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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ABSTRACT

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

(1 922-1 985)

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 WH pninary agnculfural producbonn .................... 29

............................................ 2.4 2.9 Db&ne h m mahe& 30

.......................................... 2.4.2.1 0 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 F m Opemtofs 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 Strate gy. ................... 85

5.3.2 Strategic Alliances behveen Agriculture and Tourism

..................................................................... Sectors -85

......................................... 5.3.2.1 Issue: rnarkefng ag~.lounsm 86

................................................. 5.3 .2.2 lssue: 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 4.1 5 - 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 - F a m 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, 1 992; 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, 1 996).

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,

1 990).

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., 1 996).

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 f a n 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. J i also 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, 1 992), 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 1 996; Dwyer 8 Hodge, 1 996; Pierce, 1 993). 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,

1 994).

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 q s t s to society.

Many fam operators have responded to these pressures by turning

towards more sustainable agricultural pradices andor wnsidering other

income sources (Hilts, 1 993).

' 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,

1 993).

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 (1 961 -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,

1 993).

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

(1 988) 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, 1 989), 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 f a n 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 (1 987) 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 (1 992: 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 (1 987:2) 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; Il bery, 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 -7 Response

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 (1 992), 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 Tourism'

I lded

Denotes focus of this research Structural ~iversification

Farm Diversification

Agricultural DiversiTication

I

Saurce: adapted f m llbery (1992) 'State-assisted Fann Dhrersification In the Unitad Kingdom' ln: Bowlw, I.R, Bryant, C.R. and Nek, M D (eds.) Contempofary Rurel Systemsk TfansYlbn: Voium 1 A@uilnrm andEn&nmnt, London: C-AB Intemabai. p.1 W-116 and 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, m i c h for convenience can be categorised into the

f~ilowing groups:

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, 1 990).

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 c m 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

T O U ~ 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 (1 983: 169) defines farm

tourism as a tourism enterprise on a working farm, which is "largely

supplementary to existing farm activities." Dernoi (1 983: 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 (1 992) 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, 1 990: 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 28,000 in 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 1 O 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 (1 W6), Turner 8 Davis (1993), Maude & van Rest (1 985)

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., 1 995; 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., 1 993);

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).

2.4.2.2 La& of marùeang knowledge

Many small businesses have failed because of poor or insufficient

marketing strategies (Friesen, 1995; Palmer, 1995; Embacher, 1 994; 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; I lbery, 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, 1 993; 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' i n t ~ 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, 1 985).

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, 1 995). 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,

1 993).

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,

i 989);

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.

(1 995:6) 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 f a n diversification (Dwyer & Hodge, 1996;

Hjalager, 1996; Bryden et al., 1 993).

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 c m 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 (1 996) 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-seasonaln and "thinking like a tourist"(Williarns, 1 996).

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

W F Tourisme 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, 19951 3). 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 c m provide 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 financial ly 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, 1 994), attractions (Strategic Partnerships, 1996;

Stokes, 1993; Cox & Fox, 1990) and policy (Hjalager, 1996; Luloff et al.,

1 995).

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 F m Operators

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

'goods questionnaires had been retumed. An additional 20 questionnaires

were retumed a i 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 (1 9%) 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 1 1 -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 P opu/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 s a p e 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 c m exist.

Fourth, the questionnaire was conducted only in English, and not al1 f a m

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

' 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).

TYPE OF ANAYSIS USED

Section 4.2 I Definition of Sample and Sample Size

Section 4.3 Profile of Successful Agri-tourism

Operations Section 4.4

Differences between Agri-tounsm

' 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.

Frequency

Frequency /percentiles

Chi-square t-test, Analysis of VarÎance (ANOVA)~

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 Resu lts

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

4.2.2 Definition of Agriitourism Businesses

Bath an agri-tourism and value added processing business ûdy an agri-to& business ûniy value-added processing Total

A financially less successful agi?-fourism business was defined as a

64

farm operation with an estimated gross revenues in 1995 from agri-tourism

72

32

168

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.

' small cell size

TYPE OF AGRI-TOURISM BUSINESS

u

Financiaiiy less suGcessful S$50,000 1 85 I

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 (61 Oh) 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. - TYPE OF BUSINESS FINANCIALLY

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 (1 990). 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 ( f i t stands) 80.8

Other retail sales (e.g. T-shirts, gifts, crafts) 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.

4.3.7 Marketing Promotion

TYPE OF AGRI-TOURISM BUSINESS Financidiy çuccessful

Al1 of the financially successful fam operations used word of mouth

YEARS IN OPERATION* (MEAN)

13.8

as a marketing technique. Financially successful agri-tourism operations

*n=26

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.

I

* 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?

WORK WITH OTHER BUSINESSES

FïNANCLALLY SUCCESSFUL*

%

Yes 50.0

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.

-

REGIONS n ESTIMATED GROSS AGRI-TOURZSM REVENUE (WEIGHIED AVERAGEIN SIG.

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&cilities and cquipnmt 12609.5 42 67200.0 15 1.8333 - (eq~ipUl=G traits, ri- m g 1804.9 41 7952.4 15 3.3090 l i v e )

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 d e s ( f i t stands)

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

mun terparts.

Table 4.14 Number of activities.

N[iMBER OF AGRI- TYPE OF AGRI-TOURISM ToURISM F BUSINESS (AVERAGE) IG 1

*** indiates signiticant at .O5 level of pmbabiiiw, ** n=26 * n=85

I

4.4.5 Months of Operation

Chi square tests indicated that the two groups did not differ

Financialiy less succesdul*

Financialiy successful**

significantly in any of the months of operation except June. For that month,

financially successful agri-tourism operations were significantly more Iikely

3 -3

4.6

to be open than the financially less successful agri-tourism operations

(Table 4.15).

6.0530

Table 4.15 Difîerence in montbs of operation.

O.OIS***

'** 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 4.1 6). 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 F i c i a l l y Iess n Financially n

su- F Sig.

s u d

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 h m 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.

1 NUMBER OF AGRI-TOURISM TYPE OF AGRI-TOURISM 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, h i l e the 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

prod ucts 8 services effective1 y 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 f a m 13.6 31.8 50 21 inf~stnicture

Mig ht m a t e 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)s of the agencies interviewed

considered government regulations to be a constraint, while another two

f ihs (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 f a m 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 (1 6%).

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 (41 Oh) 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 (1 4%) 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 f a m 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 h i c h 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, f a n 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 cusfomer satisfaction.

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 ~evelopment 1 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 s a p e 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 m a t e an 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~eated between 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-operative support system

which links individual farm businesses at the regional, provincial and

federal IeveI and provides a range of services to its members (Bramwell,

1 994).

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, 1 994).

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 c m gain a better understanding of certain tourism issues, such

as customer a re , 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, 1 996a, Palmer 1 995).

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

Num ber 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 f a n s 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 f a n or 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

PERCEIVED CONSTRAINTS OF SUPPORT AGENCIES 1. Limiteâ awareness of how to market product & service effectively 2. timited awareness of product & service standards in order to cornmte in marketdace 3. Limited capabilities of fam operators to develop the produds and services needed to wmpete in the marketplace 4. Limited capabilities of fam infrastructure to handle agri-tourisrn demands

L

PERCEIVED CONSTRAINTS OF FARM OPERATORS 1. Excessive govemment regulations

2. Prohibitive financial costs

3. Lack of time to participate in agri- tourism businesses.

4. Lack of marketing awareness 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 tervie wing 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.

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CAPTURE THE OPPORTUNITY - FARM BASED BUSINESS '96 - SURVEY

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 Processing business - please answer al1 questions

Ope& only an Agri-tourisrn business -please wnü~ue and do nof answer question 3

17 Operate only a Value Added Processing business - please start wiUI question 3

Do not cumntiy operate an Agri-tourism or Value Added Processing business, but am interested in 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. About Your Agri-tourism Business

2.1 How many years have you been operaling your Agri- burlsm business? years

llyou do no! opetate a Agri-tomsm business go 10 question 3

2.2 What type of activitiesiathactions have you developed for mis Agri-tourism business? PIease check al1 tht ~PP!Y

Guided fam tours

Sen guided tours

O Bed & Breakfast

Picnic areas

Educaüon workshops (pruning, dried lower anangement wwlspinning)

Fmgate produce d e s (fni stands)

D Mer m&ii d e s (ï-shirts, gifts, crafts)

a AnimaUnabire displays/petting zoosfides

n Dbpiay gardens (herbs, landscaping)

0 ûther actMties, piease iist

2.3 Please e s û W ttie percent of your M l 9 9 5 Farm Rewnue gcnerated by visitars participating in me fdlowing Agri-tounsm activibles:

Percent ol Tabl Agri-lourism Activity 1995 Rnn Revenue

Farin tours %

U-Kck %

OnmigM accommodation %

Purchashg of fam produce %

Retail sales, promssed hm, d i s 1 T-shiris, etc. %

m e r acüvities, Gst sources: %

3. About mur Value Added Pmcessing Butines

3.1 How many years have you been opefating a Value Added Processing business. YeW

If you do not operate a Value Added Processrilg busimss please go to question 4.

32 for each of your vdue added produclas please indicaie the number of years that you have been producing mis

. pmduct and estimate the pereentage of total 1995 farm revenues that mis pmduct genented?

3.3 Please indicate îhe distriiub'on channels mat you use and ttie percenfage of your total 1995 produclion inventory by distribution channel for your value added produc&.

J i f Use Chanml % of Total Production

Mail order/Direct mai %

O Relail outlets %

Famers markets %

O ~xpon marms %

Whoiesaie %

ûther, please 851

4. Yow Agri-touthm and Value Added Customen

4.1 Please indicate your dates of operation in 1995.

4.2 Please estimate the average number of clitnîs that you served pet day in 1995. clients

4.3 Please esb'mte the average daity revenue mat you genemd in 1995 from agrb~r ism and value added.

4.4 How much tirne does your typicai custorner spend visiting your business?

Less than 1 hour 0 1-3 hours O 4-8 houn

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&

5.1 What M n g actMties did y w use to promo?e your Agfi-tourisrn or Value Added business in 1995? (Check (4) Uie appp&te &mes).

h l of Participation

MarltEting Ptognm

Word of Mouth Direct Mail carnpaign Brochures SIgnage Agricufbral nlated pubIications

Tourism nlated publicdjons

Consumer and ûade show t%hibils Newspaper advertlsing

ûther, specify:

A Lot Some

O ISi n 17 0 n CI

cl O 0 0

a

0 O Cli a

Not At Al1

n CI

.

O

a O

n

5.2 Pltue circle Ihe top üuee actMb'es b the l o v e Gst mat have been most useful b you in markeb'ng your business and products.

5.3 Do you work wim oUier businesses to pmmOte ywr ~qri-burism or Valut Addad Roeesshg produets?

0 Yes. pleasc specity who 81ey are:

6. Abonî me Economit Benefits of Agri-lourism and Value Addtd Processing

6.1 WM CapM @endiâtres I R 6 and toW to rklc) am associated wim ywr Agfi-dwrlsm or Vaha Added Proasskig business?

am ~ o b l am W b -

1995 - @ui#ngt.-. waShmm6 S s Pmessiqhcaakruid Es- s t Enhminmcnt(ePuiprrant mik,r#ts.pctl ingw s s

OmCrpUEitpcndibins f s

6 2 Whri operding expendiims wen associt$d WMI )iwr Afitwrism or Value Addad Procassing business in l9%?

1995 m-

Wages & salaries for staff invo(ved wim Airi-tPuiism s Wages & Sahies for staff imoked in Vaiue Added Pm?SsiIIp $

Marketing ~ e n d b n s S

Total Expendiiures S

6.3 In 1995 how rmny yeu round, seasonai uid parttirne people did you amplay for (not ineluding ywrscti):

6.4 Pieas estima& yourtoîai 1995 Gmss Revenues or mfmte a mge of gros revenues ganerakd by your businus forme folbmng wimponenrr:

6.5 Did your business gmw in 19% and if yas by how much?

O Yes, by how much mr 1994 %

O No

6.6 Who spends tha m a t llme ninning your m n t Agd- bwrism Md Vaiui Added business?

O you Ki ywrspouse

y o u r s i i h p Il empîoyees El p m e r

7. Fulure GmwVi of Agri-tourhm and Value Addcd Processinu

Please use a separare piéce of paper if you do not have enough space io answer Vie quest~ons below.

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 fami

cl O A chance to educate people about fam in British Columbia

O O O

7.2 Are you planning to expand your business?

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?

7.3 Do you anticipate a growth in your Agri-tourism or Value Added Processing business in 1 W6?

Yes. Please est ima % growth % Will stay the same as 1995

O Anb'cipate a decrease, M y ?

7.4 Are there any comnts or concems that are prevenüng you from mgandhg or developing your Agrl-tourism business orVafue Added Processing (Le., financial, gvemment regulatins, fra!n»ig, mamiing) ?

PIease describe and be as specific as possible.

7.5 Please provide any possible solutions that you have ta addnssing these consûaints.

7.6 Please provide any iuriher comments.

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 a t t l e 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 l l a m sweaters. m i l e value-added pmessing c m be 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( )

I f no, tlrank respo~ident for tlieir time and close srrrvey.

2.0 Your Organization's lnvolvement With A@-Tourism And Valueadded Proces~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 d e b e ) Agi-tourism:

Value-added processing:

c) Training Support? (Please desaibe) Agri-tourism:

Value-added procesçing:

d) Financial Support? (Please d d b e ) A@-tourism:

Value-added processing:

e) Technical Support (e.g. business counselihg, newsletters, statistis gathering, etc.) Please desaibe). Agri-tourism:

2 2 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 p w t h in business opportunities in these sectors over the next 5 years?

Y s 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.

B a d on 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

1) Concem that visitor attitudes concerning many farm practices might conflict with those of farmea. ( 1

m) Concem that on-farm visitor behaviours might conflict with c u m t fanner lifestyles. ( )

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 c a w environmental damage h m visitors /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.

Abc Dorr-t

O O

O O

3.4 Do you have any further comments conceming the p w t h , 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 e f f i i 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 F m Marketing Association)

nced to g d 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 Aswmati . .

on mœtings) ust Direct Farm Marketing Amchtion as an umbrclla organization to lobby with gûvcl~mtllt 0-ti0iu foi m0rC aod U d d h@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 g u i & b

use a single orgaabmion such as Direct F m marketing hochtion or Fruit G m r s Association to bt advaaey v o i e 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 h m opcrations 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 h l o p pcakr awaftncss ofqriality proQd rquhamts through petworlring 1 diswsiolls at othu datai conftrt l l~~~ Iuch as isDDUoet FmiiMaikering Asdation seeL amsumer infdniiptjon at F m ' s Markets conduct Cmrdinatcd on-sitc wnsumcr nirvys

O conduct silent shoppr sumys 1 Eann sites encoumgc the Dirra F m Makahg h a d a i o n 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 W s a m p l e 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 d i n i t y p 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 H o p Tour Gui& CPlcndars for disvibution to ~ i r cornpunies fbr their planning purposes ncsd to develop same rrpndnrdc of rumgnid qualiry to makc parwtsbip ktwaen likc-mirulai s~opiiers jmsii'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 c r e a i c ~ ~ ~ t o e s t a b i i s h a p p m p ~ p r i c i n g s t n t c g i ~ ~ med ta cririte partacrships through Direct Fann Mark~ing Assoaation 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: c m -3 devciop ii&agcs with OtbCf agrïcuiûuai in s a n ~ region e@aiiy for tOUfS (e.g bikcs) dcvelop with sdmis, a ! ~ ~ M o n s , community groupd for public relations purposes

Solutions:

Workkop: NoiUoAoo - 1

Issue: Tmining

Solutions:

WorArlCop: h g @ - 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 ~ l o y c c s through Diract Farm mrkchg Association dtvtlop a gmup of Superhost üaining programs iu conjunction with kxiafion mgg confinas .

Issue: Ob taining 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 l a d 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 h m public 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 e s p d y LDB 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?ryustry Health 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 a c h i d = Age. = Money to invest in f h n equipment and staff.

Government regdations - tw much interference in private enterprises. No constructive help. Just prevtntativ d e s and regulations.

= Gaverament reguiations regarding the ALR = Not enough U-pick s?mwûcrries. = Govemment regdafion - idiotic rd tape h m Department of Highways

My age, and my location is remote without communications. Expansion quim more work h m myself. 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 1 make about S3hour for e expended now!

= Timc. = Time and financial. a Gonmment reguiations - ~tgional district zoning and constrictions OU ALR lands. a Financial.

Govemment reguiations - fedcral reguiations regarding sales in (at) farmus markets. Financial - direct d t 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 h m the 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 t h e for 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 r d consrraint for ris as neither my spouse nor 1 are b l edgcab ie in this fieid. W

have been interesteci in pursuing a B & B I ~ idea & some detached buildings on our farm but municipal laws prohibit this h m happening.

* Population base only so big to draw from We have blueber~ies and would U e to have a winery but we are having a difndty in meeting m g replat which are made for &rapts. We are the ones who i o t a blueberry 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 ( M y farni). 3 Marketing - contact for wool sales and more training to recogn. the quality of the p d u c t Signas is a pmt

Constraints Or Concerns Preventing You From Expanding Or Developing Your A*-ToutLlrn Business Or Valr Added Processin& JO~erate an 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 h m fanns. => This enterprise grows because we have a farm aunosphere mixed with the s e l h g of pumpkins during Octobei

Being an every-day type f m family 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. = F i c i a l , 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.). F i c i a l (i.e. ranch can't d y &ord to hel] expansion that is rcquired). Signage not aiiowed dong public roads. Too many farmea uying to do the same (farm gatc d e s ) 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 ams large enough to park numbers of vehicles on a m a l acreage 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 k i n g 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 e l m

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 o w a m ai 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 F i c i a l 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. T h e - having enough time to do ihe best job 1 can in our business AND having enough time to spend with fa and fiiends.

s F i c i a l . 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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