govemment for agricultural production (Gebremedhin & Christy, 1996; Dwyer & Hodge,
1996; Pierce, 1993; Troughton, 1993; Bowler et al., 1992). As the production of food and fibre became more bountiful, farms and rural communities were faced with environmental, social and economic challenges.
2.2.2 Environmental Challenges
The damaging impacts of agricultural technology and farm policies on the physical environmental in rural areas are well documented (Pierce
1994; Nellis, 1993; Petit & Barghouti, 1992). Areas of marginal land were drained and 'irnproved' for agricultural production which led to the loss of habitat and a decline in biodiversity (Fraser Basin Management Program,
1997; Dwyer & Hodge, 1996; Pierce, 1996). The heavy use of pesticides and fertilisers on farrnlands caused nitrates and other chemicals to Ieach into the local water systems (Fraser Basin Management Program, 1997;
Pierce 1996; Dwyer 8 Hodge, 1996; Pierce, 1993). To achieve economies of scale, many farmers managed large numbers of livestock, which increased prablems of effluent disposal and the incidence of water pollution
(Dwyer & Hodge, 1996). Groundwater demand for irrigation increased, and in some areas, the withdrawal rates exceeded the recharge. Yet many farmers continued to extract the water for short-term economic gain (Fraser
Basin Management Program, 1997; Nellis, 1993). Finally, the continuous production of specific crops led to soi1 erosion and the destruction of soi! microbes (Fraser Basin Management Program, 1997; Pierce, 1996; Pierce,
1994).
Environmental extemalities' caused by the agriculture sector during this period have been tremendous (Nellis, 1993). For many years these costs were not examined nor tabulated. However, by the mid 1980s several studies were published and gained considerable attention. In 1985, for example, the Conservation Foundation estimated that the sediment erosion from agricultural land into U.S. streams, rivers and lakes caused damage totalling between $3 billion US to $13 billion US annually (Nellis, 1993).
The U.S. Department of Agriculture in 1987 conducted a study on ground water contamination from agricultural chernicals and estimated that the cost of cleaning wntaminated wells ranged from $0.9 billion US to $2.2 billion
US (Nellis,1993). Unfortunately, these wsts to society are not reflected in the market price for agricultural products.
In recent years, the public has become increasingly aware of and concemed with environmental issues and their related qsts to society.
Many fam operators have responded to these pressures by turning towards more sustainable agricultural pradices andor wnsidering other income sources (Hilts, 1993).
' Costs borne by Society and not deded in the market price.
11 2.2.3 Social and CommunÎty Challenges
Agricultural restnrcturing has irnpacted the social structure of rnany rural cornmunities. During the period of agricultural industrialisation, there has been a continuous decline in the rural population and in the number of. farms. As well, the average farm size has increased, and there have been signifiant changes in the patterns of tenure and organisation (Troughton,
1993).
Farming became more mechanised and motorised, and less farm workers were needed to operate a farm. This resulted in massive migration of farm families to urban centres (Gebremedhin & Christy, 1996). At the tum of the century, one in five Canadians lived on farms. Today less than one in thirty Canadians reside there (Bumstead, 1995).
Farm consolidation took place, and as a consequence, the number of farms declined (Luloff et al., 1995; Troughton, 1993; Deslauries et al.,
1992). Over a twenty-five year period (1961 -1 986), the number of Canadian fams decreased by 40 percent, which resulted in a correspondhg increase in faim size (Troughton, 1993). The same is true in the United States. Most middle-size farrns have ceased to exist (Luloff et al., 1995; Demissie, 1990;
Bonanno, 1987). American 1992 agricultural statistics showed that the number of fams and value of production are now concentrated in either large or smalf farm operations (Gebrernedhin & Christy, 1996). It has been projected that by the year 2000, more than half a million U.S. farms currently in production will disappear (Gebremedhin & Christy, 1996).
While the overwhelming majority of Canadian farms remain farnily operations; tenurial or ownership changes have occurred. Among the highly capitalised and high gross income farms, there has been an increase in partnerships and family corporations. Much more widespread, is the practice of expanding the farm base by renting additional land (Troughton,
1993).
Despite the reduction of farm numbers, the specialisation and intensification of agricultural production quickly led to overproduction and depressed product prices. As a result, agricultural incomes decreased
(Ministry of Agriculture, Fisheries and Food, 1995), and many farm families looked to off-farm work to boost their sagging income. Bollman and Smith
(1988) noted that in 1946 only 3 percent of the Canadian farmer's income was eamed from off-farm work. By 1982, this proportion rose to 21 percent and continues to rise (Bollman & Smith, 1988). Other fanners responded to this economic uncertainty by selling their family farms and leave their communities. In an attempt to maintain or increase farm incomes, policy makers were called upon to increase their support and provide polices that would strengthen the vitality of rural economies (Troughton, 1993). 2.2.4 Economic Challenges
For years govemments have initiated fiscal policies as a means to increase crop production and bolster the price of agricultural products
(Wilford, 984). Depending on market forces, some government policies paid farmers to grow certain crops one year and to forgo planting their fields the following year. Governments also developed agricultural policies to support agricultural protectioniçm (Hjalager, 1996). Through subsidies, marketing boards andfor quotas, govemments were able to ensure that famers were paid well above world market prices for their crops.
Protectionisrn of agricultural products is still favoured by many fanners world-wide (Hjalager, 1996). These farrners fear that the implementation of global trade agreements could result in a decrease in the intervention prices, as well as a loss of the levies and compensatory payments provided to them (Wilford, 1984). Such changes will in tum influence the strategic management of their individual farm holdings
(Hjalager, 1996).
By the mid 1980s, the Canadian federal government recognised the need to change a number of agricultural programs. This was largely due to of the escalating wsts of the agricultural protection policies and the extemal pressures to free trade (Ministry of Agriculture, Fisheries and
Food, 1994a; Pierce, 1993; Schmitz, 1989). Simultaneously, farm operators realised that policy changes were underway, particularly after the Free
Trade Agreement was signed with the United States. When the Canadian
14 government lost its bid to the United States in the countervailing duty case of Canada's softwood lumber (Schmitz, 1989), farmers grew correspondingly less confident in the fairness of trade regulatory systems.
The political situation in Canada has shifted from one that formerly protected the agricultural industry, to one committed to free trade and private enterprise (Ministry of Agriculture, Fisheries and Food, 1995). The pressure from the government to revise the form and direction of agricultural policy has been tremendous and continues to grow. Today, farrn operators can no longer expect to increase their incomes by producing unwanted food or depending on direct income payment from government agencies. In response, farm operators have been forced to look at a rnultiplicity of strategies in the hopes of creating new opportunities. Some famers have tried to intensify their production; others have attempted new types of production that are capital intensive, such as bio-crop production; and others have looked to diversification as a means of sumival (Lowe et al., 1993).
2.3 Fann Diversification
Diversification is assumed by many decision makers to be on the leading edge of change (Leontiades, 1980). However, farrn diversification is not a new or novel strategy (Haines 8L Davis, 1987). On the contrary, the narrow agricultural specialisation and intensification of farm production that has taken place since the end of the Second World War is an anomaly (Pierce, 1993; Haines & Davis, 1987). Before that tirne, farrning activities
were routinely combined with other activities in order to transfomi raw
material into useable products. The difference today is that because of
intensified incorne pressures and policy uncertainties, diversification
appears as an attractive alternative for many farmers. Politicians also
realise the potential of diversification. They see it as a means of reducing agricultural support without decirnating rural economies (Petit & Barghouti,
1992; Cox & Fox 1990; Ilbery, 1989;Gasson, 1988).
The shift from production intensification to diversification has
influenced and encouraged many fan operators to rethink, restructure and adjust their business strategy in order to find alternative sources of income
(Marsden et al., 1989). The need to supplement income may be one reason that farmers decide to diversify, but Winter (1987) states that income is not always the significant motive. Indeed, Winter (1987) daims that farm operators are often more interested in utilising existing farm buildings, seizing the opportunity to use spare resources, pursuing a hobby or sport on a larger scale, seeking new interests andlor meeting new people. He even notes that some fanners find running a strearnlined farm operation
'boring'.
Some women, especially those living in rural communities with limited employment opportunities, may also be interested in diversifying the fam business. Diversification provides these women with an opportunity to eam income and gain recognition of their own (Luloff et al., 1995; Gasson, 1988). Working to supplement the family income is not new to Canadian fam women. Bollrnan and Smith (1988) reported that over 53 percent of al1
Canadian farm women work both on and off the farm. If the farm eams less than $53,000 per year, the percentage of working women jumps to 75 percent. If the farm business diversifies into some aspect of tourism, such as catering or accommodation, it is assumed that farrn women would play a key role in developing and managing the business (Pervertz, 1991;
Potthoff, 7991).
While diversification can be incorporated into a farm's business plan, llbery (1992: 100-1 ) states that "not ail farmers will be able to diversify and the potential for diversification will Vary spatially, reflecting the market opportunities and the agricultural geography and traditions of different areas.* Haines and Davis (1987:2) reiterate this thought by emphasising that diversification is not a "universal panacea," since it cannot solve the curent problems facing the agricultural industry.
2.3.1 Extemal and Internai Forces of Change
Extemal forces and the intemal farm environment can greatly influence the diversification process (Hjalager, 1996; Ilbery, 1992). The discussion on farrn diversification so far has rnainly focused on the extemal, or macroeconomic forces, such as technological and policy developments or marketing organisation. These forces exert pressure on al1 farrn operations and collectively transforms the agricultural sector. One author, Benjamin (1994), illustrates this point by showing that a decline in cereal
price (an extemal force) increases the probability of fanners taking off-farm
employment. Conversely, compensatory payment (an extemal force)
decreases the probability of off-farm employment.
Researchers (Hjalager, 1996; Stokes, 1993; Ilbery, 1992; Anosike &
Coughenour, 1990) argue that the interna1 farrn environment can also have
an impact on a farmer's diversification strategy. Interna1 forces include the
characteristics of the farm family (age, education, stage of life cycle) and
the fam (size, type, location and fam incorne). The decision of whether to
adopt a diversification strategy depends on both the external forces and the
intemal environment (Figure 2.1 ).
1. Extemal: Land Labour Capital
2- Intemal: Land Labour Capital Entrepreneuriai AbiItRy
3. Interactive:
Penetration -7Response L Modification A
Source: Evans, N. & B. llbery (1989) .A Conceptual Framework for Invesügating Fam-based Accommodation and Tourism in Brbinm,Joumd of Rural StuaeS, Vol. 5, No.3, p26û. Figure 2.1 Extemal and Intemal Factors Affecting Fann Diversification Farm diversification involves the diversion of resources (land, capital and labour) away from conventional agricultural production. According to llbery (1992), fann diversification essentially takes two forms: agricultural and structural (Figure 2.2). Agricultural diversification focuses on alternative forms of agriculture production, and broadens the notion by including such farrn work as operating farm woodlands, contracting out of land, organic faning and unconventional crops and livestock. Structural diversification is geared outwards from the fam and towards the public. It includes participating in agriculturally-based tourism and added value processing.
I I Tourism'lded Denotes focus of this research Structural ~iversification
Farm Diversification
Agricultural DiversiTication
I
Saurce: adapted fmllbery (1992) 'State-assisted Fann Dhrersification In the Unitad Kingdom' ln: Bowlw, I.R, Bryant, C.R. and Nek, MD(eds.) Contempofary Rurel Systemsk TfansYlbn: Voium 1 A@uilnrm andEn&nmnt, London: C-ABIntemabai. p.1 W-116and Cox 8 Fox (1990)-Agrlculturaliy 6ased Leisure Atûadionsg,Joumei of TOU^ W~S.VOL 2. NO. z p. ian. Figure 2.2 Agricultural and Structural Foms of Fami Diversification Agriculturally-based tourism, or agri-tourism, covers a wide range of
possible activities, mich for convenience can be categorised into the
f~ilowinggroups:
1. Retail sales1 Direct marketing - goods produced on-site, customer
harvested produce and goods produced off-site;
2. Tours - tours of processing facilities, scenic tours and tours of production
facilities;
3. Activities - farm tourism (accommodation), culturally related
activities, outdoor recreation and educational or 'hands on experiences'
(Cox & Fox, 1990).
The farm diversification model divides structural diversification into
two distinct categories, tourism and value added. However, the distinction
between the two groups is not always easy to maintain. It is important to
realise that some farm operations include both tourism development and
value added processing in their business plan. For instance, apple growers
may produce apple pies or jellies (a value added activity), but they might
also conduct tours of their apple orchards (a tourism activity). To judge the
degree to which a farm incorporates value added or tourism activities, a
continuum can be used (Figure 2.3). 1 I 1 Agri-tourism Both Value Added Adivities
Figure 2.3 Structural Diversification Continuum
At the one end of the spectnim, there are those farms that ernbrace tourism. At the other end, there are farms where only value added
processing takes place. The degree to which a farm incorporates either, or
both, of the structural diversification strategies will determine where it will be situated along this continuum.
2.4 Agri-tourism Development
Many European countries have a long tradition of linking tourism and agriculture together (Oppermann, 1996). Unfortunately, this approach is not matched by an equally long and intensive research tradition (Oppermann,
1996; Lutoff et al., 1995; Demoi, 1983). In fact, the research Iiterature on agri-tourism cm at best be described as 'sporadic'. Prior to 1990, very little was published on agri-tourism. However, in 1991 researchers became interested in the topic. This resulted in two joumals, Journal of Sustainable
TOU~S~and TounSm Recreation Research, dedicating entire editions to discussions of rural development and agri-tourism issues. Since then only a few academic articles have been published. This lack of information is further compounded by the absence of a commonly accepted definition (Opperrnann, 1996; Oppermann, 1995; Cox
& Fox, 1990). Agri-tourism is a term which covers a multitude of farm enterprises and wide range of visitor experiences. The nurnber and type of zgri-tourism projects and opportunities available to farrn operators is enormous. They encompass a spectrum from the development and operation of capital intense tourist accommodations to the rental of infonnal picnic sites (Gasson, 1988; Ilbery, 1989). Much of the literature, partiwlarly in Europe, equates agn-tourism with farm tourism (Oppermann, 1996) and deals with types of accommodation.
Definitions of agri-tourism or farm tourism tends to Vary from country to country, and researcher to researcher. Frater (1983: 169) defines farm tourism as a tourism enterprise on a working farm, which is "largely supplementary to existing farm activities." Dernoi (1983: 156) defines farrn tourism as accommodation in farm premises where the host family lives, or in another structure that has "been converted from agricultural use into living quarters." Evan and Ilbery (1992) suggest that farm tourism is made up of farm based accommodations and farm baseci recreation. Agro tourism
(synonymous to agri-touflsm) is defined by Turner and Davis (1993:6) as an experience which "involves a special interest visit or holiday in a rural area to gain experience about a place, its people and their activities within a rural economy." Farm tourism in New Zealand involves visiting and touring sheep ranches and most ofien caters to an international audience (Eisman, 1994; Pearce, 1990). In Hawaii, the definition broadens (Bowen et al., 1991 ) and incorporates "enterprises that produce andlor process plants or animals and which also strive to attrad visitors to enjoy the agriwltural attributes of the operation and its sites, and/or to purchase products produced or obtained by the enterprisen (Cox & Fox, 1990: 18). Regardless of the country or researcher, the cornmon denominator of al1 the above definitions is the linkage between a working fam and a tourism activity.
Agri-tourism appears to be a growth industry in many parts of the world. It has been estimated that 33 percent of al1 farms in England are engaged in non-traditional agricukural enterprises (Davis & Turner, 1992), and that 15 percent of those farms had some type of tourism project, which most often involves providing tourist accommodation ( Paynter, 1991). In the UK's West Country about 23 percent of the farms are involved in farm tourism. Agri-tourism in Australia has grown in only 10 years from less than
50 properties to include aImost 300 farms and sheep stations (Palmer,
1995). The bed and breakfast (B&B) accommodation sector in the United
States has become one of the fastest growing tourism industries (Emerick &
Emerick, 1994). ln France, gites, or rented accommodations that were established to utilise redundant or under-used farm houses, has grown from
146 gites in 1955 to over 28,000in 1979 (Wrathall, 1980). In 1996,
Williams and Shaw (1 996) estimated that Austrian farmers offered 109,000 guest rooms to the travelling public. This number translates into about one sixth of the supply of Austria's tourist beds. In Gemany, about 20,000 fams in former West Gerrnany offer varying forms of farm holiday experiences (Reid et al., 1993). Even in northern Europe, over 1O percent of the Danish farm holdings have undertaken fam tourism (Hjalager, 1996).
A number of factors are behind this increase in agri-tourism development. First, a shorter work week and increased holiday time provides people with more leisure time (OECD, 1994; Lane, 1994; Greffe,
1994; Bryden et al., 1993; Reid et al., 1993; Haines & Davis, 1987).
Second, many tourists want to escape congested mainstream traditional attractions and look to the countryside as the new vacation spot
(Oppermann, 1996; Rohter, 1994; Bryden et al., 1993; Paynter, 1991;
Haines & Davis, 1987). Third, there is an increased interest in health, recreational activities and nature (Hummelbrunner & Miglbauer, 1994;
Bryden et al., 1993; Reid et al., 1993). Fourth, people are increasingly interested in where and how their food is produced (Bryden et al., 1993;
Reid et al., 1993). Finally, the rural lifestyle is romanticised by many people as 'laid back, generous, hospitable and neighbourly'. In other words, a lifestyle which is sometimes difficult to find in urban communities
(Oppermann, 1996; Friesen, 1995; Bramwell, 1994).
This growth in agri-tourisrn development is based on the widespread notion that agri-tourism development is beneficial to both farmers and their community (Maude & van Rest, 1985). While many researchers have written about the benefits of agri-tourism, others have noted that challenges exist which can hamper agri-tourism development. 2.4.1 Benefits of Agri-tourism Development
The literature review indicates that agri-tourism can provide farm operators and rural cornrnunities with many benefits such as:
Generating secondary income for farm operators (McGiII, 1996; Luloff et al.,
1995; Ryan, 1995; Friesen, 1995; Demoi, 1991; Dernoi, 1983). However,
Hjalager (1W6), Turner 8 Davis (1993), Maude & van Rest (1985) disagrees and clairns that the high financial retums expected from agri- tourism are unlikely to make significant impacts on farrners' incornes;
Preserving the visual and cultural rural landscape (Williams & Shaw, 1996;
Luloff et al., 1995; Turner & Davis, 1993);
Reducing out migration by providing jobs (Friesen; 1995; Ryan, 1995;
Turner & Davis, 1993; Demoi, 1983). However; Hjalager (1 996:106) disagrees and states that agri-tourism in Denmark does not employ "idle manpower resources, it only reallocates family labour";
Bringing a transfer of ideas frorn urban to rural areas (Oppermann, 1996);
Providing urban people with an experience of rural living (Lowry, 1996;
Reid et al., 1993);
Diversifying the rural econorny (Lowry, 1996; Ryan, 1995; Maude & van
Rest, 1985);
Creating eventual market contacts with urban centres (Agricultural Land
Commission, 1997; Bowen et al., 1991; Demoi, 1983);
Making provisions for certain infrastructure (Bowen et al.; 1991); and Enhancing the rural identity of wmmunities and emphasising the
importance of agriculture in local areas (Luloff et al., 1995; Ryan, 1995).
2.4.2 Challenges to Agri-tounsrn Development
The transition from agricultural production to catering to tourists is
not always an easy process. To reap the above benefits that agri-tourism
enterprises can generate, farm operators must contend with numerous
challenges that should not be underestimated.
2.4.2.1 Lack of liainhg
The lack of business training for farm operators could spell disaster
(Friesen, 1995; Greffe, 1994; Choy & Rounds, 1992). Often training is
needed to enhance communication skills, provide a greater awareness of
customer needs and expectations, as well as to develop management skills
for such practical issues as serving guests and keeping financial records
(Hilchey, 1993; Davis & Turner, 1992; Gill, 1991; Garcia-Olaya, 1991). As
well, sorne farm operators may not be suited to deal with the general public
(Strategic Partnerships, 1996a). In such cases, these farmers may be
obliged ta hire additional staff and provide appropriate training in hospitality
andfor agricultural knowledge (Thompson, 1990).
2.4.2.2La& of marùeang knowledge
Many small businesses have failed because of poor or insufficient
marketing strategies (Friesen, 1995; Palmer, 1995; Embacher, 1994; Reid et al., 1993; Evan & Ilbery, 1992; Ilbery, 1991). Since many agricultural products are controlled and marketed by provincial marketing boards, farm operators are often uncertain as to how to market their tourism products
(Oregon Department of Agriculture, 1996; Ilbery, 1989). Therefore, if agri- tourism businesses are to be successful, it is imperative that faim operators take the time to learn marketing skills and develop effective marketing plans and tactics for their businesses.
24.2.3 Lack of quaw wntrol
The quality of the farmer's products and semices offered plays a key role in detennining the success or failure of agri-tourism enterprises
(Hjalager, 1996; Dernoi, 1991). Since guests demand and expect appropriate standards of cornforts and facilities, an agri-tourism enterprise should project a clean, well-organized image (Friesen, i 995; Palmer, 1995;
Embacher, 1994; Reid et al., 1993). Image rnust cany over into both the tangible and intangible products offered. Since image can be easily tamished, farrners must critically look at their farm operations and think about what their guests will see and expect to experience (Hilchey, 1993).
2.4.2.4 Lad of finance
With the recent decline in farm incornes, certain farmers have found it difficult to invest large sums of capital into diversification projects.
Unfortunately, many agri-tourism ventures require substantial investments.
A lack of appropriate levels of capital can be devastating to the business (Hjalager, 1996; Luloff et al., 1995; Embacher, 1994; Hilchey, 1993; Davis
& Turner, 1992; Fowler, 1991; Palminoski, 1991 ; Ilbery, 1991; Ilbery, 1989).
Consequently, the main fann operation should be in a healthy financial
situation before attempting to diversify into agri-tourism. Farmers, who are
'pushed' int~diversifying as a 'survival strategy', may be creating further
stress on their already unstable financial condition (Hilchey, 1993).
2.42.5 ficessive regulations
Famers in BC do not have to make an application to the Agricultural
Land Commission if they wish to start a home business or a bed and
breakfast enterprise. However, these poIicies do not usurp the need to
comply with local bylaws and regulations. Most significant diversification
projects need planning permission, and the development of agri-tourisrn is
often constrained by rigorous planning regulations. Policies, such as those
relating to physical planning, building permits, property taxation and
licensees, can affect the viability and feasibility of farrn tourism ventures
(Oregon Department of Agriculture, 1996; Reid et al., 1993; Ilbery, 1991;
Maude & van Rest, 1985).
2.6.2 6 Lack of appmptiate hsumnce
Appropriate Iiability insurance coverage must be considered before
starting an agri-tourism business (Strategic Partnerships, 1996a; Oregon
Department of Agriculture, 1996; Friesen, 1995; Ministry of Agriculture,
Fisheries and Food, 1994). Regular fann liability insurance coverage is not adequate for a business in which customers will be coming ont0 the farm
property. Additional insurance coverage and wrresponding risk
management programs are needed to protect visitors and farmers alike
(Hilchey, 1993).
2.4.2-7 Pemonaf chalfenges for farm famfies
Agri-tourism enterprises entails dealing with the public. This means that members of the farm family must expect and deal with disruptions to their lifestyle (Taylor & Taylor, 1992; Pearce, 1990). Disruptions rnay take the fom of custorners arriving at the farmef s previously private back door or the fam family serving breakfast to guests at their kitchen table. If a tourism enterprise involves catering or accommodation, a farmer's spouse rnay be required to assume a key role in the delivery of the service
(Potthoff, 1991). Farm operators could also be confronted with misunderstandings that might arise between themselves and their guests conceming the harsh realities of fam management practices (e.g. chernical spraying, animal slaughtering andlor castration) (Friesen, 1995; Ryan,
1995; Bowen et al., 1991; Fowler, 1991; Pearce, 1990).
2 4.2.8 Confiet wia pnima~agnicu/fura/prpduction
lncreased workload and the seasonal nature of the agri-tourism business is an issue for farm operators (Friesen, 1995). Sunny weather, warm temperatures and longer days make July and August a popular time to visit a farm. However, such times also coincide with additional fann work.
Trying to run two types of businesses during such periods may have
negative impacts on the farmers and their families (Shaw & Williams, 1994;
Boudy, 1991; Neate, 1987; Demoi, 1983).
2.4.29 Di3fance fiom rnarkefs
The rural location of agri-tourism businesses can create aavantages
and disadvantagas for agri-tourisrn development. On one hand, rapid urban
growth in many parts of BC increases pressure to transfer agricultural land
into residential, commercial and industrial uses (Pierce & Sequin, 1993). As
well, some foms of urban growth create wnfiicts which increases the cost
and difiiculty of farming. Other problems arise because of the inherent
incapability between agricultural production and urban settlement (e-g.
fragmentation of farm units by highway and power right-of-ways, vandalism,
restrictions on fam operations and increased property taxes) (Baxter,
1974). On the other hand, urban growth in a region can increase the
demand for agricultural products. In turn, this factor can raise the income of
famers and create pools of possible tourists (Reid et al., 1993; Fowler,
1991; Lonc, 1991).
Tourists can damage rural landscapes by an placing excessive strain on the existing infrastructures (Ryan, 1995; Klejdzinski, 1991; Maude & van Rest, 1985). lncreased trafic on unpaved roads, excessive consumption of
water, overworked sewage systems and increased garbage disposal can
create pressures on rural areas that might otherwise be unnecessary.
A final constraint is the possibility of visitors bringing diseases to the
farm (Aarts, 1996; Hilchey, 1993). Farm activities, such as intensive dairy,
swine and poultry operations, are prone to certain animal diseases that can
be introduced by tourists. Avian influenza and salmonella are two diseases
that have the potential to devastate an entire stock of animals (Hilchey,
1993).
2.4.3 Defenninants of Success
Agri-tourism, as a successful diversification strategy, is more than
merely augmenting a fam business with tourism activities. To gain a
greater understanding of diversification processes in agri-tourism,
researchers have studied fam structures and examined a range
interrelated factors that play a key role in determining diversification
strategies and performance. Deteminants to successful agri-tourisrn
development include:
Accessibility - locatad on or near a major routeway and in close proxirnity to an urban centre (Friesen, 1995; Hilchey, 1993; Bryden et al., 1993; Davis & Turner, 1992; Ilbery, 1989) and charactensed by natural beauty (Bryden et al., 1993);
Fann type- the lay out of the farm, fields and facilities should be conducive to having visitors and can affect the type of agri-tourism development
(Hjalager, 1996; Ilbery, 1992; Ilbery, 1989);
Famer's attitude and commitment - (Friesen, 1995; Hilchey, 1993; Anosike
& Coughenour, 1990; Ilbery, 1989; Haines & Davis, 1987).;
Advertising and marketing skills of farm operator- (Friesen, 1995; Ilbery, i989);
Fami size- the adoption of agri-tourism development tends be associated with larger farms (Ilbery, 1992; Anosike & Coughenour, 1990;Gasson,
1988; Neate, 1987; Maude & van Rest, 1985); and
Financial resources- farmers with higher incomes tend to have the best possibilities for success (Hjalager, 1996; Ilbery, 1992).
Gaining an understanding of the dynamics of the diversification process is essential if govemrnents are planning to develop policies that will encourage and enhance agri-tourism development. However, implementing an agri-tourism strategy does not guarantee that farm operators will be successful as agri-tourism operators (OECD, 1994;
Bryden et al., 1993). Business development in rural areas often requires active support that identifies and tackles issues specifically related to the challenges of isolation and small business size. 2.5 Policy and Program Practices in Agri-tourism
Many govemment agencies have introduced policies and programs with the aim of encouraging agri-tourism development. However, except for a few initiatives, these policies have been lirnited in both longevity and . number (Williams, 1996; Bryden et al., 1993). In fact, when Luloff et al.
(1995:6) looked at the various rural tourism strategies in the United States, they stated that the programs were "more rhetoric than action". As a consequence, questions have been raised regarding the appropriate role of government in managing fan diversification (Dwyer & Hodge, 1996;
Hjalager, 1996;Bryden et al., 1993).
After reviewing the many policies and programs aimed at agri- tourisrn development, support can be categorised into three areas: financial aid, technical information and marketing strategies. These broad strategies tend to promote agri-tourism development by affecting either supply or demand. For instance, the extent to which financial aid is provided to famer operators can directly affect the supply side of agri-tourism development, while technical information and marketing strategies can influence demand.
In Canada, a few agi-tourism policies have been developed in response to the specific needs of a province. In Ontario, a Rurai Visitation
Pmgram was developed in 1993 to help support economic development in rural areas (Williams, 1996). The Ontario Ministry of Agriculture, Food and
Rural Affairs also has provided certain services, such as business planning and training sessions, to agri-tourism operators (Ryan, 1995). Meanwhile, British Columbia's authorities have been slower to respond to the economic
woes of BC famers In fa&, it is only in recent months that the Agricultural
Land Commission (ALC) implemented a land-use policy which allows farm
operators to diversify into tourism.
2.5.1 Financial Aïd
Incentive policies and programs directed at increasing agri-tourism
development have been launched in many countries (Hjalager, 1996; Luloff
et al., 1995; Winters, 1987; Frater, 1983). In Britain, the Farm
Diversification Grant Scheme came into effect in 1987 and provided financial assistance to farm operators wishing to set up an ancillary business on or adjacent to their farm (Gasson, 1988). This policy was aimed at maintaining the farmer's incarne while the govemment reduced support prices for agriculture products. Unfortunately, the policy did not prove to be successful, since many fan? operators chose not to participate in the program (Ilbery ,1992; Gasson,f 988; Winter, 1987).
Financial assistance for agri-tourism development continues to be provided throughout many parts of Europe (Williams, 1996; Greffe, 1994;
Frater, 1985). In France, farmers cm obtain grants or loans to finance the conversion of farm buildings (Greffe, 1994). In West Gerrnany, financial aid is available for agri-tourism facility developrnent within the context of village renewal and regional development programs (Williams, 1996). Authorities in Portugal, Belgium, Spain and ltaly also provide financial assistance for rural developrnent. The Irish government created the Operational
Programme for Rural Development as a mechanism to diversify the rural
economy (Williams, 1996). Initially this policy met with limited success, until
it was rnodified in 1991 to expand its financial support and accept a wider
range of participants (Williams, 1996; Reid et al., 1993). In 1994 the
Objective 5b and Leader programs were initiated to bolster tourism
development in rural Danish districts. Once again, success has been
Iimited. Based on the interviews conducted with thefarrners who received the financial aid, Hjalager (1996) discovered that the financial retums on tourism development were lower than the returns yielded by traditional agriculture production and that tourism created very few extra jobs.
2.5.2 Technical Information
Another type of action taken by authorities is the provision of technical information and consultation services to farm operators. In the
United States, the Small Business Administration organises advisory and training services (Greffe, 1994). Workshops are devoted to such subjects as retail trade, home-base businesses, promotion of tourist products and managing businesses in the hospitality sector (Gustafson, 1997). In particular, the state of New York has developed several publications on how to open and operate a farm-based bed and breakfast business.
Authorities in this state have also initiated conferences for agri-tourism fanners. These sessions focused on issues such as "promoting and merchandising your business*, "insurance and legalities", "making your
business multi-seasonalnand "thinking like a tourist"(Williarns, 1996).
In certain European countries, the systematic labelling of agri-
tourism businesses has becorne a prirnary objective for some authorities. .
Onicials in France, Gemany and Austria have deveioped a national system to ensure high standards amongst al1 agri-tourism operators (Williams,
1996; Greffe, 1994). The guidelines used by authorities are very detailed and are strongly enforced.
Many countries have organised information through training sessions. The Nordic countries have responded to the needs of agricultural wmrnunities by providing courses through universities and colleges
(Greffe,1994). In Austria, the Farm Holiday Association provides training sessions on tourism trends, marketing and sales, investments and public relations. These services are provided for both the farm operators as well as Meir staff (Embacher, 1994). German oficials offer training sessions to local fam operators which focus on the needs of paying guests (Williams,
1996). In Wales, a specific program has been set up, "Getting into Rural
Tourismn, which is intended to train people in the management of paying guests (Greffe, 1994).
2.5.3 Merkefing Sttategies
In many parts of the world, govemment agencies are trying to bridge the gap between agri-tourism businesses and their potential customers by offering marketing support. Promotion could include such strategies as the
development of brochures andlor participation in tourism trade shows. In
Belgium, it is the Offce de Promotion Touristique that assumes this
marketing role (Greffe, 1994). It is the Austrian Farm Holiday Association
that promotes agri-tourism in Austria. This association is a w-operative
marketing organisation which links individual farm businesses on a
regional, provincial and federal level (Embacher, 1994; Bramwell, 1994). In
France, the Gites De France Services, Logis de France Service and the
WFTourisme were al1 created for advertising and marketing purposes
(Williams, 1996; Greffe, 1994). The federal and state govemments in
Gemany are instrumental in promoting farm-based accommodations,
especially for the small and medium-size farms. (Oppermann, 1996;
Williams, 1996). The Australian State Tourism Industry Association plays
an intricate role in marketing and promoting host fams (AFACT, 1997).
Finally, in New York state, the promotion and marketing of host fams is
accomplished through Farm Tour brochures (Hilchey, 1993).
2.5.4 British Columbia's Agn-tourism Policy
In British Columbia, agri-policies have not focused on providing
incentives, marketing andlor technical initiatives. Instead, the provincial govemment implemented strong legislation to stop the erosion of farrnland
(Agricultural Land Commission, 1994). However, saving BC familand, did not necessarily Save the faners. In the early 1990s, the Agricultural Land Commission recugnised that many farm operators were facing economic uncertainty. Obviously strategies were needed to shift farrning from a single-purpose business to,a multi-purpose industry. Over a short period of time, the Commission initiated several policies related to such issues as bed and breakfast accommodation (Agricultural Land Commission, 1993), home business occupation (Agricultural Land Commission, 1994a) and direct farm marketing (Agricultural Land Commission, 1995a). In August of 1997, the
Agricultural Land Commission implemented the Agri-toutïst Accommodation
Policy. This policy proposed "to facilitate transition and change in the agriculture industry by encouraging clear, consistent land use policies and regulations ... and to allow farms to diversify by providing tourist accommodationsn(Agricultural Land Commission, 199513). Apparently, the
Commission believes that overnight accommodations will provide BC famers with great economic benefits.
2.6 Summary
Technological process brought about substanial environmental, social and economic changes to individual farrns and rural cornmunities.
Extemal and interna1 forces caused farm operators to focus on farm diversification to find new sources of income. Agri-tourism is one form of farm diversification. Agri-tourism development cmprovide both benefits and challenges to farm operators and their rural wrnmunities.
Agri-tourism policies can be categorised into three broad areas: financial aid, technical information and marketing strategies.
In British Columbia, agri-policies tend to fows on land-use issues. Chapter 3
Methods
3.1 Introduction
The methodology used for this research is described in this chapter.
The chapter is divided into four sections. The first section identifies the research questions. The second section gives a rationale for the methodology used. The third section describes the data collection methods, such as survey population, survey design, pre-testing, sampling procedures and focus group discussions. The fourth section outlines the data analysis methods.
3.2 Research Questions
The purpose of this study was to gain a greater understanding of the current status of agri-tourism in British Columbia, as well as to develop policies and programs that will enhance agri-tourisrn development in this province. The prirnary and secondary research questions were identified from the review of the literature.
3.3.1 Pnmary Research Questions:
1. What factors differentiate successful agri-tourism operations from
iess successful ones? Secondaty Research Questions:
Does geographical location affect the financial success of an agri-tourism operations?
Does fam size affect the financial success of an agri-tourism operation? .
Does the type and number of agri-tourism activities affect the financial success of an agri-tourism business?
Do the months of operation affect financial success?
Does the number of years that a farm has been operating affect the financial success of an agri-tourism operation?
Does the number of tourists determine the financial success of an agri- tourism operation?
Does the number of employees affect the financial success of an agri- tourism operation?
Do financially successful agri-tourism operations in BC anticipate future business growth?
2. What strategies should be developed to encourage diversification into agti-tourism?
Secondaty Research Questions:
What types of programs and projects would help agri-tourism operations become financially successful? What policies would encourage diversification and further enhance
change?
3.2 Rationale for Methodology
Very few articles that conducted research on the supply of agri-
tourism actual ly discussed the research methods used to colled the
relevant information. The majority of these studies conducted exploratory
re~earch.~The articles can be classified into three broad categories:
accommodation (Oppermann, 1996; Oppermann, 1995; Kuehn, 1995;
Emerick & Emerick, 1994), attractions (Strategic Partnerships, 1996;
Stokes, 1993; Cox & Fox, 1990) and policy (Hjalager, 1996; Luloff et al.,
1995).
In those studies which discussed research methodology, it became
apparent:
Most of the researchers had difficulty obtaining a single Iist of agri-tourism
operations. Often respondents were missing from the sample frame.
Some of the surveys, especially for the mail-back questionnaires, had low
response rates. Low response rates limit the ability of the study to
generalise its results and can threaten extemal validity.
Only one study stated that a pre-test was done. To reduce planning errors,
the survey questionnaire should be evaluated and pre-tested by an
impartial and research-competent individuals and/or a cornmittee.
Exploratory research increases the researchets understanding of the problem (Davis, 1996). To overcome some of these methodological issues, the survey instrument used in this study used multiple techniques to gather data and was evaluated and pre-tested by impartial individuals.
3.4 Data Collection
Four data collection techniques were used to address the above primary research questions. First, an analysis of the Iiterature was completed in which the determinant of success were highlighted, the constraints to agri-tourism development in other jurisdictions were identified and successful agri-tourism strategies were recognised. Second, a self administered questionnaire was rnailed to 930 farrn operators in British
Columbia during a four month period, August to November, 1996. Third, 80 people from various support agencies were faxed questionnaires during the first week of November, 1996. Finally, 15 focus groups were fonned and discussions took place in various regions of the province during a five day period, November 22 to 28'h,i 996.
3.4.1 Study Objective
The study was designed to gain a greater understanding of the curent economic status of fann based businesses that are involved in agri- tourism andor value added processing and the opportunities and development challenges facing these sectors. 3.4.2 Suwey Method #l - Questionnaire to FmOperators 3.42.1 Fam Opemtor3 Survey Populabion
The survey population consisted of representatives from al1 owner operated fams in British Columbia.
3.4.2.2 Fam Opetatufs Research hsburnenf
The format and structure of the questions for this research design were modelled on the survey instrument used by the guide outfïtters of BC and the freshwater fishing resorts of BC. The questionnaire consisted of seven thematic sections and contained twenty seven questions. Question one was used to determine whether the respondent qualified. The questions in sections two and three provided information on the types of agri-tourism activities the respondent was involved with and the revenues these activities generated. Section three dealt with value-added processing and the revenues generated by these activities. Questions in section four provided information on agri-tourism and value-added customers. The fifth section asked questions regarding marketing activities. The sixth section delved into the economic benefits, and the seventh, and final section, asked about the future growth of agri-tourism and value added processing
(Appendix 1).
A combination of checklists, open ended, nominal, interval and ratio scale questions were used in the survey questionnaire. Checklists were used for those questions that dealt with the type of attraction and marketing activities. This type of question allowed the respondent to make several
choices. The open ended questions perrnitted the respondent to answer in
hislher own words and did not restrict answers to pre-determined
constructs. The nominal questions were used to collect factual information.
An intewal scale was used to gather quantitative information on the gros
revenue. A three point ratio scale was used for measuring attitudinal
responses.
3.4.2.3 Fann Operaots Sumey Des@ and Pracedure
The survey was pre-tested by eight members of a steering committee
composed of BC fam operators. The committee identified any difficulty with
the wording, construction or rneaning of questions. The pre-testing resulted
in a reduction in the length of the questionnaire, the addition of a question
concerning motivations, the expansion of the open ended questions and a
refinement of several questions. By utiiising a panel of experts to pre-test the questionnaire, face and constnict validity were ensured.
The Ministry of Agriculture provided a list of 730 fam operators who were registered with their department. The suwey questionnaire was sent out in the middle of August. In the middle of September, the Ministry of
Small Business, Culture and Tourism provided an additional 200 narnes, and these businesses were sent questionnaires. The additional names
included businesses that were not classified as traditional farms (e.g. greenhouses or display gardens). A cover letter was enclosed with each of the questionnaires, wtiich explained the importance and purpose of the
suwey. An incentive of winning free admission to an upcoming conference on agri-tourism/value-added processing was offered to those respondents that filled out and returned the questionnaire. The surveys were wded so that the respondents could be identified and their geographical location determined.
In the middle of September, the response rate was low, only 66
'goodsquestionnaires had been retumed. An additional 20 questionnaires were retumed ai this time, but since the information provided was minimal, these questionnaires were eliminated. To increase the response rate, a follow up letter was sent to the regional agricultural representatives urging them to encourage their local farm operators to fiIl out and return the questionnaires. A reminder was also sent to those fam operators that had not returned the survey. It stated that if the questionnaire was lost, to cal1 and another would be sent, or if they still had the questionnaire, to complete and mail it back.
After three weeks, the non-respondents were randomly (every nth person) selected and telephoned. They were asked whether their farm business included agri-tourism ancilor value-added processing. If the answer was no, the interview ended. If yes, then they were asked if they had completed the questionnaire. If the questionnaire was lost, they were asked if they wanted another questionnaire mailed or faxed to them. They were also asked if they wanted to complete the questionnaire over the phone. Approximately 20 percent of the total number of respondents were contacted and interviewed over the phone.
During the last week of November, a series of regional forums brought together representatives from the agriculture and tourism sectors.
At that time, farm operators, who incorporated agri-tourism or value-added processing into their business plan and had not completed a questionnaire, were asked once again to complete the survey and return it.
The total sample size collected from the 930 BC farm operators was
168. From this total 64 (38.1 %) operated both an agri-tourism and a value- added processing business. Seventy-two of the respondents (42.9%) operated only agri-tourism and 32 (19%) operated only value-added processing. The percentage of the respondents from the various regions of
British Columbia included: Kootenays 12.5 percent, Lower Mainland 20.0 percent, Northern BC 11 -9 percent, Okanagan 32.5 percent and Vancouver
Island 23.1 percent. Given the extensive efforts taken to reduce non- response bias, it was felt that the nurnber of respondents represented a cross-section of the farrn operators involved in agri-tourism and was suffïcient to yield meaningful results.
3.4.3 Survey Method #2 - Questionnaire to Support Agencies 3.4.3.1 Suppott Agendes' Survey Popu/aban
The sunrey population consisted of gavemment agricultural representatives, municipal and regional govemment officiais, tourism representatives and mernbers of the Chambers of Commerce from the
various regions of Bfitish Columbia.
3.4.3.2 Support Agencrés 'Researd, /ns15rumenf
Based on the review of the Iiterature, a questionnaire was
developed. It consisted of three sections. Questions in the first section were
related to the organisation that the respondent was associated with. The
second section asked questions about the organisation's involvernent with
agri-tourism andlor value-added processing. The third section obtained
information on factors that could be perceived as constrains to agri-tourism
andor value-added processing development in British Columbia.
The questionnaire was constructed with a combination of nominal, open ended and rating scale questions. A nominal question was used to detemine if the organisation would qualify. The open ended question were
designed as to not restrict the answers given by the respondents. They were used to determine the organisation's involvement in certain types of activities and the amount of their budget they allocated towards the promotion of agri-tourism and value added processing. Finally, a four point rating scale was employed for measuring attitudinal response.
Respondents were asked to circle the appropriate rating position that best reflected their views (Appendix 2). 3.4.3.3 Supporf Agencies' Queslionnai. iles@ and Pr0cedu.e
The survey was reviewed by the steering comrnittee of 8 members.
This panel of judges (government officiats from various regions of the
province) were asked to detemine if the questionnaire had any problems
with clarity, readability and content validity. This review resulted in a few
minor changes to the questionnaire.
In the beginning of November 1996, 80 people from each of the
stakeholder groups were randomly selected (every nth person), and a
questionnaire was faxed to each of them. The respondents were asked to fax back their responses irnmediately. By randomly selecting respondents,
attempts were made to increase reliability. Those respondents that did not
retum the questionnaire were phoned and reminded. If the questionnaire was still not wmpleted, they were telephoned once more.
Thirty-nine (50%) respondents from the various support agencies faxed back the questionnaire. Seventeen (37.5%) respondents did not qualify because their organisation was not currently involved with the development or promotion of agri-tourisrn or value-added processing. Of the remaining 23 (62.5%) respondents, 17 were currently involved with both agri-tourism and value added processing, 4 were involved only in agri- tourism, and the remaining 2 were involved only in value-added processing. 3.4.4 Survey Method #3 - Focus Groups This qualitative research method was used to gather information on
the constraints and opportunities of agri-tourism development. The focus
group sessions were wnducted during the last week of November, 1996 at
the regional conferences in Nanaimo, Langley, Penticton and Creston.
These focus group discussions revolved around the challenges that
presently confront farrners interested in starting or who have already
started agri-tourism andlor value-added processing businesses. Possible
solutions to overcome these constraints was also discussed. Three workshops were held in each of the regions, and each workshop averaged
15 participants. Therefore, a total of 180 people participated in these focus groups. The participants included farm operators and members from various farm support agencies, such as bankers and govemment agricultural extension field specialists. There was probably bias in the selection of the group participants, since only people attending the conference and those who wished to join the focus groups were included.
Therefore, focus groups cannot be considered to be entirely representative of the general population. While the results of these focus group discussions are not conclusive, they did provide valuable qualitative input into the elaboration on the information received with the survey techniques and an insight into a number of the constraints facing agri-tourism development and proposed several possible solutions (Appendix 4). 3.5 Limitations of Research Methods
There are limitations in the above research design. First, the farm operator's survey was initially designed and used for other purposes
beyond the sape of this study. As a wnsequence, it did not directly address al1 of the issues associated with each of the research questions. If this researcher had been afforded the opportunity, a customise suNey instrument would have been designed. Second, the research design obtained information on two types of strategies used to diversify a farm business: agri-tourism and value-added processing. Many of the respondents stated that they were involved in both sectors. By splitting the . data into two sectors, measurement errors could be introduced. Third, the sample size of those fam eaming $50,000 or more in 1995 was small (26 farms). With a sample size of less than 30, sampling errors cm exist.
Fourth, the questionnaire was conducted only in English, and not al1 fam operators are fluent in this language. Those farm operators were not able to participate in the survey. This represented a source of potential non response bias. Fifth, in hopes of increasing the response rate of farm operators, telephone interviews were conducted after respondents failed to wmplete the questionnaire. Changes in instrumentation could threaten the intemal validity of the study. Sixth, no attempt was made to determine non- response error. If time and money had pemitted, an assessrnent of non- response bias could have been conducted. One possible solution could have been to keep track of the arriva1 date of the responses. Then the late responses could be examined to determine whether their responses
differed from the earlier responses. Finally, another type of non response
error that this study had to contend with is item non-response, since some
parts of the questionnaire were incomplete or were retumed with minimal
information provided. Unfortunately, budget restraints did not allow the
respondents, who submitted the incomplete questionnaires, to be contacted
so that their responses could be obtained and recorded.
3.6 Data Analysis
Prior to analysing the data, a value of $50,000 gross revenue was
deemed an appropriate benchmark for defining the financial success of
agri-tourism operations for two reasons. First, in 1995 the Ministry of
Agriculture, Fisheries and Food classified BC farms into two categories:
those fams with yearly incornes of $50,000 or less and those farms with
yearly incomes of $50,000 or greater. The Ministry also noted that the
number of fams with incomes greater than $50,000 exceeded those ttiat
eamed less than $50,000. Second, the survey instrument sent to BC farrn
operators had five interval categories for estimating 1995 gross revenues
generated from agri-tourism. The range of gross revenue within each of
these intervals was very broad (8.g. $50,000-$250,000). The rnajority of
respondents selected the $10,000 to $50,000 category. To address only those fann businesses which were top performers, a minimum value of $50,000 was chosen as the criteria for a financially successful agri-tourisrn
operat ion.
Following the retum of the questionnaires, nonparametric statistics
were used to.analyse the data. To reduce threats to the extemal
validity/generalizability of the survey, one penon coded the responses. The
data derived from the self-administered surveys were analysed using SPSS
statistical analysis tools. Various statistical tools were utilised depending on
the type of information and analysis required.
Table 3.1 lists the various analytical techniques used in each phase
of the research.
Table 3.1 Statistical tools used in the data analysis.
SECTION TYPE OF ANAYSIS USED
Section 4.2 Frequency I Definition of Sample and Sample Size Section 4.3 Frequency /percentiles Profile of Successful Agri-tourism Operations Section 4.4 Chi-square t-test, Analysis of VarÎance Differences between Agri-tounsm (ANOVA)~
'ANOVA and Chi-square çtatisücs were utilized to test for statistically significant differences at the p0.05 IeveI of significance. An F value in a table indicates that an ANOVA was carried out (comparing mean responses), whereas a chi-square value indicates that a chi-square was utilized (comparing proportion of responses). 'Content analysis sets up categories that appear to be salient to a particular piece of communication (Lorimer & McNulty, 1989). Wth categories in place, the researcher then wunts vafious types of occurrences. Based on a frequency wunt, a quantified version of the data is obtained. 3.7 Summary
Multiple techniques were used to gather data: an analysis of the literature was undertaken, surveys were sent to farm operators and support agencies and focus groups discussions were conducted.
The purpose of the surveys sent to BC fam operators was to gain greater understanding of the cuvent economic status of fam based businesses involved with agri-tourism and value added processing.
The purpose of the survey sent to different support agencies in the province was to determine the extent of the organisation's involvement in certain types of activities and their perceived constrains to farm-based agri-tourism and value added processing development.
Focus groups were used to gather information on the constraints and opportunities of agri-tourism development.
Nonparametric statistics were used to analysis the data. Chapter 4
Survey Results
4.1 Introduction
This chapter presents the results of the surveys. It is divided into five sections. The first section describes the sample and sample size. The second section provides a profile of those farms that generated gross revenues of $50,000 or more from agri-tourism in 1995. The third section discusses the differences between the agri-tourism farms that are financially successful (gross revenues of $50,000 or more from agri- tourisrn) and those that are financially less successful agri-tourism operations (gross revenues of less than $50,000). The final section outlines the survey results related to the perceptions of agri-tourism support agencies and compares these results to the qualitative data originating from the surveys sent to BC farm operators.
4.2. Definition Of Sample And Sample Size
6.2.1 Definition of Sample
For the purpose of this study, the agri-tourism sample was defined as respondents who operated only an agri-tourism business or both an agri-tourism and value added processing business. As Table 4.1 illustrates, overall there were 72 agri-tourism respondents and 64 agri-
tourism and value added respondents included in the sample investigated.
Table 4.1 Type of farm.
TYPE OF FARM BUSINESS I n U 1 Bath an agri-tourism and value added processing business 64 ûdy an agri-to& business 72 ûniy value-added processing 32 Total 168 ,
4.2.2 Definition of Agriitourism Businesses
A financially less successful agi?-fourism business was defined as a farm operation with an estimated gross revenues in 1995 from agri-tourism of $50,000 or less. A financially successful agri-tounsm business was defined as a fann operation with an estimated gross revenues in 1995 from agri-tourism greater than $50,000. Based on these definitions, 75 percent or 85 of the fams induded in the sample were deemed financially less successful, and 23 percent or 26 of the farrns were considered to be financially successful businesses (Table 4.2).
Table 4.2 Distribution of agri-tourism businesses by gross revenue.
TYPE OF AGRI-TOURISM u BUSINESS Financiaiiy less suGcessful S$50,000 1 85 I
'small cell size 4.3 Profile of Financially Successful Agri-tourism Operations
This section provides information on the 26 agri-tourism operations
in British Columbia who responded to the survey and had gross revenues in
1995 of $50,000 or greater. It also addresses the primary research
question: What factors differentiate successfuI agri-tourism operations from
Iess successful ones?
4.3.1 Type of Fann
The results indicated that the majority (61Oh) of financially successful farms tended to undertake only agri-tourisrn activities, rather than to
incorporate both agri-tourism and value added processing in their operation
(Table 4.3). In 1996, only 38.5 percent of those farrn operators who
responded operated both an agri-tourism and vatue added processing
business.
Table 4.3. Type of business. - FINANCIALLY TYPE OF BUSINESS SucCESSm* % Both ami-tourism and VAP 38.5 Agri-tourism only 1 61.5
4.3.2 Types of Acfivities
Agri-tourism businesses in BC provided three broad groups of on- farm activities and can be categorised into similar groups to those used by Cox and Fox (1990). These pursuits included tours, retail sales and
activities. Within these three broad categories, financially successful agri-
tourism businesses tended to develop a wide range of on-farm activities
(Table 4.4). In fact, a large proportion of them provided farm gate produce ,
(80.8%), farm tours (76.9%) and retail sales (53.8%). Other activities
included picnic areas (38.5%), festivals/fairs/events (38.5%), u-pick
(46.2%), educational workshops (30.8%), animaIlnature displaybetting zooslrides (34.6%) and display gardens (30.8%)(Table 4.4). Conversely, few financially successful agri-tourism fams operated bed and breakfast operations (3.8%) or undertook other activities (0%).
Table 4.4 Type of agfl-toutism activities.
Famgate produœ sales (fitstands) 80.8 sales (e.g. T-shirts, crafts) Other retail gifts, 53.8
' Guided Earm tours 42.3 r Picnic areas 38.5 38.5 Seif guided tours 34.6 AnimaVriature dispiaydpetîhg zoodrides 34.6 Education workshops (e.g. pruning, dried flower 30.8 arrangement, wooispinning) -- - Display gardens (eg. herbs, landscaping) 30.8 Agricuiturai heritage exhiiiîs 23.1 1 Bed & Breakfast 1 3 -8 4.3.3 Amount of Time Visifors Spent on Fam
On average, visitors to the financially successful agri-tourism
operations tended to spend less than an hour on the farm (Table 4.5).
Relatively very few tourists spent four hours or more at an agri-tourism
operation.
Table 4.5 Amount of time spent on farm.
4.3.4 Months of Operation
In general, financially successful agri-tourism operations tended to be open for business year round (Table 4.6). The largest proportion of the financially successful agri-tourism operations were open in July. The summer months of June and August and the fall months of September and
October tended to be busiest months for these agri-tourism operations.
These busy agri-tourism times coincided with busy crop production times. Table 4.6 Months of operation.
1 Jtme 1 87.5 1
4.3.5 Running the Agri-tourisrn Operation
Successful agri-tourism operations appeared to be family run operations (Table 4.7). In fact, the farrn operator (62.5%) and spouse (54%) spent the most time running the agri-tourism business. Apparently, few siblings (8.3%) spent time running agri-tourism businesses. Employees were hired in only 16.7 percent of thefinancially successful operations.
Table 4.7 Time spent running agri-tourism operation.
SUCCESSFUL *
Employees 1 16.7 1 4.3.6 Number of Years in Operation
On average, financially successful agri-tourism operations tended to
be in business for almost 14 years (Table 4.8).
Table 4.8 Mean nurnber of years in operation.
TYPE OF AGRI-TOURISM YEARS IN OPERATION* BUSINESS (MEAN) Financidiy çuccessful 13.8 *n=26
4.3.7 Marketing Promotion
Al1 of the financially successful fam operations used word of mouth
as a marketing technique. Financially successful agri-tourism operations
used the following marketing promotions: signs (95.5%), newspaper
advertising (79.7%), tourism related publications (72.2%),brochures
(71.4%) and agricultural related publications (57.9%) (Table 4.9). Direct mai[ marketing (42.1 %) was the least used marketing tool.
Table 4.9 Marketing activities.
-G PROGRAM (LEVEL OF PARTICIFATION = A LOT OR SOME)
Word of mouth
Tourism relateci publications Brochure-s Agricuihiral reiaîed publications Consumer and trade show &'bits Direct mail campaign Approximately half (50%) of the financially successful agri-tourism
operations claimed to have foned partnerships with other businesses to
promote their agri-tourism produds and services (Table 4.1 0). The other
half (50%) did not take advantage of working with other businesses.
Table 4.10 Partnerships with other businesses.
FïNANCLALLY WORK WITH OTHER SUCCESSFUL* BUSINESSES I % . Yes 50.0
* n=24
4.4 Differences Between Agri-tourism Operations
This section outlines those factors which appear to differentiate
financially successful agi-tourism businesses from their financially less
successful wunterparts. It attempts to answer the following questions:
Does geographical location affect the financial success of an agri-tourism
operations?
Does farm size affect the financial success of an agri-tourism operation?
Does the type of farm activities affect the financial successful of an agri-
tourism business?
9 Do the months of operation affect financial success?
Does the number of years that a fam has been operating affect the
financial success of an agri-tourism operation? Does the nurnber of tourists determine the financial success of an agri-
tourism operation?
O Does the number of ernployees affect the financial success of an agri-
tourism operation?
Do financially successful agri-tourism operations in BC anticipate future
business growth?
4.4.1 Madel of Difierence
Analysis of variance (Anova) tests indicated there were significant
differences between the two groups in geographical location, capital
investrnent, number of activities, types of activities, months of operation,
number of tourists, average daily revenues, number of employees and
business growth (Figure 4.1).
of adivities type of acüvities business growth
Financially successfu I factors geographical location
months of operaüon # of tourists
Figure 4.1 - Factors Aflecting Financially Successful Agri-toudsm Operations 4.4.2 Geogtaphical Locaffon
The location and number of respondents from each of the five designated regions is illustrated in Figure 4.2. Analysis of the variance indicated that the Kootenay region was significantly more apt to have higher gross agri-tourisrn revenues than any of the other regions (Table 4.11). In fact, the Kootenays' gross agri-tourism revenues were alrnost twice the gross agi-tourism revenues of the Lower Mainland and Okanagan regions, three times that of Vancouver Island and almost ten times higher than revenues generated in the North.
Figure 4.2 Geogmphicrl kgions of British Columbia Table 4.1 1 Geographical regions.
- ESTIMATED GROSS AGRI-TOURZSM REGIONS n SIG. REVENUE (WEIGHIED AVERAGEIN 6s)
1 I 1 I Lower Mainland 1 28 1 57750 North 1 13 1 14091 1 1
Vancouver Island 28 43333
4.4.3 Fann Business Size
For the purpose of this study, fam business size was defined as a form of total capital investment. In other words, larger agri-tourism businesses were those operations that invested more capital into their farrns operations.
In 1995, financially successful agri-tourism operations were more apt to have significantly greater total capital investment (e.g. investment in facilities) than the financialiy less successful agri-tourism operations (Table
4.12). For this same year, financially successful agri-tourism businesses appeared to have greater operating expenditures (e.g. wages, salaries and marketing promotions) than the not so successful agri-tourism operations
(Table 4.12). While not statistically significant, in 1995 the capital expenditure (0.g. expenditures on buildings and equipment) for financially successful agri-tourism operations was on average $9,000 less than the less successful businesses (Table 4. t 2). Table 4.12 DWerence in fann business size.
AVERAGE EXfENDrrURE(Q F 1 Sig
--• I )rotal Capitai in- (Li 199 5 And Tohi To :Date)Asochtd With Agi-TO& Wisinrrr: Facilitics (building stands, wsshrooms) 56778.6 42 89736.5 15 0.3 197 Processing f&cilitiesand cquipnmt 12609.5 42 67200.0 15 1.8333 (eq~ipUl=G traits, ri- mg 1804.9 41 7952.4 15 3.3090 live)- Othercapitd expaiditurrs 8250.0 JO 167245.7 15 3.8693
.Opaatuig Expcndihircs Associattd With Agi-
4.4.4 Types of Activities
Anova results indicated that the financially successful farms were
significantly more apt than the financially less successful operations to
undertake agricultural heritage exhibits, education workshops, other retail
sales and display gardens (Table 4.1 3). Table 4.13 Difference in types of agri-toufism activities.
ACTMTES AND SUCCESSFLJL ATTRACTIONS SUCCESSFUL* ** Guided farm tom 40.0 42.3 0.04399 0.83388 Self guîded tours 20.0 34.6 2.37107 O. 12360 Bed & BrealGast 12.9 3.8 1.70807 O. 19 124
Education workshops 12.9 30.8 4.46048 0.03469*** (e.g. pnraing, ciriecl flower arrangement, woolspiMhg) Farmgate produce 70.6 80.8 1.04638 0.30634 des (fitstands) ûther mail des 3 1.8 53.8 4.16762 0.04120*** (e.g. T-shirts, gifts, -1
When the number of activities was examined and compared, financially successful agri-tourism businesses were significantly more apt to undertake a Iarger number of agri-tourism activities than financially Iess successful farms (Table 4.14). In fad, the financially successful farms provided on average 1-3 more activities for tourists to enjoy than their munterparts. Table 4.14 Number of activities.
N[iMBER OF AGRI- TYPE OF AGRI-TOURISM F ToURISM BUSINESS (AVERAGE) IG1 Financialiy less succesdul* 3 -3 6.0530 O.OIS*** Financialiy successful** 4.6 I
*** indiates signiticant at .O5 level of pmbabiiiw, ** n=26 * n=85
4.4.5 Months of Operation
Chi square tests indicated that the two groups did not differ significantly in any of the months of operation except June. For that month, financially successful agri-tourism operations were significantly more Iikely to be open than the financially less successful agri-tourism operations
(Table 4.15).
Table 4.15 Difîerence in montbs of operation.
'** Indicates signincant at .O5 level ofprobability; **n=24 n=82 4.4.6 Number of Toutisfs and Revenues
Financially successful agri-tourism operations on average had more
tourists visit their fams. As a result, in 1995 financially successful agri-
tourism farms' daily average revenue was more apt to be statistically
significant than the financially less successful farms (Table 4.16). However,
the less successful farmer's average daily revenue per visitor tended to be
higher than the financially successful operations.
As noted in section 4.3.3, Arnount of Time Visitors Spent at Farm,
visitors to financially successful operations spent on average less than an
hour on the farm. Apparently, financially successful agri-tourism operations
are able to attract a significant number of visitors per day, but these visitor
on average spend less money at these fams.
Table 4.16 Customers: volumes and revenues.
I 1 MEAN WSPONSE BY BUSINESS TYPE Ficially Iess n Financially n F Sig. sud su-
55.4 62 139.5 16 3.51 12 0.0648
1 237.2 53 1180.4 17 39.7542 O.OOOo*
griltourism and value-
Average daüy revenue 12.7 47 11.2 13 0.1100 0.74 14 ner client in 1995 hm gri-tourissl and value-
* IndiCates SigniScant at .O5 level of probabiiity. 4.4.7 Number of Employees Financially successful agri-tourisrn operations were significantly more apt to ernploy more people to help run their agri-tourism operation than less successful farms (Table 4.1 7). On average, these successful operations employed 3.4 more employees than their counterparts.
Table 4.17 Dinerence in number of employees.
NUMBER OF AGRI-TOURISM TYPE OF AGRI-TOURISM 1 EMPLOYEES (AVERAGE) 1 F 1 SIG. BUSINESS
1 -
I- 1 1 1 *** Indicates signifiant at .O5 level of probabiliv, ** n=26 * n=82
4.4.8 Business Growth
Financially successful agri-tourism businesses were significantly more apt ta have experienced business growth in 1995 than the financially less successful businesses (Table 4.1 8).
Table 4.1 8 Business growth in 1996.
*** Indicates signifiant at .O5 levei of probabiility; ** n=22 * n=74 Interestingly, the financially successful fanns did not anticipate growth in
the business in 1996, hilethe less successful farms were expecting their
businesses to grow in 1996 (Table 4.1 9). The result were not statistically
significant. Nevertheless, it appears that the financially successful agri- . tourism operations believe they have captured as much of the market as
possible.
Table 4.19 Anticipated average growth in business in 1996.
TYPE OF AGRI-
*n=48 **n=15
4.5 Support Agencies
4.5.1 Support Agencies' Perceptions of Consfraints
The responses supptied by the support agencies provided insight into the opportunities and strategies that could be used to strengthen agri- tourism development in British Columbia. The results presented in this section of the study addressed the second primary research question: What strategies should be developed to encourage diversification into agri- tourism?
Over half (54%) the organisations that responded were currently involved with agri-tourism development. The vast majority (86%) of the respondents were involved in providing marketing support to agri-tourism operations. Over three quarters (76%) provided technical support to farmers, and just over half (52%) provided training support. Financiat support was the least supported initiative, for only 43 percent of the agencies were involved in activities or program in this area (Table 4.20).
Table 4.20 Initiatives undertaken by support agencies.
Support for agri-tourism development varied frorn agency to agency
(Appendix 4). Nevertheless, 86 percent of these organisations anticipated that the agri-tourism sector would grow in the next five years. Regardless of the anticipated growth, several constraints to this growth were identified by the support agencies. They are described in Table 4.21 and the following paragraphs in this section. Table 4.21 Support agencies' perceptions of constraints.
Limited awareness of product & service standards Limited on-farm capabilities to 4.5 develop the products & services needed Lirnited awareness to market 27.3 68.2 21 products 8 services effective1y Limited awareness of types of 4.5 45.5 41 21 partnenhips needed to promote 1 1 1 1 products Limited awareness of how to 4.5 40.9 40.9 20 develop partnerships Limiteci awareness to provide 4.5 59.1 31-8 21 quality service 1 Limited awareness of new trends 50 45-5 21 in aqri-toun'srn Lirnited financial support 4.5 31.8 40.9 17 Limited liability insurance 4.5 40.9 22.7 16 Limited awareness of existing 8 4.5 45.5 40.9 20 emerging products 8 servick Limited awareness of potential 40.9 45.5 19 opportunities & costs 1 Visitors attitudes rnight cunflict 36.4 27.3 27.3 20 with fame& Visitors behaviours might 27.3 45.5 18.2 20 conflict with farmef s lifestyle 1 Agri-tourism business might 40.9 13.6 18.2 1 16 overburden the workload of farm women Agri-tourism business might 45.5 18.2 13.6 17 ovehurden the workload of fann children 1 Agri-tourism might confiict with 22.7 31.8 31.8 1 19 famer's workload Agri-tourism may cause 59.1 27.3 4.5 20 environmental damage Govemrnent regulations rnay 9.1 40.9 36.4 19 make agri-tourisrn impracücal Limited capabilities of fam 13.6 31.8 50 21 inf~stnicture Might mate conflict with other 22.7 40.9 18.2 18 operations and production 1 1 1 1 practices Might create conflict with 27.3 27.3 18
Overall, the respondents identified the top development constraints
to be: 1. Limited awareness of how to market products and services effectively
(68%).
2. Limited awareness of product and service standards in order to compete in
the marketplace (5Q0!).
3. Limited capabilities of farm operators to develop the products and services
needed to compete in the marketplace (50%).
4. Limited capabilities of fami infrastructure (e.g. roads, parking areas,
sewage and water services) to handle agri-tourism dernands (50%).
Generally, about a third (37)sof the agencies interviewed
considered government regulations to be a constraint, while another two
fihs (41%) claimed that the lack of financial support for farmers hindered
agri-tourism development. About a third (32%) of the representatives from
these organisations felt that wnflict with the farmer's workload would be a
barrier to increasing in agri-tourism development in their jurisdiction.
4.5.2 Farm Opedors' Perceptions of Consfrainfs
The open ended questions at the end of the fam operator's survey
provided qualitative information on the farm operator's.perceived
constraints to developrnent (Appendix 5). A content analysis of this
information suggested a set of dominant themes to development constraints
(Table 4.22). Table 4.22 Fann operators' perceptions of constraints.
The top four thematic constraints in order of frequency of occurrence
that farrn operators identified were:
1. Government regulations (58%) reiated to health rules pertaining to the
handling of the products; and government laws pertaining to land use,
regional district zoning, building development, signing, employment, permit
and license issuance and interpretation.
2. Prohibitive start-up costs, as well as exorbitant capital and on going labour
costs of agri-tourism development (36%).
3. The lack of time to actively participate in such farm-based tourism
businesses (16%).
4. The lack of marketing awareness needed to promote their products and
services effectively (8%).
4.5.3 Cornparison of Constraints
When the results emanating from these two surveys were compared,
what support agencies believed to be the constraints to agri-tourism development differed from what farm operators believed to be wnstraints.
Suppnrt agencies stated that the number one factor constraining
opportunities for effective development of agri-tourism was Iimited
awareness of how to market products and services effectively (68%). Farm
operators, on the other hand, mentioned marketing as a constraint to
development to a much lesser extent.
Farmers resoundingly stated that government development
regulations and operating requirements made agri-tourism development
difficult and an impractical business strategy. However, only 36 percent of
the support agencies considered government regulations to constraint agri-
tourism development.
The second most often mentioned constraint by farm operators to
agri-tourism development was financial costs. Less than half (41Oh) of the
support agencies respondents believed that limited financial support
deterred agri-tourisrn developrnent.
The concern that agri-tourism developrnent rnight wnflict with farmers work loads dwing the busiest period of the year and overburden the workload of farm women and children was not wnsidered a constraint by support agencies. Less that one quarter (18%) of the respondents thought it would increase the workload of farm women. Just over one eighth of them (14%) believed that the workload of farm children would increase.
Under one third of the agencies intewiewed (32%) stated that adding agri- tourism development into the fami business strategy would conflict with a famer's workload. Farm operators, on the other hand, deemed time to be a major constraint to agri-tourism development.
4.6 Summary
Overall, financially successful agri-tourism operations tended to undertake specific agri-tourism activities, be open for business often and for greater numbers of years, be family run operations, use specific marketing techniques and partnerships with other businesses to promote their products and services.
Differences between the financially successful and less financially successful agri-tourism operations included: geographical location, capital investment, nurnber of activities, types of activities, months of operation, number of customers, average daily revenues, number of employees and business growth.
What support agencies believed to be the constraints to agri-tourism development differed frorn what fam operators believed to be constraints to development. Chapter 5
Management Implications
5.1 Introduction
This chapter outlines potential management implications associated
with the findings of this study. It is divided into two sections. The first
section discusses a management strategy hich encourages farm
operators to pursue economies of scope rather than economies of sale.
The second section proposes the creation of strategic alliances to address
several of the constraints which were identified in the literature review and
in the survey results. Comments that have an asterisk next to them implies
that this particular strategy was suggested by the regional focus group
participants as a possible solution.
5.2 Economies of Scope
Deciding which goods to produce, in what quantities and how to
produce them are centrai problems facing business managers. In some
cases, the production of one produd may affect the cost of producing
another. Under these circumstances, it is often cheaper for a business to
produce a number of different commodities together rather than to produce them separately. The savings acquired through simultaneous production are calIed economies of scope (Stiglitz, 1993; Baumol et al., 1991; Lipsey et al., 1982). This concept explains why certain activities are undertaken by
a company.
In the agricultural sector, sorne products are naturally produced
together. Thus, a sheep farm naturally produces wool, lamb rneat and
mutton. If more lambs are slaughtered for rneat, there will be less wool and
less mutton. In agri-tourism, economies of sape occurs when farm
operators combine several activities in order to provide the visitor with a
farm experience. For example, an apple producer may give visitors a
guided tour of the orchard, allow customers to pick or purchase fruit and
invite people to an apple blossom festival. Together, these activities add
value to the tourism experience.
5.2.1 Economies of Scope as a Management Sfmfegy
Agri-tourism cannot be considered a panacea for al1 the financial
difficulties that BC farm operators face. Nevertheless, as this research
illustrates, for some BC farms, tourisrn can open up new ewnomic
opportunities. However, combining tounsm and agriculture implies
organisational challenges.
Economies of scale have been central to the success of many traditional tourism businesses. However, to achieve these economies
several consequences such as escalating costs, environmental damage and the disaffection of tourists can occur (Hummelbninner & Miglbauer,
1994). Agri-tourism development provides fami operators the opportunity to pursue a different economic strategy - one that emphasises economies of
scope rather than economies of scale. By using an economy of scope
approach, emphasis can be placed on rnaximising opportunities for visitors
to spend money at fams rather than on maximising the number of tourists
that visit farms.
In such a strategy, the role of farm operators in agri-tourism
bewrnes clearer. Fam-based tourism products and services need to be
developed and extended to attrad and hold existing and potential demand.
Examples of several strategies that would be conducive to achieving
ewnomies of scope include:
Organising partnerships with other businesses in the area. Farm operators
tend to be individuais who often prefer to work independently.
Unfortunately, problems arise when a piecemeal and fragmented approach
is used to develop and promote agri-tourism. To achieve ewnomies of
scope, agri-tourism operations must develop efficient linkages with other
businesses in order to create a more cornprehensive set of tourism
products. Development plans should be integrated and co-ordinated to
include al1 actual and potential faners that provide accommodation, activities, events andlor services which tourists might use. Successful CO- operation and collaboration among businesses can offer an attractive range of activities and services to visitors and take advantage of lower costs. Collaboration between businesses is already taking place in several parts of the province. For example in the Similkameen Valley, a group of fam neighbours have joined together and designed a thematic route guide.
Collaboration between these different agri-tourism operations allows visitors to experience a wide range of agri-tourism activities: display gardens, historical exhibits, ostrich ranches, bed and breakfast accommodations and winery tours. On Saltspring Island, fan operators have joined with local artists. Visitors are able to follow a route around the island to different fam locations where they might decide to spend the night, watch a local artist at work andlor purchase fann producel local
Cfafts.
Providng a vatied range of produds and services thaf would provide farm visitors with 'expenence aftnbutes' which make for cusfomersatisfaction.
The results of the survey suggests that the majority of the farm visitors spend less Vian an hour at an agri-tourism operation. To keep wstomers longer and retuming often, farm operators need to continually develop new products and services, while finding new potential uses for the existing ones. For example, visitors to the area may be interested in the local fiora or fauna. Agri-tourism operators may wish to capture this market by having personnel available to put on educational workshops, give tours or provide information on this subject matter. Establish proâucts and services qua/@ control. The results of the survey
illustrated that almost al1 of the agri-tourism fam operators used word of
mouth as their prirnary marketing technique. However, good word of mouth
requires satisfied customers. Since customers visiting fams are concemed
with getting good value for their money, it is important to develop a high
quality product or service that promotes the following factors: authenticity,
involvement, Iearning, fun, value and hospitality (Figure 5.1). Together,
these factors provide visitors with a high quality fam experience
Leaming
Source: adapted from Mahoney, Ed (1994) unpublished presentation on agri-tourisrn. Conference funded by the Direct Market Agricultural Association in Pentidon, BC.
Figure 5.1. Factors of an Agri-tourism Experience
Enmuraging innovation. Innovation involves being first to bring new
products and services to the market. But sometime being quick to follow can be just as important as being first to the market. Therefore, agri-tourism operations should not just imitate existing businesses. Instead, they should improve upon the existing practices of successful agri-tourism operations to
achieve their own unique profile - a profile that is based on their own
resources and strengths. New products and services couid include the
opening of new market segments (e.g. disabled persuns, grandparents . travelling with grandchildren) or new organisational foms (e-g. agri-tourism
operators joining with recreational enterprises).
Developing a "Code of Conduct" among agri-tourism operators to eensure
fhaf operators meet certain standards. Today's consumers are more experienced and are harder to please (Poon, 1993). If they are not satisfied, not only do they not buy, they take their business elsewhere. A
"Code of Conduct" would ensure that qualify rather than quantw is the key component of fam-based tourism.
5.3 Strategic Alliances
Creating strategic alliances is imperative if economies of scope are to be realised by BC farrn operators. Networks need to be organised which link agri-tourism operators together with related tourisrn operations or seemingly unrelated government or business agencies. Once agri-tourism operations are strategically aligned, mutual benefits can be realised, such as the pooling of resources, trading of information and marketing initiatives.
Competitive strategies extend the operating amis of those involved allowing them economies not possible to those operations working on their own (Poon, 1993). Strategic alliances building evolves through at least three stages: formative, strategic planning and ongoing developrnent
(Figure 5.2). Agri-tourism in British Columbia would be classified as being in the formative stage of alliance building. In this early stage, potential partners corne together in an attempt to reach common objectives, such as reducing risk, gaining skills, creating economies of scale or scope, building eficiency and fiexibility, encouraging organisational learning, exercising control and stirnulating synergy (Prescott, 1997).
1 Formative Stage of Alliance Building (
search activities
1 Ongoing ~evelopment1 M= present and potential players in BC agri-tourism development
Reasons for seeking alliances: reduœ risk, gain skills, economies of sale and scope, efficiency, flexibility, organisational leaming, exercise wntrol, synergy
Source: adepted fmrn Mike Prescottt (1997) .Alliance Building Stages -Charaderisticsa. unpublished manuscript. SFU Business Administration.
Fioure 5.2. Strategic Alliance-Building Stages A3.1 Strafegic AIliances as a Management Strategy
The results of the survey attests to the fad that the relationship between agriculture and tourism is a cornplex one. Support agencies and farm operators both agree that the constraints and challenges facing agri- tourism development in British Columbia are numerous and should not be underestimated. However, what the support agencies believe to be constraints to agri-tourisrn development differs from what the fam operators believe are the challenges.
A management strategy that would help to overcome some of the constraints to agri-tourism development is the creation of strategic partnerships or alliance. This strategy would bring together agri-tourism operators, agriculturalitourism associations and govemmental agencies.
Together, they would be able to identify and tackle issues specifically related to agri-tourism development (e.g. the challenges of isolation and small business size). Co-operation and collaboration arnong al1 groups involved would be central to the success of this management strategy.
5.3.2 Strategic Alliances between Agriculture and Tourism Sectors
Agri-tourism combines two sectors: agriculture and tourism. The development of strategic alliances between these two sectors is just beginning in British Columbia. For example, a group of fam operators in the Comox Valley get together once a year and invite visitors to tour the participating fams, see how food is grown and participate in the hawest
(Business Farmer, 1996).
Developing a hawest tour by farm operators is just the beginning.
Strategic alliance could be created between tourism businesses and interested government agencies to deal with the issues of marketing and quality standards.
An economic strategy that emphasises economies of sape can be considered a strength in relation to sustainable tourism. However, economies of scope can also be considered a weakness men it comes to the marketplace, for in some cases operators may have difficulty effectively reaching their target market.
A w-operative marketing organisation needs to be established to promote farm holidays, activities and events and to matean image of an attractive and interesting tourist product which is of good quality. Alliances can take place on several levels: local, regional and provincial. At the local level, fanns can fom alliances with other farm operators in the area. An example is local farmers markets. At the regional level, alliances can be c~eatedbetween fams and business associations, such as the Chamber of
Commerce, 4-H Groups, Cattlemens Association, County Fairs and Hawest
Tours. Finally, strategic alliances can be fostered between fams and other developrnent focused organisations, such as Community Futures and financial institutions. Al1 of these organisations must have access to enough resources to enable them to disseminate the agri-tourism products and services efficiently and to influence consumer attitudes in such a way to promote an 'experience holiday' image.
Strategies to develop agri-tourism business in BC might include:
Creating and fostering a partnership with regional Direct Market Agricultural
Associations and/ or develop a comprehensive farm tourism association to promote linkages between food producers and tourism businesses in the province. This strategic alliance would allow agri-tourism members to share ideas, as well as facilitate the sharing of enquiries.
Co-ordinating and organising marketing organisations at the local, regional and provincial level to spread the message of agri-tourism. These organisations must have enough resources that will enable them to disseminate the product efficiently and influence consumer attitudes. The
Austrian Farm Holiday Association is an excellent example of a marketing organisation that promotes farm tourism. It is a CO-operativesupport system which links individual farm businesses at the regional, provincial and federal IeveI and provides a range of services to its members (Bramwell,
1994).
Creating specific product development plans based on research and the needs of the consumer. This strategy will require farm operators to shift their thinking from "selling what we can produce, to selling what we can selln (Bramwell, 1994:4). Once again, in Austria 'tourist products' have been
developed to meet specific demand and target markets. Package deals which include fishing or skiing activities have been developed and
prornoted for those fams located near a lake or ski hill (Embacher, 1994). ,
Developing a coordinated system for collecting visitor information. * The
rnotor of marketing is custorner needs (Gannon, 1994).Therefore, agri- tourism operators must build their product based on market research of farm visitors. In Austria, the provision of market research is on of the main tasks of The Austrian Fam Holiday Association at the federal level
(Embacher, 1994).
5 3.32 Issue: product quaJi
Potential customers require some objective evaluation of the facilities and services offered. To provide customers with some objective evaluation of a fam's facilities and to give more advice and guidance to farms, a province-wide unifom system of quality standards (similar to the systern of stars used for hotels) could be developed. One example is the development of a quality standards sign system. The criteria for the quality standards wuld be determined by the agri-tourisrn operators in conjunction with consultants from BC's Department of Small Business, Culture and -
Tourism. These signs would provide potential customers with a wide range of information, such as type of accommodation, services available and surrounding attractions5. Visitors could then identify the agri-tourism
product or service that would best suit their needs.
A quality rating system for agri-tourism operations is not a novel
concept. France, Gennany and Austria have each developed their own type
of system. In France, fam guest accommodations are rated using symbols
of corn to indicate the standard of dwellings (Wrathall, 1980). The standard
of an Austrian farm accommodation is indicated by the number of flowers a
property is assigned (Embacher, 1994). In Baden-Wuerttemberg, Germany,
quality standards are maintained by having farm operators apply for
certification and the right to display a quality sign (Uhlig, 1992).
Strategies to be undertaken by BC agri-tourism operators might include:
Producing product development guidelines for use by agri-tourism
operators, including self assessment and accreditation programmes.
Striving for a tourism experience which incorporates the farm experience with the surrounding area and communities. By linking accommodation, facilities and activities together, visitors would be able to participate in a wide variety of activities. This strategy would permit agri-tourism operations ta widen their market and lengthen their season.
Developing networks sessions to discuss changing consumer
Unfortunately, most rating system do not enwmpass hospitality which is central to the Yarm experience'. 5.3.3 Grtemal Strategic Partnerships
Strategic alliances also need to be organised with support
organisations, such as financial institutions, insurance agencies, regional
and provincial associations and govemment agencies.
53.3.? Issue: obhinhiig financial support
The findings of the survey administered to support agencies and
farm operators suggested that la& of financial support was a major
wnstraint for farm operators who wished to diversify into agri-tourism. Less
than half the support agencies provided any financial support for agri-
tourism developrnent. This is an unfortunate situation since depending on
the nature of the agri-tourism venture, substantial investment may be
required.
Banks may be hesitant to invest capital in many different agri-tourism
projects. ~herefore,the provincial agencies need to pmvide financial aid to those farm operators who wish to diversify into agri-tourism or renovate their existing agri-tourism businesses. Financial support would not only aid
in increasing the supply of agri-tourism in BC, but it would also aid in
increasing the qualify of the supply. Providing financial aid for agri-tourism development is not a new concept. In Belgium, Portugal, Italy, Spain and
France have al1 adopted a comprehensive system of financial incentives
(Greffe, 1994). Strategies to develop alliances with banking institutions might include:
Encouraging banking institutions to work with existing and potential agri- tourism operators in developing good business plans. Develop relationship with bank managers by bringing them to the farm to see existing and proposed operations.'
Persuading govemments (local, provincial and federal level) to assist agri- tourism operations in the renovation and extension of agri-tourism supply conditions in order to attract and hold on to the demand from better-off socio-economic groups.
Providing a central location where present and potential agri-tourism operators could find information on the availability and requirements of existing loans and programs.
5 3.32 issue: liabiZ& management
Businesses open to the public require operators to have liability insurance in order to protect themselves from the costs resulting from a customer being injured on their property. A regular farm or homeownets liability policy is not adequate for a business in which customers will be coming onto the property. Additional insurance coverage will be necessary, and a risk management and liability protection program will need to be developed. Strategies to encourage alliances with insurance companies:
Encourage agri-tourism operators to work closely with insurance agencies
to develop risk management and liability insurance programmes. Have
insurance agents corne out to the fam to see the operation. This step will
ensure that an agri-tourism operation has the proper coverage.
Consult legal experts on how to develop liability waivers if visitors take part
in risky on-farrn activities (e.g. horseback riding).
Examine the potential of developing a group approach to minimising
insurance costs."
53.33 /sue: Mining and edu~abn
Diversification into agri-tourism is not an easy option. If the full advantage of agri-tourism development is to be realised, fam operators will have to ensure that they provide 'professional' service. Therefore, seminars, courses and workshops will be needed so that farmers and their employees cm gain a better understanding of certain tourism issues, such as customer are, sale service, promotion and marketing. In Australia, fam operators have the opportunity to take a course aimed at providing better service. The program is called Aussi Host and is supported by the lnbound
Tourism Association of Australia and the Department of Tourism, Quantas and the Australian Tourist Commission. Its objective is to provide fann operators with an understanding of how to handle difflcult customer situations (Williams, 1996a, Palmer 1995). For many famers and their families, new skills will have to be
leamed prior to starting a new business. Some farmers will need advice on how to get started, and for other famiers, support will be needed during the post-start-up period. To provide this advice and support, authorities will . have to organise advisory and training services by mobilising a substantial network of consultants and experts. Training sessions will need to be arranged on a local or regional level where there is a better knowledge of interests and demand. Workshops could include such themes as pricing policies, retail trade, marketinglpromotion and management techniques.
Training of certain skills, which could be passed on to the visitors (such as weaving, spinning or dry flower arranging), could also be incorporated in these training sessions.
Strategies to develop training opportunities:
Develop links with BC tourism associations and other industry bodies to access training opportunities. Sessions could allow fam operators to upgrade skills needed to manage their agri-tourism operations effectively.
Some tourism training programs are already in existence in BC. For example, the Good Host program is offered by the local Chamber of
Commerce in many parts of the province. fam operators could access these training programs.
Co-ordinate regular meetings to keep members inforrned of the Iatest agn- tourism developments and training sessions.
93 Work with local colleges that have an agricultural departments to develop
specific agri-tourism programs.'
53.3.4 Issue: regulations
The success of agri-tourism development in BC will depend heavily
on government agencies guiding the direction of farm tourism. Strategic
ailiances with difFerent levels of govemment will be needed for several
reasons: first, to provide fami operators with a comprehensive view of the
trends in fam tourism; and second, to integrate farm tourism with other
rural development initiatives so that conflicts can be avoided.
Over the past ten years, the Agricultural Land Commission has
developed policies which allow farm operators to incorporate small
businesses, bed and breakfast establishments and direct marketing
initiatives into their business plans. Just recently the Commission
implemented an Agri-tourist Accommodation Policy, which would allow farm
operators to accommodate an unlimited number of visitors ovemight on
their fam. This policy is intended to allow fam operators to gain additional
income and marketing opportunities for their products. Some fanners may
take advantage of this new policy. However, the results of the survey
showed that in 1995 few farrn operators provided accommodation on their fanns, and the ones that provided this service were less likely to be . financially successful. While there is a definite need for policies and
regulations, it appears that the Agri-tourist Accommodation Policy may not be the policy the farm operators need if they plan on diversifying into tourism.
The survey results also noted that farmers believed that govemment
regulations were the number one problem if they wished to diversify into agri-tourism. Farm operators constantly mentioned that regulations varied from municipality to municipality and from region to region. To overcome this constraint, a 'cornmon voice' must be formed when farm operators are faced with dealing with govemment groups.
Strategies to be taken to deal with the issue of excessive regulations:
Design policies that would reduce bureaucracy and allow farm operators the opportunity to develop their entrepreneurial skills and abilities.
Bring govemment regulators together to develop continuity in the interpretation of the regulations affecting agri-tourism development. '
Altow flexibility in the interpretation of policies. Greater appreciation of specific circumstances should be encouraged.
Co-ordinate and monitor implementation of policies and programs. Develop methods and rnechanisms for monitoring agri-tourism development. This strategy would allow the Agriwltural Commission to be proactive rather than readive when problems arise. 5.4 Summary:
A management strategy which embraces the concept of economies of scope should be undertaken by fann operators. This approach would emphasis maximising opportunities for visitors to spend money at farms . rather than maximising the number of customers visiting farrn.
To overwme several of the constraints to agri-tourism development in BC, strategic alliances wuld be created among agri-tourism businesses, agricultural and tourism associations and government support agencies.
Co-operation is essential for success. Visitors tend to spend very Iittle time at agri-tourism operation. Alliances between business and support organisations would help ensure that tourists have several reasons to visit an area and spend their money. Chapter 6
Conclusion and Recommendations
6.1 Introduction
Many farm operators are no longer able to increase their incomes by
producing more, and often unwanted food. Consequently, they have had to
adjust their business plans in order to find alternative sources of income. As
Figure 2.1 illustrates, the decision to adopt a diversification strategy
depends on both the extemal and interna1 forces that a farm operator faces.
This study looked at the intemal forces that encouraged diversification and
examined the characteristics of the farm operation (land, labour and
capital). It presented a profile of the financially successful (generated gross
revenues of $50,000 or more in 1995) agri-tourism operations in British
Columbia and outlined a number of the differences between the financially
successful agri-tourism farrns and the financially less successful (generated
gross revenues of less than $50,000 in 1995) agri-tourism operations. The
study also outlined and compared the perceived constraints to agri-tourism development in this province.
This final chapter is divided into two sections. The first section outlines the major findings emanating from the research. The second section suggests several areas for further research on this topic. 6.2 Major Findings
A variety of research questions were used to determine what factors
differentiate the successful agri-tourism operations in British Columbia from
the less successful ones. From this information, a profile of a financially -
successful agri-tourism operation was developed. As well, differences
between financially successful agri-tourism businesses and the fifiancially
less successful operations were highlighted. These findings are presented
in tabular form (Table 6.1 ).
Table 6.1. ûetenninants of a successful agri-tourism operation in BC.
FACTORS AFFECTING FINANCIAL PROFILE OF FINANCIALLY SUCCESSFUL SUCCESS OF AGRI-TOURISM AGRI-TOURISM OPERATIONS IN BC OPERATIONS IN BC Number of financially successful 26 agn-tourism operations agri-tourism operations ( 2 $50,000 in 1995) Type of farm Tended to undertake only agri-tourism activities Geographical location Gross revenues tended to be highest in 1 Kootenays Fam business size 1 Tended to have greater total capital investment and operating expenditures Type of activities Tended to have a wide range of on-farm activities, notably retail sales, educational workshops, display gardens and agricultural heritage exhibits Number of acüvities Tended to provide on average 1.3 more adivities Number of toun'sts and revenue Tended to have more tourists 8 higher average penerated daily revenue lÏme visitor spent on fam Visitors tended to spend less than an hour Months of operation Tended to be open for business for more months of the year and-more apt to be open in June Running the business Tended to hire staff and involve family members Number of employees Apt to have 3.4 more employees Number of yeais in operation Tended to be in business longer Marketing promotion More likety to use word of mouth, signs, newspaper advertising, tourism related publications & brochures Partnerships with other businesses Half fom partnerships with other businesses Business Growth More apt to have expenenced business growth in The research findings showed that only a limited number of fans in BC
incorporated tourism into their business plan. Of those fams, very few were
financially successful. However, due to the small sample size, factors
affecting financial success could Vary from fam to fanor location to
location. Regardless of this limitation, the management implications of agri-
tourism development originating from this study could be relevant to al1
agri-tourism operations in BC.
6.2.1 Perceived Constraints to Agti-tourism Development
The top four constraints which support agencies and farm operators
perceive to harnper agri-tourism development in this province is also
presented in tabular forrn (Table 6.2).
Table 6.2 Top four constraints to agri-tourism development
L PERCEIVED CONSTRAINTS OF SUPPORT PERCEIVED CONSTRAINTS OF AGENCIES FARM OPERATORS 1. Limiteâ awareness of how to market product & 1. Excessive govemment regulations service effectively 2. timited awareness of product & service 2. Prohibitive financial costs standards in order to cornmte in marketdace 3. Limited capabilities of fam operators to 3. Lack of time to participate in agri- develop the produds and services needed to tourism businesses. wmpete in the marketplace 4. Limited capabilities of fam infrastructure to 4. Lack of marketing awareness handle agri-tourisrn demands needed to promote products 8 services
These perceived constraints are mismatched. This problem needs to
be rectified before any additional policies are developed. 6.3 Recommendations For Further Research
Tourism supply and demand interact through decision-making
processes which gives rise to patterns of development that have economic,
environmental and social impacts. In this study, only the supply-side was .
examined, but if agri-tourism development is to be truly understood both
sides of the tourism equation must be fully explored. Therefore, further
research should include the following:
6.3.1 Supply
The survey administered to farm operators answered some
questions regarding the supply of agri-tourism development in BC, but
- other areas of research still need to be explored. For example, a cut-off
point of $50,000 gross revenue was used in this study to determine
financial success. If this threshold was lowered to perhaps $1 0,000, would
the same factors affect the financial success of the agri-tourism business?
Is there a group of agri-tourism activities that will generate the greatest
revenue? What is the effect of agri-tourism development on employment?
How does agri-tourism development fit into the broader contexts of the farrn
business?
6.3.2 lncrease in Yield
Visitors to agri-tourism operations on average tend to spend one
hour or less at a farm and spend $12.00 or less. Further research is required to detemine how to keep these visitors for a longer period of time
and spending more money during their fann visit. As well, information
needs to be gathered on what services and products would appeal to these
people.
6.3.3 ln terviewing Financially Successful Farm Operators
The supply of agri-tourism developrnent is impacted by the internal forces of the farm famiIy. Therefore, interviewing those farm operators that operated financially successfully agri-tourism operations could provide useful information on important internal forces. Information could be gathered by asking questions on the farmer's entrepreneurial ability, personal and management skills, financial stability, life cycle stages and motivationslexpectations.
6.3.4 Demand
Relatively little research has been published on the requirements of agri-tourism visitors, or the requirements of those who might also become consumers if they were targeted with a tailor-made product. Data needs to be collected to compile custorner profiles (age, income, family status, length of stay, whether they are repeat visitors, etc.). Information is also needed on what activities these visitors wish to partake in and what type of marketing information they used. 6.3.5 Children
Children are important visitors to agri-tourism operations, since many farm operations give guided tours to schools and youth organisations. It is important for farm operators to have profile data on them. This could be achieved by asking parents andior school teachers about the children's
Iikes and dislikes of the agri-tourism operation or devising a survey that the children could complete.
6.3.6 Thematic Guided Routes
Some businesses in the province have joined forces and developed brochures andfor maps to guide visitors along different tour routes. These guides often include a variety of attractions. Further research is needed to gain an understanding of how these routes impact tourists' visitations and travel patterns.
6.3.7 Policy Development and Monitoring
Many government agri-tourism policies have met with limited success. Further research is needed to determine how agri-tourism policies should be organised and how these policies can be monitored and reviewed to cope with societal change. Aarts, D. 1996 ownerfmanager of Elmindo Farm, personal communication, September.
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This suwy is part of an overall economk and oppormnify anaipis of the Fann-Based Agri-tourism and Valu Added Processing Secior of the provhce. Your company's information wiM be kept stn* con&entiat. tt will b mbined wifh other information received from a vanety of sources to produce an amrate profile of this hdvsa) Thank you for ywr assisrance in completing this sumyY Agri-tourism - combines the natural setting and products of an agriwitural operation with a tounsm experience. I can include any of a bmad range of products or services from 'fruit stands" to 'winery and orchard tours" to 'farn baseci bed and breakfast accommodation" 10 'alpaca bms" to "cattle drives." They al1 represent a combination o agriculture and tourism. Value Added Processing - involves taking the basic cornmodily produced on the farm and processing il into ; value added consumer product The value added produds can range from 'jams and jellies" 10 'suri dried tomatoes to 'Ilarna sweaters.' While Vzlue Added Processing can be carnbined with a tourism experience it is not essential
1. Which of the following applies to your fann business? Operate both an Agri-tounsm and Value Added Educaüon workshops (pruning, dried lower Processing business - please answer al1 questions anangement wwlspinning) Ope& only an Agri-tourisrn business -please Fmgate produce des (fni stands) wnü~ueand do nof answer question 3 D Mer m&ii des (ï-shirts, gifts, crafts) 17 Operate only a Value Added Processing business - AnimaUnabire displays/petting zoosfides please start wiUI question 3 a Do not cumntiy operate an Agri-tourism or Value n Dbpiay gardens (herbs, landscaping) Added Processing business, but am interested in 0 ûther actMties, piease iist starting starting up one in the future - please go to question7 Do not operate and are not interwted in future developrnem of Agri-tourism or Value Added Processing business - please retum the survey in enclosed enveiope 2.3 Please esûW ttie percent of your Ml995Farm Rewnue gcnerated by visitars participating in me 2. About Your Agri-tourism Business fdlowing Agri-tounsm activibles: Percent ol Tabl 2.1 How many years have you been operaling your Agri- Agri-lourism Activity 1995 Rnn Revenue burlsm business? years Farin tours % llyou do no! opetate a Agri-tomsm business go 10 question 3 U-Kck % OnmigM accommodation % 2.2 What type of activitiesiathactions have you developed for mis Agri-tourism business? PIease check al1 tht Purchashg of fam produce % ~PP!Y Retail sales, promssed hm, Guided fam tours dis1T-shiris, etc. % meracüvities, Gst sources: % Sen guided tours O Bed & Breakfast Picnic areas 3. About mur Value Added Pmcessing Butines 4.3 Please esb'mte the average daity revenue mat you genemd in 1995 from agrb~rismand value added. 3.1 How many years have you been opefating a Value Added Processing business. YeW If you do not operate a Value Added Processrilg 4.4 How much tirne does your typicai custorner spend busimss please go to question 4. visiting your business? Less than 1 hour 32 for each of your vdue added produclas please indicaie 0 1-3 hours the number of years that you have been producing mis O 4-8 houn . pmduct and estimate the pereentage of total 1995 farm revenues that mis pmduct genented? Onmight How many nights?
4.1 Please estirnate the arigin of your clients in 1995: % Local residents % VisitPrs Q the area 100%
5. About Marketing Yout Agri-tourirrn Business and Value Mded Prado& 3.3 Please indicate îhe distriiub'on channels mat you use and ttie percenfage of your total 1995 5.1 What MngactMties did yw use to promo?e your produclion inventory by distribution channel for your Agfi-tourisrn or Value Added business in 1995? (Check value added produc&. (4) Uie appp&te &mes). % of Total hlof Participation J if Use Chanml Production A Not At MarltEting Ptognm Lot Some Al1 % Mail order/Direct mai Word of Mouth O % Direct Mail carnpaign ISi O Relail outlets n n % Brochures 17 0 CI Famers markets % SIgnage n . O ~xponmarms % Agricufbral nlated CI Whoiesaie pubIications ûther, please 851 Tourism nlated publicdjons cl O Consumer and ûade show 0 0 O t%hibils Newspaper advertlsing a a ûther, specify: O 4. Yow Agri-touthm and Value Added Customen 0 O Cli a n 4.1 Please indicate your dates of operation in 1995.
5.2 Pltue circle Ihe top üuee actMb'es b the loveGst mat 4.2 Please estimate the average number of clitnîs that you have been most useful b you in markeb'ng your served pet day in 1995. clients business and products. 5.3 Do you work wim oUier businesses to pmmOte ywr 6.3 In 1995 how rmny yeu round, seasonai uid parttirne ~qri-burismor Valut Addad Roeesshg produets? people did you amplay for (not ineluding ywrscti): 0 Yes. pleasc specity who 81ey are:
6. Abonî me Economit Benefits of Agri-lourism and Value Addtd Processing
6.1 WM CapM @endiâtres IR6and toW to rklc) am 6.4 Pieas estima& yourtoîai 1995 Gmss Revenues or associated wim ywr Agfi-dwrlsm or Vaha Added mfmte a mge of gros revenues ganerakd by your Proasskig business? businus forme folbmng wimponenrr: am ~oblam Wb 1995 - @ui#ngt.-. waShmm6- S s Pmessiqhcaakruid Es- s t Enhminmcnt(ePuiprrant mik,r#ts.pctlingw s s
OmCrpUEitpcndibins f s
62 Whri operding expendiims wen associt$d WMI )iwr Afitwrism or Value Addad Procassing business in l9%? 1995 m- 6.5 Did your business gmw in 19% and if yas by how much? Wages & salaries for staff invo(ved wim Airi-tPuiism s O Yes, by how much mr 1994 % Wages & Sahies for staff imoked in Vaiue Added Pm?SsiIIp $ O No
6.6 Who spends tha matllme ninning your mntAgd- bwrism Md Vaiui Added business? Marketing ~endbns S O you Ki ywrspouse yoursiihp Total Expendiiures S Il empîoyees El pmer 7. Fulure GmwVi of Agri-tourhm and Value Addcd 7.4 Are there any comnts or concems that are prevenüng Processinu you from mgandhg or developing your Agrl-tourism business orVafue Added Processing (Le., financial, Please use a separare piéce of paper if you do not have gvemment regulatins, fra!n»ig, mamiing) ? enough space io answer Vie quest~onsbelow. PIease describe and be as specific as possible. 7.1 Please indicate the importance of each of the following reasons in your decision to become invohred wim Agri- tourism or Value Added Processing?
A chance to incnase my farm incorne D O A chance to cnak mon farm ernploymem for my cl O fami A chance to educate people about fam in O O O British Columbia 7.5 Please provide any possible solutions that you have ta 7.2 Are you planning to expand your business? addnssing these consûaints. C] no plans for expansion - please go to îhe next question C] yes, please descnie your proposed expansion plans
What is the estimated cost for this expansion?
How do you propose to fund this exgansion? 7.6 Please provide any iuriher comments.
7.3 Do you anticipate a growth in your Agri-tourism or Value Added Processing business in 1W6?
Yes. Please estima % growth % Will stay the same as 1995 O Anb'cipate a decrease, My? Thank you! Please retum your cornpleted suwey in the enctosed tehini envelope or fax ta: (604) 222-4676 Agri-tounsm and Value-added Processing Sumey - 1996
Introduction The Ministry of Srnail Business, Tourism and Culture is conducting a study of Farm- Based Agri-tourism and Value-added pmcessing in the British Columbia. We would like you to answer a few questions regarding your opinions conceming these types of on-fann businesses. Your individual answers will be kept strictly confidential but they will be combined with the responses of many more people participating in this survey. In combination with others, your responses will provide insights into the opportunities and strategies needed to strengthen the agri-tourism and value-added processing businesses of British CoIumbia. Based on other surveys we have conducted, this intewiew with you should take about 12 minutes to complete. Before we begin, we would like to ciarify what we mean by the terms Fann-based Agri-touxism and Value-added pmcessing: Agri-tuurism combines the natural setting and products of agricultural operations with a tourism experience. It includes pmviding tourists with opportunities to experience a broad spectnim of products and services ranging fromfiuit stands to winey and orchurd tours, to farm based bed and breakfast accommodation, to alpaca farm tours and attle drives. While only examples, these products and services al1 include a combination of agriculture and tourisrn components. Vdue-added processing involves taking basic farm commodities and proceçsing them into value-added consumer products. This indudes a wide range of on-farm ptoducts ranging from jams and jellies to llam sweaters. mile value-added pmessing cmbe combined with providing a tourisrn experience, it is not an essential component
About Your Organization What is the complete name of your organization?
What is the main hmction (s) of your organization?
- -- . - -- 1s your organiza tion currently involved wi th agri-tourism or on-farm value-added processing? a) Agri-tourism Y=( ) No( 1 b) Value-added Processing Yes( ) No( )
If no, tlrank respo~identfor tlieir time and close srrrvey. 2.0 Your Organization's lnvolvement With A@-Tourism And ValueaddedProces~ing~ If your organization is engaged in agri-tohm or on-fan value-added pmcessing related activities, we would like to know more about ia initiatives in this regard: . 21 Please describe the types of activities or programs with which your organiration ic involved: a) Pmduct development support? (Please describe) Agri-tourism:
Value-ad ded processing:
b) Marketing support? (P1ease debe) Agi-tourism:
Value-added processing:
c) Training Support? (Please desaibe) Agri-tourism:
Value-added procesçing:
d) Financial Support? (Please ddbe) A@-tourism:
Value-added processing:
e) Technical Support (e.g. business counselihg, newsletters, statistis gathering, etc.) Please desaibe). Agri-tourism: 22 What is the approximate budget that your organization allocated to these sectors in 1995? A@-tourism: Value-added Processing. What is the approxhate budget that your organization allocated to these sectors in 1996? Agi-tourisrn? Value-added Processing: How does your organization's probable 1997 budget for these sectors compare with that provided in 1996?
Mon Abait Ru Erne b U-in a) Agi-tourism: ( 1 ( 1 ( 1 ( ) b) Value-added Pmcessing: ( 1 ( 1 ( 1 ( 1 Do you anticipate pwthin business opportunities in these sectors over the next 5 years?
Ys No U-in a) A@-tourism: ( 1 ( 1 ( 1 b) Value-added Processing: ( 1 (1 ( 1 Your Opinions Concerning Challenges and Opportunities For B6tish Columbia's Agri-tourism And /Or On-Farm Vaiued Added Processirtg Industries. Badon your knowledge of the agri-tourism and on-farm value-added proceskg industries in British Columbia, please indicate. What are the best oppominities for growbi within these sectors in British Columbia? a) Agri-tourism:
------. - b) Value-added Processing :
------What are the biggest constraints to growth for these secton in British Columbia? a) Agri-tourism: 3.3 Now based on your knowledge, please indicate the extent to which the following factors are constraining opportunities for the effective development of a@-tourisrr and/or on-farm value added processing in British Columbia:
Not hmewhat A lot Don'i a) Limited awareness of the pmduct and service standards needed to compete in the marketplace. ( 1 ( 1 0 0 b) Limited on-farm capability to develop the products and services needed to compete
in the marketplace. ( 1 ( 1 . 0 c) Limited awareness of how to market produ- and services effectively. ( 1 ( 1 0 0 d) Limited awareness of the types of partnerships needed to develop and promote products and services in a coordinated fashion. (1 ( 1 0 0 e) Limited awareness of how to develop the types of partnerships needed to promote products and services in a coordinated fashion. ( 1 ( 0 0 f) Limited awareness of effective practices needed to provide quality seMce to on-farm cus tomers/visitors. ( (j O O g) Limited awareness of new trends in agri-tourism and/or value-added processirtg business practices. ( 1 ( 1 0 0 h) Limited financial support for on-farm a@-tourism and/or vdue-added pmcessing developments. ( 1 ( 1 0 (1 i) Limited liability hsurance access for a@-tourism and /or value-added processing related business activities. ( ( 1 (-1 (1 j) Limited awareness of existing and emerging products and services of interes t to on-farm customers /visitors. ( ( 1 0 0 k) Limited awareness of the potential opportunities and costs associated with developing agri-tourism and /or O ther value added processirtg businesses. ( ) ( 1 0 0 Not Abc Dorr-t 1) Concem that visitor attitudes concerning many farm practices might conflict with those of farmea. ( 1 O O m) Concem that on-farm visitor behaviours might conflict with cumt fanner lifestyles. ( ) O O n) Concem that additional a@-tourism and/or value-added procesing bkiness might overburden the workload of farm women. O) Concem that a@-tourism and value-added businesses might overburden the workload of farm children. p) Concem that a@-tourism and value-added businesses might conflict wi th farmer
workloads during the busiest periods * of the year. Concem that agri-tourism and value-added processing might cawenvironmental damage hmvisitors /customers. Concem that govemment development regdations and operating requirements will make agri-tourism and /or value-added businesses impracticai. . Limited capabdi+ of farm infrastructure (e.g. roads, parking areas, sewage arid water services) to handle the visitor/customer traffic generated. Concern that agri-touriçm and value-added pfocessing might conDict with other operations and production practices. Concem that a@-tourisrn and value-added processing might mate conflit% with neighbouring farrns not involved in such activities. Concem that visitors to agri-tourism and value-added processing opera tions might bring diseases to the fam. 3.4 Do you have any further comments conceming the pwth, development and management of British Columbia's agri-tourism or value-added processing industries?
TM-you@ your coopautim Mth th& su- Should you be interestcd in receiving a copy of tkfid rrport, or wish to mkfurthcr cornmmts on any of the points discussed in the SUT, please confucf: Appendix Agri-tourism and Valueadded Issue Workshop Summaries Govemment Regulations
Solutions:
0 need to bring government regdators together to develop continuity in interpretation of the reguiations affecting farm business (e-g. regional districts, municipalities, Agricuiturai Land Commission etc) need to address effii of regdations interpretations on fînaacing capabilities due to uncertainty need to work with BC Assessrnent Authority and Agricultd Land Commission on ddoping an appropriate interpretation of wbat is an acceptable fann product need for simplifiecl manual of regulationsclaws that can be used across the province on a consistent basis r need for a lobbying organization to lead actions on developing regulations more suited to fann operations (e.g. Direct FmMarketing Association) nced to gd somc consisttracy in interpretation of regulations by Regional districts and Municiplitics in the contcxt of firm operaiions nced for worlishops for fanncn which show how to apply Worlaaan's Compensation Board regdations dcvelop kttct communication with fhmm through round tablcs with govcramcnt. . agridûuc, bealth dqmmcnts etc. (Hoid tbcst round tables at Direct Fatm Markaing Aswmation mœtings) ust Direct Farm Marketing Amchtion as an umbrclla organization to lobby with gûvcl~mtllt 0-ti0iu foi m0rC aod Uddh@hli0n~ necd to focus aücntion on oôtaining a more appropriate inttrprrtation of '5val~adcîaf'praducts fmm BC Asstssmcat Authority pctsptctive need more uniform tax asesmat gui&b use a single orgaabmion such as Direct Fmmarketing hochtion or Fruit GmrsAssociation to bt advaaey voie for ail farmcrs in crtating more rralistic intcrprrtations of rcguiations a devclop association workshops to addrrss fbtm mnœms with intcrprrtation of regulatioas r provide feedback to govvnmcat on thc cumulative impact of regulations on hmopcrations a dcvelop a xuaoual d rrgulatiws and arhrisDry contacts that is designal to guide farmers (eg.perhaps pravide an on-lk diresbry that couid k casily updatcd )
Issue: Uabilify Management
Solutions: Issue: Pmduct Qualify:
Solutions:
WorkrAiop: &nt&stM - 1 hloppcakr awaftncss ofqriality proQd rquhamts through petworlring 1 diswsiolls at othu datai conftrtll~~~Iuch as isDDUoet FmiiMaikering Asdation seeL amsumer infdniiptjon at Fm'sMarkets conduct Cmrdinatcd on-sitc wnsumcr nirvys O conduct silent shoppr sumys 1Eann sites encoumgc the Dirra FmMakahg hadaion ta dmlop "QO~C" qualily srandvds assoaattd wirh agrred upon factors p&& ansumers with mgnizul f amditcd labels (e.g pubaps relatai to risk managernuit, pst managernuit a.1 a use Fanner's markas for produa tMing with coasumers 0 amduct Wsample testing progmms to &termine customcr opinions on products, pricing etc.
Issue: Partnemhips a Limitai awarcness ofpotentiai of valu of partncnhlps witbin spdïc types of agriculturai indusKies (cg. pi& pur own busiaesses); limited awarcatss of potentiai valut of partutrships bdween relatcd but dinityp of indiistncs (e-g pick your own ùwkscs and tourisn indwüy acconuwdaiion supplias ); Limited awarcncss of potentiai valut bctwcen non-dmih and anin& unrelarai businescs (e-g pick your awn busineses and apipmnt supplias).
Solutians:
necd to HopTour Gui& CPlcndars for disvibution to ~ircornpunies fbr their planning purposes ncsd to develop same rrpndnrdc of rumgnidqualiry to makc parwtsbip ktwaen likc-mirulai s~opiiersjmsii'ble ncedto~gniztkoentsof~gaipingto~tocrcatecritical~mossof~~offarmiDg opcrations and compece ari.rcamiiht with aZher tauiom busincses need to crcate linkagcs with tour opentors, ad Chamb«s of-~mmetct ncadto creaic~~~toestabiishappmp~pricingstntcgi~~ med ta cririte partacrships through Direct Fann Mark~ingAssoaation datai to &vcloping cornmon image and product QCdliility aecd to work with otber agriculnval and community mntslfestivals to pmmotc fann Msits aeed ta work Buy BC to promote products w-op: cm-3 devciop ii&agcs with OtbCf agrïcuiûuai in san~region e@aiiy for tOUfS (e.g bikcs) dcvelop with sdmis, a!~~Mons,community groupd for public relations purposes
Solutions:
Workkop: NoiUoAoo - 1
Issue: Tmining
Solutions: WorArlCop: hg@ - Z look a ways of hiring attitude look at ways with working with pbopIc form local cornmunitics (c-g. schoois) dcvtlop a rccnriting biring woxks-0 for a~loyccsthrough Diract Farm mrkchg Association dtvtlop a gmup of Superhost üaining programs iu conjunction with kxiafion mgg confinas.
Issue: Obtaining Financial Support
limitcd awanncss of how to approach hanciai institutions problmis of obtaining acctssary uequity" poBtion to acquirc fllading iimited institutional awanoess of agritaurism and valUt-Bdddd pmccsing perceiveci "intimidation factor"
Appendix 5
Open-Ended Comments by Fatm Operators
on the Constraints to Agri- tourisrn and
Value-Added Development Coastraints Or Concerns Prwenting You Fmm Expanding Or Developing Yaur Agri-Tourism Business Or Vdur Added Processing. JOoerate bath ad-tourim lad value-added business\
= We would like to ucpand our store and office space but may not be aüowed a larger mai1 space due to governn andor municipal regulations. = Government regulations stand in our way as you have to be processed through too many government and muni agency (Le. selling jams, jellies and honey hassled by health deparcment). = Govenunent reguiations. Getting near retirement. = Financial - starmp costs & labor costs extremely high (Le. equipment for fiaying) and agricultural labor not re; available. Lack of cheap railway uansportation to nearest large market. Financing - that's the biggest barrier. = Size of property, goverment regulations, lack of cheap money. Tirne constraints. Lack of hancial cornmitment. Lack of marketing expertise. Difficuit to get straight answen hmpublic servants. Heairh regdations have been a pain in the butt( i.e. they wanted di accesscs scmed). Building regdations almost preclude a low overiiead seaçonal business. Any larger operation aeeds very expensive equipment/not justised for a seasonal production. = The prescnt resuainrs by the ALR are unrealistic within current economic parameten (i.e. 1. size of facilities. marketing outside producc. 3. use of land for processing faciiitics- 4. use of land for parking). => Our age v/s labor. Financiai boobyuap. Government dissimufatio~Residentiai enmchment The emnom] dapsing. Increasing crime. Weather. = Govemment regdations espdyLDB restrainç revenues. Regional disuid restrains land use. => Financial - hay geaing barder to get due to Ginseng planring. = Highway sign poIicy. = Govemment fees the same for small operation as some 100 times Iargcr. Very expensive equipment. Start-up ûver nguiated indus?ryustryHealth beneficiai product but charged as substance abuse product. = Finances + tirne management. = Financing is biggest problem due to lack of apparent knowIedge by banking industry. Raw materials are in sh supply 50 lag phase wiil be 3-5 years for full potential to be achid = Age. = Money to invest in fhnequipment and staff. Government regdations - tw much interference in private enterprises. No constructive help. Just prevtntativ desand regulations. = Gaverament reguiations regarding the ALR = Not enough U-pick s?mwûcrries. = Govemment regdafion - idiotic rd tape hmDepartment of Highways My age, and my location is remote without communications. Expansion quim more work hmmyself. more expenses to hin help & their refated costs for the total effor Would have to take an indeph look at the end remit if we were to expand - figure 1make about S3hour for e expended now! = Timc. = Time and financial. a Gonmment reguiations - ~tgionaldistrict zoning and constrictions OU ALR lands. a Financial. Govemment reguiations - fedcral reguiations regarding sales in (at) farmus markets. Financial - direct dt the above requires us to use a commercial processor. Additional cost for living on Vancouver Island. = Govenunent reguiations. Health regulations pertaining to hamihg of product (mcat products). Government reguiations pertainuig to land use, building development, mgnage, permit5 and iic~lses. Constraints Or Concem Preventing You From Expanding Or Devdopiag Your AgrXourisrn Business Or Valut Added Processing. JOnerate both ami-tourism and value-added business1 (continue@
a Funding. Time (bath of us work). Financiai - expendinires for upgrading & expanding faciliris & special crops must always be made More m comes in. Signage - local government is quite restrictin on allowing signs. Health regulation - not clear, poli cliffer between regions & inspecton. = Need for an agricuihiral employmcnt service. Highways has not corne through as promised with proper road signage - no word for 6 months. Some visiiility hmthe Marketing Branch in this area by way of an occasion visit. a Anached sheet + rhere's aiso difncuity with signage dong highways. 3 Government regdations labor laws. a Export is made almost impossible due to gwernment regulations. Funding the very expensive extemal proces! dways poses financial strains. There is not enough thefor marketing. a Financial consuaints. Soft markets. = 1 can oniy cram 18,hours in a &y - have to sieep once in a while. Self fun& are tapped out - cash flow will have to fund any capitatizatioa = Shomge of capital & lack of desire to be in debt due to risks. = Marketing our product is a rdconsrraint for ris as neither my spouse nor 1 are bledgcabie in this fieid. W have been interesteci in pursuing a B&BI~idea & some detached buildings on our farm but municipal laws prohibit this hmhappening. * Population base only so big to draw from We have blueber~iesand would Ueto have a winery but we are having a difndty in meeting mgreplat which are made for &rapts. We are the ones who iotablueberry winery. = Govcmment regulations are conshaining - tw much red tape. Time consuming. Regulations in land use cumbersome - not specinc enough for agriculture (same as rcsidential land use). = Municipality doesn't want expansion They want srnail business. = Financial. Regulations - dean manufacnuing area (takes S and tirne to meet regulations). a Marketing. Financial. = Ficial. = Regdations - ALCMunicipai. Cornpetition. Marketing. a ALR. Government. Health ngulations. a Available artified organic land for growing product. = Manpower - getting reliable trainable staff. FinanciaVgoyernment regdations - do 1 spend the money (1 don? have) to put in equipment to satisfy govemment regdations for a Value-added product? a Ficial - business is growing but bccause we pay off our expansion projects every yeat, our net income is O. Gwernment regdations make things expenSm. = Financial! ! Municipal regulation. Marketing. Famiiy constraints (Myfarni). 3 Marketing - contact for wool sales and more training to recogn.the quality of the pduct Signas is a pmt Constraints Or Concerns Preventing You From Expanding Or Developing Your A*-ToutLlrn Business Or Valr Added Processin& JO~eratean aeri-tourim business onlvl
Shortage of capital. = We would like to include milk and dairy productç but are prohibiteci in doing so by present dairy regulations prohibiting the direct sale of milk hmfanns. => This enterprise grows because we have a farm aunosphere mixed with the selhg of pumpkins during Octobei Being an every-day type fmfamily appeals to many urban dwellers. Right now, 75% of our income is to other stands and to -p. My decision is shouid 1 conœnuate 100% on produce stand and grow smaller acreages of a greater variety of produce. Or just leave it status quo but incm 10% wery year on produce stand. a Moçtly 6nanciai - this bas been one of the wom years for sales and bench niniç due to the rain in Aprii and h a One financial constraint - a minivan would enable us to reach more momers; tcansporfation can be a proble. bth in dollar tenns, and the aeed to teserve early, during peak tourkt season Farm site washroom needed. s Coa of liability insurana - approximately 10% of gros revenues. = Ficial, marketing. 3 Would likc to put up temporary signs when 1 have products for sale. a The regional districts regulations on fann lands. Government regulations (Le. mning to expand buildings, etc.). Ficial (i.e. ranch can't dy&ord to hel] expansion that is rcquired). Signage not aiiowed dong public roads. Too many farmea uying to do the same (farm gatc des) looking fo quick dollar not quality or cornmitment. Limited fùnds for washrooms, etc. a Variations in crop production cause fluctuations in revenue. a Government reaations + need for amslarge enough to park numbers of vehicles on a malacreage fann = Road signage. = Wine sales are very strictly regulated. No new wine stores are aiiowed, and existing ones often have agreeme with other wineries. Grocery stores can't scli wine. Exporiing (even into Alberta) is difncult. = Agriculturai Land Reserve. = Too busy in nunmer may lead to burn out Dealing with the cornplex issue of hiring & training employees & having them make money for my operation =s Not enough money or tirne. * Land king taken out of ALR Subdivision expansion. =, It's a lot of work for one person (me) so with time, my staff are 1-g the rope~,then 1 can apply myscLf to I projects. e. Yes. Lack of govenunent support for srna11 (home-based) business (e.g. BC Hydro mis to change my elm rates to "cornmerciai" & BC Açscssnent Authority is ûying to change my entire operation to "industrial", etc, 3 Personai time. Better government marketinglpromotiog getting "the word out" - mcaning telling the world about ow amai positive agritourist interestsfproducts. s Age. water. Financiai, conam wer logging praccices, ma of gwemment services, native conarns. = Havhg to pay a mortgage and work 2 other jobs. Le. TIME. a Sign bylaw - viUage of Pembcnon prevents traditional signâgc; marketing-spreading the word, must impmve. a Lack of water for irrigation. La& of usable/tiiiable mil. Financiai. * Raidentid encroachment on fhrm land Time - no timc to do it properly. Constrainh Or Conccriu Prcventing You Fmm Espanding Or Developing Your Agri-Tourism Busineu Or Vdi Addcd Proecuing. JOwrate an ami-tourism business onlvl Icontinued)
= priœ. 3 My age. a We had planneci on expanding but WCB & üï papenvork changui it. = ALC restrictions on farm dwcllings. It is impassible to farm organically without lots of labor. We aii nced th possibiiity of worker's accommodations made more available. Islands TnistlALC inability to pmperly communicate & daide! Some years ago our area was a good place to do some small farmLng, but new ma& & cheaper bauling rates f southern produce. which is 3 to 4 weeks ahead of ours, tends to decrease the value of our local produa. a Ficial because it cos& too much to borrow on a very seasonal business & as of yet we haven't made enougl cxpand Goverurnent reguiations. oquiprnent, training, hanciai. Municipal road signage restrictions, zoning restrictions, Financial iimitations. = Price of fannland in Kelowna very high (deterrent in buying large sections of iand). Market demanci - can't expaud or eise will saturate market. The- having enough time to do ihe best job 1can in our business AND having enough time to spend with fa and fiiends. s Ficial. ALR requirements. Health reguiations (septic Limitations). We're in the very early first stages so have not had any of the above at this time. Problem is where do 1 start 1 ail the ideas. 3 Personal organization TEST TARGET (QA-3)
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