Increasing Farm Profitability through Agritourism Product Development and Marketing

Final Report for LNE08-267

Project Type: Research and Education
Funds awarded in 2008: $89,563.00
Projected End Date: 12/31/2011
Region: Northeast
State: Vermont
Project Leader:
Dr. Lisa Chase
University of Vermont Ext
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Project Information

Summary:

To support farmers diversifying into agritourism, 19 workshops were held in 10 different states in the Northeast region (ME, MD, DE, VT, NH, NY, MA, CT, WV, RI) between January 2009 and March 2010. The total number of workshop participants was 763, including farmers, service providers and other attendees. The workshops were followed by technical assistance for farmers. A follow-up survey was conducted a year after the workshops with 98 farmers responding. Results indicated that 76 farms had assessed their business, implemented improvements, and/or worked on a business plan. Examples of agritourism ventures included involvement in local schools, social media marketing, maple tours for the off-season, pairing and tasting events, and educational nature trails. To assess contributions to farm viability, we measured increases in profitability as well as increases in quality of life based on an index of seven indicators. In total, 72 farmers reported improved farm viability as a result of changes made based on workshops and technical assistance, with 38 reporting both increased profitability and quality of life indicators, 21 reporting increased profitability, and 13 reporting increases in quality of life indicators.

Introduction:

Many small and medium-sized farms throughout the Northeast are struggling to keep their land in farming and their families employed on their farms, while sustainably managing resources for the long-term. Suburban sprawl and second home development have led to rapid increases in land values and property taxes, threatening working farms and available farmland. At the same time, tourism and culinary industries are expanding, providing opportunities for farms interested in diversifying and marketing their products, heritage, and landscapes directly to consumers. In many Northeast states, tourism is the first or second revenue-generating source and agricultural operations are in the top ten. The economic impacts of blending tourism and agriculture have significant potential.

Agritourism refers to enterprises and activities that are conducted on farm sites for the education, recreation and enrichment of visitors. Agritourism can take many forms including retail sales, hay rides, corn mazes, pick-your-own operations, and use of woodlands on farms for hunting, hiking, horseback riding, and other activities. There may be educational components including programs for schoolchildren and elderhostel tours, as well as exhibits and demonstrations tailored to specific visitor groups. Farms may combine retail sales and tours with accommodations such as bed and breakfasts and farm-stays. In essence, agritourism is providing educational and authentic agricultural experiences that enhance direct marketing of farm products and improve public support for agriculture.

One of the fastest growing segments of agricultural direct marketing, agritourism allows farmers to diversify their core operations and keep farmland in production while preserving scenic vistas and maintaining farming traditions. By providing authentic farm experiences for visitors, agritourism helps educate the public about the importance of agriculture to a community’s economic base, quality of life, history, and culture. Agritourism is growing rapidly in the Northeast region, however the industry remains underdeveloped in many states, lacking technical assistance support, infrastructure, and networking opportunities to ensure best practices. Through collaboration among service providers and farmers in the Northeast region, this project addressed those needs.

Performance Target:

“By the end of the two year project, at least 70 farmers in the Northeast will have adopted new agritourism practices that contribute to farm viability.”

Defining farm viability as increased profitability and/or increased quality of life, 72 farmers reported improved farm viability as a result of changes made based on the information, resources and contacts provided at workshops and through technical assistance, with 38 reporting both increased profitability and quality of life indicators, 21 reporting increased profitability, and 13 reporting increases in quality of life indicators.

Cooperators

Click linked name(s) to expand
  • Ben Amsden
  • Marc Edwards
  • Beth Kennett
  • Diane Kuehn
  • Cindy Martel
  • Ginger Myers
  • Stu Nunnery

Research

Materials and methods:

This project provided tools that helped farmers (1) determine whether an agritourism enterprise fits with a farm’s core business and at what cost; (2) prepare business and marketing plans; (3) assess and manage the risk of farm visitors; (4) comply with local, state and federal regulations; (5) leverage promotional activities of tourism and other agencies and organizations; (6) develop and deliver effective media tools; and (7) make use of technical assistance opportunities. To accomplish these objectives, collaborators from several states in the Northeast developed a curriculum of core business skills training modules and delivered these modules through agritourism workshops and follow-up assistance. Standardized surveys at workshops and one year later formed the basis for outcome measurement.

Research results and discussion:

1. One farmer and one service provider from each of the participating locations in the Northeast region (Maine, Maryland/Delaware, New Hampshire, New York, Rhode Island/Massachusetts/Connecticut, Vermont and West Virginia) committed to coordinate involvement in the project for their respective states. To facilitate communication throughout the two year project, we had monthly conference calls and occasional in-person meetings supplemented with email updates for those who couldn’t make the calls/meetings.

2. Collaborating farmers and service providers have developed a curriculum of core business skills training modules, state-specific modules, and evaluation tools. These have been adapted for use in different locations. Visit http://www.uvm.edu/tourismresearch/agritourism/?Page=northeast.html to see outreach publications and resources that contribute to the modules.

3. Workshops for farmers interested in agritourism took place between January 2009 and March 2010. The time period that the workshops took place was extended to accommodate different planning schedules for state coordinators. Most states had multiple workshops in different locations around the state in an effort to reach more farmers. In total, nineteen workshops were held in ten different states in the Northeast region (ME, MD, DE, VT, NH, NY, MA, CT, WV, RI). The total number of workshop participants was 763, including farmers, service providers and other attendees. We implemented the benchmark survey through a questionnaire handed out at the end of each workshop; however questionnaires were not collected from all workshops. We received 143 completed questionnaires from farmers, which is significantly lower than expected and posed challenges when following up with farmers who attended workshops. For future projects, we need better oversight of the evaluations at the workshop throughout the region to ensure a higher response rate.

4. One-on-one technical assistance to support farms planning new ventures was available after the workshops. A follow-up survey about 12 months after the workshops were held was conducted online to find out about changes made on the farms and resulting impacts on profitability and quality of life. Internet notifications were sent out in January 2010 to workshop participants that had completed the first survey. Five follow-up reminders were e-mailed every two weeks after the initial mailing. The low response rate from the first survey made it difficult to contact farmers for the follow-up survey. We received 71 responses and needed to increase our response rate. With spring, summer and fall being a busy time for farmers, we requested and received a no-cost extension through March 30, 2011. This extension gave us a chance to contact farmers during the slower winter months. During that time, we were able to contact 27 more farmers via phone and internet. In total we had, 98 respondents to the second survey. Of those, 76 reported that they had assessed their business, implemented improvements, and/or created or changed a business plan.

Participation Summary

Education

Educational approach:

To share project materials with farmers and service providers, we created a webpage at
http://www.uvm.edu/tourismresearch/agritourism/?Page=northeast.html with outreach publications from the project including, “Agritourism Enterprise Self-assessment: Are you ready to host visitors at your farm?” and “Getting Started in Agritourism.” Additional links to other publications and resources are provided on the webpage along with contact information for collaborators.

To share findings from the evaluation process with others involved in measuring outcomes, we have submitted a journal article about measuring quality of life to the Journal of Extension, and we gave a presentation on the same topic at the National Association of Community Development Professionals and National Extension Tourism Conference held March 7-11, 2011 in South Carolina.

Other publications from the project include “Tools for Managing Risk in Farm and Forest Tourism” published in Tree Farmer in January/February 2011 and “Planning for Farm Visitors” published in Agriview in January 2010. In addition, we presented on “Agritourism and the Local Food System: Are They Related?” at the Northeast Regional Center for Rural Development Local Food Conference in Kerhonkson, NY in 2009.

To develop a strategy to continue to support agritourism throughout the Northeast region, we will present lessons learned from our project and facilitate a roundtable discussion on “Agritourism in the Northeast” at the Northeast Regional Center for Rural Development’s Conference on What Works! The Future of Entrepreneurship & Community Development in the Northeast to be held September 18-20 in Philadelphia.

Additional Project Outcomes

Project outcomes:

Impacts of Results/Outcomes

Based on evaluations immediately following the workshops completed by 143 farmers, 97 percent of participants reported increased knowledge of income-generating opportunities for agritourism businesses and 90 percent reported that the workshop had given them the knowledge needed to implement these opportunities in their own agritourism business. Over 90 percent of workshop participants reported that they planned to thoroughly assess their business to determine where improvements or new ventures are needed during the next year, and 84 percent reported that they intended to implement improvements or new ventures based on information provided in the workshop.

We conducted an internet survey one year after the workshops and heard from 98 farmers, after extending the survey time frame and telephoning or visiting farmers who did not respond to internet survey. Results indicated that 76 farmers had assessed their business, implemented improvements, created a new businesses plan, or changed an existing business plan.

Examples of agritourism ventures include farm stays, involvement in local schools, social media marketing, hosting fundraising events for non-profits, online newsletters to keep customers up-to-date on farm activities and varieties at their peak, educational nature trails, maple tours for the off-season, farm education retreats, pairing and tasting events, monthly dinners on the farm with a local chef, educational programs for children, and farm infrastructure improvements including roads, buildings, parking lots, farm stores and restrooms.

Because diversifying to include agritourism may not necessarily improve farm viability over the long-term, we examined farm viability by measuring increased profitability and increased quality of life. To assess changes in quality of life, the survey included a series of questions about “changes in personal time” and “changes in personal satisfaction.” Changes in personal time included the variables of “changes in the amount of time I spend with my family (during both work and freetime)” and “changes in the amount of free time I have.” The factor mean was -0.08, a neutral value that indicates that the average respondent had neither increases nor decreases in their amount of family time or free time. “Changes in personal satisfaction” included the variables “changes in the amount of personal satisfaction I receive from my business,” “changes in my enjoyment in sharing farm life and/or heritage with visitors,” “changes in my satisfaction with preserving the agricultural landscapes of my farm,” “changes in the wages I receive from my business,” and “changes in my enjoyment with meeting new people through my business.” The factor mean was 0.64, a positive value that indicates that the average respondent had an increase in the personal satisfaction they received from their business. Overall, 51 farmers reported increases in quality of life indicators as a result of changes made to their farm business based on the workshops and technical assistance.

Defining farm viability as increases in profitability and/or quality of life, we found that 72 farmers reported improved farm viability as a result of changes made based on workshops and/or technical assistance, with 38 reporting both increased profitability and quality of life indicators, 21 reporting increased profitability and 13 reporting increases in quality of life indicators.

An additional outcome of the project is that collaborators have strengthened their relationships and shared best practices and barriers related to agritourism throughout the Northeast region. As a direct result of the SARE project, collaborators in NH and VT received three grants from the Northeast Center for Risk Management Education to support risk management related to agritourism. Positive exposure from this project helped collaborators in NH secure grants from Plymouth State University and the New Hampshire Charitable Foundation to continue agritourism research in the Northern Forest region. Collaborators in MD received a grant from the USDA Ag Marketing Service’s Farmers Market Promotional Programs to connect farmers and the hospitality industry on MD’s eastern shore. Collaborators in RI received a USDA Rural Business Enterprise Grant to support agritourism/hospitality in RI in collaboration with Johnson and Wales Small Business Development Center. Collaborators in VT received a grant from the SRDC National e-Commerce Extension Initiative Grants Program to focus on e-Commerce educational resources for agritourism, and VT is a co-investigator on a proposal to NESARE led by NJ to further develop agritourism support in the Northeast.

Economic Analysis

Profitability is a critical component of farm viability, and we measured respondents’ perceptions of changes in profitability as a direct result of participating in agritourism workshops and receiving technical assistance after the workshops. We found that 59 farms reported positive impacts on profitability. Note that this does not mean profits increased for 59 farms during the time period of the project. As we were planning for our first workshops, the economy crashed and has been slowly recovering ever since. To attempt to isolate the impacts of the workshops and technical assistance on farm profitability, we developed a survey question that asks about the impacts on profitability during the past year from four different factors: the economy, the weather, information received through past agritourism workshops and technical assistance, and changes in family life. While 67 percent of respondents felt that their profitability improved as a result of agritourism workshops and technical assistance, 59 percent felt that the economy had hurt profitability and 54 percent felt the weather had hurt profitability. Family life was a relatively neutral factor, with 59 percent reporting no impact.

To quantify the impacts of agritourism workshops and technical assistance on profitability, we asked about additional income and expenses that new agritourism ventures generated during the past year, specifically asking respondents to write in dollar amount for additional income, expenses and savings. Twelve farms responded with positive values. Presumably, those who skipped the questions did not want to share information about their income, did not keep track of their income related to new agritourism ventures, or had zero values. Nine farms responded with positive values for additional income. The mean was $3,678, the median was $3,000, the maximum was $13,000 and the minimum was $100. For additional expenses, 11 farms responded. The mean was $3,141, the median was $2,000, the maximum was $10,000 and the minimum was $5. For additional savings, one farm responded with $1000 in savings. These figures are encouraging, considering that changes had been made only one year ago and it frequently takes a few years before returns accrue.

Farmer Adoption

New or improved agritourism enterprises were adopted by 76 farms. Of those, 72 reported improved farm viability, defined as increased profitability and/or quality of life. Below are comments farmers shared with service providers and wrote in evaluations of agritourism workshops and technical assistance. These comments refer to new ventures undertaken as well as improvements made to existing enterprises as a result of workshops and technical assistance:

We were able to implement our business plan and reach our goal of increased profitability. Revenue was more than double our expectations.

We’ve just this past year begun to attract a great group of visitors. We’ve learned a lot about reservations and requiring deposits. We’ve got to find out what it takes to get set-up with a credit card machine. I wouldn’t have gotten into this, had you all not brought it up. Thanks!

Risk management business plan vs lifestyle, I combined the two adjusted business plan to meet my family needs.

We increased our involvement with local schools by offering our farm as the home course for the Sanford High School x-country running team. Because several schools participate in each home meet, many parents of runners were introduced to our farm and returned to pick apples at a later date. We capitalized on the “Farm as Venue” portion of Harvest New England pre-conference on AgTourism, and hosted several of the fundraising events of several non-profits. We also began a weekly, in-season (monthly in the off-season), online newsletter (Constant Contact) to keep our customers up-to-date on farm activities and varieties at their peak each week.

From attending your event I saw that I was on the right track with my Web 2.0 events and continued to expand in that department This impacted positively on our Fall Jamboree, U-Pick Apples, Pumpkins, U-Cut Christmas Trees, corn maze, and hay rides throughout the fall, and our retail store also did well. We were able to cut back our marketing budget and still had a productive season. I do not have the dollar amounts available for additional income/expenses for these opportunities and ideas.

One big thing I finally did was work out a deal with a Chef so that he does prepared foods AND we are doing a monthly dinner with him, demo style, at the actual farm store. It’s $35 a head, not a HUGE money maker but a big BUZZ maker for sure. Every dinner has been sold out so far…and it’s brought in people who WEREN’T even customers!

Interested in selling value-added products made from our own products. Currently selling these products and having them made by someone else as a test to see if there is a demand/market for them.

Better partnering with other local businesses

Information gained in the workshop was used in a community planning group to establish a Farm Museum in our county that will include agritourism opportunities, a farmers market and serve as a business incubator for new agribusinesses, such as a certified kitchen for preparing value-added products. I led a successful community effort to submit a FLEX-E Grant to conduct a feasibility study for this venture. We received $8000 that will be combined with a $2000 community match to conduct this feasibility study.

We are bringing mundane things – like vegetable washing/processing – into the open, and turn that into yet another “thing” people can see and even participate in. Interactive stuff to help engage and educate.

We have subsequently re-written our entire farm insurance package. Definitely costing us more money, but correctly structured to provide product liability, liability coverage for our agri-tourism activities, etc. We also bit the bullet and set up a Workman’s Comp policy that now covers our farm interns and our hourly production employee.

Below are general comments (not specifically about new ventures):

We have downsized to create more balance in our lives. It has been one of the best decisions we have made. We are working 50% less but earning 75% of what we used to. A very good trade. Work smarter NOT harder.

I’m excited right now about promoting FOOD, local FOOD, and getting people to THINK about their FOOD!

It’s not just learning about new things out there, but finding out that some of the things you thought you might be doing right, you actually are! In addition, the contact and interaction with others in more-or-less the same business is invaluable.

Enjoy all the workshops. Wish I had more time to attend additional. Sometimes location is a challenge. I know they have to be centralized so understand can’t go to all. Sometimes bank the ideas to use in the future — not necessarily immediate use. Always learn something!

It was very informative and has led us to the current business which we would not be doing if I had not attended the workshop. So I thank you.

Due to the fact that I am a one-person operation, my health and limited strength did not allow me to implement any good ideas obtained from the workshop. My spouse works off the farm and has not been able to invest time and energy outside of daily chores. Not enough income to hire any personal leaves us in an overworked black hole. Hopefully time and energy will improve to allow positive movement in a forward progress in the future. At least we have good ideas to work with when things improve.

You don’t know what you don’t know! I am so thankful that Extension offered this workshop and I attended. It made all the difference in my financial viability last year. Without the changes made, my farm would not have survived the downturn in the economy.

Assessment of Project Approach and Areas of Further Study:

Areas needing additional study

While this project contributed to improved farm viability through adoption of agritourism practices throughout the Northeast region, more work is needed to develop agritourism best practices and support their implementation. As demand for agritourism and local foods continues to increase, more farms are diversifying and interacting directly with the public. Adopting best practices has become even more critical and an increasing number of farmers need support in this area.

Better information about the impacts of agritourism ventures on farm viability is needed. In particular, further research is needed to refine the quality of life indicators and test the index with other projects. Quality of life is a central concern for individuals and communities, which makes it an especially important outcome to measure. However it is a difficult concept to measure because it has multiple definitions and meanings and can be examined at several scales. As program evaluation has become a critical means for measuring accountability and improving effectiveness of programs, further research is needed to develop a widely accepted index for measuring changes in quality of life indicators as a result of projects like those supported by SARE.

Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture or SARE.