AGRITOURISM OPPORTUNITIES FOR NORTH CAROLINA

Prepared by:
David Fogarty, Agricultural Agent, Northhampton County Cooperative Extension Service
Mitch Renkow, Department of Agricultural and Resource Economics

An agritourism business is a farm enterprise operated for the enjoyment and education of the public that may also generate additional farm income by promoting farm products.

Farm-related tourism in America can be traced to the early 1900s when families visited relatives in an effort to escape the heat of the city summer. A similar rationale brings people to the country today, as an escape for the family to a slower, less stressful environment. But with the decline in family farms it is unusual for anyone in the city to have rural relatives with whom they can stay ^__ only 1.9% of Americans lived on farms in 1992, compared with 40% in 1900. This has led to an increase in agritourism vacations.

In North Carolina, agritourism already exists in a wide range of on-farm recreation and hospitality businesses. Examples of the activities offered by these businesses include farm tours, farm bed and breakfasts, wineries, petting zoos, fee hunting, fee fishing, farm vacations, horseback riding, and camping. Many of these enterprises are tied to farm retail operations such as a roadside stand, pick-your-own-operation, or craft shop. The possibilities for agriculture-related tourism opportunities is limited only by the imagination, and have included such things as pig races, corn mazes, and Halloween pumpkin patches.

For North Carolina's farmers, diversification has always been a good management strategy for maintaining incomes in the face of declining profits from specific farm enterprises. While the state's 50,000 farmers grow over 80 different commodities, one option for diversification that they may not have considered is tourism.

Tourism is the world's largest industry with an estimated $3.4 trillion in annual revenues. The 1996 North Carolina Travel Study estimated that business travel and recreational tourist expenditures totaled $9.8 billion statewide. A 1993 survey by the Travel Industry Association of America ranked rural destinations third among the eight most popular vacations, ahead of state parks and theme parks. One particular strength of rural areas lies in their attractiveness to travelers, especially families with children interested in learning about a region’s heritage ^__ its history, people, and natural resources.

North Carolina's heritage is tied to agriculture. Cotton, tobacco, and livestock have been the lifeblood of the state’s economy since colonial days. Despite rapid increases in other economic sectors, agriculture is still the state's number one industry and North Carolina ranks third nationally in terms of net farm income.

Agritourism businesses can yield significant benefits to the community in which they operate. Other recreational and hospitality businesses in the area ^__ restaurants, retail stores, hotels and the like ^__ profit from the increased traffic of tourists. For this reason, county and regional development groups may do well to incorporate agritourism into their community economic development plans.

In addition, some agritourism ventures, such as the development of a farm-related museum, a petting zoo, or tours of farms and agribusinesses, require broader community participation. The support of local businesses, chambers of commerce, and tourism development boards usually leads to better coordination and increases the likelihood of success for these agritourism businesses.

For rural communities trying to diversify their economies, agritourism offers a clean alternative that requires very little capital outlay for infrastructure. But under what circumstances does a tourism-based business make sense for a specific farm family?

Agritourism offers a number of potential advantages. Agritourism enterprises create employment opportunities for family members and supplement the family's income. In addition, family members have the opportunity to make new friends and forge stronger links to the community. One of the most rewarding aspects of agritourism for many farmers is the opportunity to provide the public a better understanding of what agriculture is really about.

On the other hand, the potential disadvantages of an agritourism enterprise must also be considered. These may include interference with the main farm operations, loss of privacy, extra responsibilities, the possible need to hire additional labor, modest financial returns, and the high liability risk.

Developing a successful new farm enterprise requires thorough market research and business planning. Each individual situation is unique. Farmers are not encouraged to start enterprises that are inappropriate for them, or that have limited markets already served by existing operators.

An important first step in evaluating a new business opportunity is to first examine the goals and the philosophies of the whole farm family before making any decisions. Some agritourism enterprises are not entered into for the purpose of profit. They are seen by the farm family as an exciting opportunity to meet new people, share their farm-life with others, and to provide a little extra spending money. The family must be careful not to intermix or misinterpret profit and the non-profit objectives.

Along with establishing goals, prospective agritourism entrepreneurs need to do some market research and financial budgeting. Whether a farmer chooses to start an agricultural bed and breakfast, host day visits to the farm or enter into a more creative enterprise, the key is to understand the options available and choose an enterprise that is suited to that particular farm and family. This requires careful consideration of a host of management issues that will affect the success of an agritourism enterprise: social skills, site considerations, insurance, labor, and regulations. Very careful consideration needs to be given to each of these factors before venturing into an agritourism business.

Social skills are probably the most important of these factors. Entrepreneurs involved in agritourism need to be "people" persons ^__ they should enjoy having people in their homes, they need to be open to questions and they need to have the ability to "sell" themselves and their farm over the phone. They also need to be flexible ^__ work may be interrupted and this can't be perceived by the guests as an annoyance.

Site involves the location of the farm as well as the nature of the farm itself. It is necessary that the farm be accessible to a sufficiently large visitor population; for obvious reasons, city people are more interested than country people in visiting a farm. Also most agritourism visits tend to occur on the weekend, so being a short drive away from an urban center is an asset. The farm itself needs to be attractive, clean and free of odor. Although this may conflict with reality, visitors do not want to be bothered by manure and fodder.

Liability insurance needs to be obtained prior to initiating an agritourism business. A farmer may be held legally responsible for any person on his or her property and liability insurance can protect the farm and its assets. This can be added to the existing farm owner's policy or through writing a general liability policy. It is safest to assume that any new operation would not be covered by an existing policy; a qualified insurance agent, as well as an attorney, should be consulted to guarantee full protection.

Labor will be greatly affected by the new agritourism business. Farmers will need to decide who will be the primary manager of the new enterprise, and whether family labor will be enough to handle the increased responsibilities or if regular farm employees will need to devote time to the new venture. Children can be a fabulous resource in this area, assuming that they are mature enough and interested enough to participate.

Local, state and federal regulations affect everything from the restrooms needed to signage and zoning requirements. Since agritourism is a relatively new industry, it is not always clear what agency is responsible for each aspect of the enterprise. The additional resources listed below can help cut through the confusion.

The key to establishing a successful agritourism business is understanding the available options and choosing an enterprise that is suitable to the individual situation. For more information contact your Cooperative Extension Office and refer to the following resources.

Bliss, Ethel. Ethilton Farms: For Over Twenty Years a Haven O'Bliss for City Vacationers. C.W. Brown Printing.

Colaric, Susan. 1996. Northampton County Cooperative Extension Center Literature Review on Farm Tourism. Development Research Associates: 1996.

Hilchey, Duncan. 1993. Agri-tourism in New York State: Opportunities and Challenges in Farm-Based Recreation and Hospitality. Farming Alternatives Program, Department of Rural Sociology, Cornell University.

Hotch, Ripley and Carl Glassman. 1992. How to Start & Run Your Own Bed & Breakfast Inn. Stackpole Books.

Northeast Regional Agricultural Engineering Service. 1988. Farming Alternatives, A Guide to Evaluating the Feasibility of New Farm-based Enterprises. Cooperative Extension Service.

Ryan, Barbara and Debbie Vickery. 1994. Starting a Bed and Breakfast In North Carolina: Important Issues to Examine Before Opening a Bed & Breakfast Facility in the State of North Carolina. North Carolina Bed & Breakfasts and Inns Association.

Thanks are expressed to the following reviewers of an earlier draft of this fact sheet: Gene Brothers, Department of Parks, Recreation, and Tourism Management, NCSU; and Steve Smutko, Department of Agricultural and Resource Economics, NCSU.

AREP97-2

2/17/98 Judy Bridges