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Fact sheet For a comprehensive list of our publications visit www.rce.rutgers.edu

Agricultural Tourism as IncomeBased Risk Management Strategy for Greenhouse and Nursery Producers Robin G. Brumfield, Ph.D., Extension Specialist in Farm Management & Edouard K. Mafoua, Ph.D., Research Associate in Agricultural Economics

How Does the Green Industry Impact U.S. Agriculture? The green industry, which includes floriculture and environmental horticulture, is the fastest growing segment of the agricultural industry in the U.S., averaging 7% annual growth since 1992. Based on the 1997 Census of Agriculture, nursery and greenhouse crops (including bedding plants, potted flowering plants, foliage plants, cut flowers, and cultivated greens), landscape nursery plants, unfinished plant material, sod, and flower and vegetable seeds were the sixth largest agricultural commodity group in the U.S. and was expected to move up in rank. The farm gate value for these commodities of $10.9 billion in 1997, represented 11% of total farm cash receipts. Grower cash receipts for the U.S. green industry reached $12.1 billion in 1998. This growth was due to increasing urbanization and the rapid growth of new residential and commercial developments, and to the past strength of the U.S. economy, resulting in greater disposable income and increased consumption of horticulture products. However, as growth in this sector continued, so did competition. Most nursery and greenhouse operators are relatively small and family-owned businesses, serving local markets. They have been forced to adapt to an increasingly global and competitive marketplace by developing new products and marketing strategies. Since

the mid-1980s, nursery and greenhouse firms have increased in size; however, production efficiencies have remained relatively constant and costs of production have increased for labor and overhead, with the result that profitability has declined. Growers are concerned with profit maximization, efficiency, and the survival of their business.

What is Agricultural Tourism? Agricultural tourism as a direct marketing activity may provide special opportunities to growers to reduce risks via diversification in a competing and urbanizing economic environment. This activity may share quasi-fixed inputs (e.g., information, machinery, labor, etc.) with other enterprises and enhance business efficiency and profitability. Agricultural tourism is an expanding sector within the United States and around the world. Agricultural tourism has also been referred to as “Agri-tourism” and “Agriculturally based leisure attractions.” Called “Agriturismo” in Italy, “Farm Stay” in New Zealand, and “Sleeping in the Straw” in Switzerland, it is defined as “a business conducted by a producer for the enjoyment and education of the public, to promote the products and thereby generate additional income (Sustainable Agriculture, 1998).” Agri-tourism is the economic activity that occurs when people link travel with products, services, and experi-


ences of agriculture. It includes visits to nursery and greenhouse attractions as part of a leisure time activity.

about $2.2 billion. In 1998, the New Hampshire Office of Travel and Tourism Development estimated over 20 million tourists visited New Hampshire spending in excess of $2.5 billion. The largest number of visitors is typically during the summer season from June through August with over 40 percent of all visitors and annual spending. The 1997 Census of Agriculture showed net market value of agricultural products at $150 million. New Hampshire Department of Agriculture, Markets and Food estimate agricultural and related product sales and services at $250 million annually. The opportunity exists to “sell” agricultural services and the farming experience to the tourist market.

Agritourism enterprises can take many forms for the greenhouse industry. On location, property can be designed as nursery trails, picnic or camping grounds, farmers markets, or roadside stands to attract customers. Consumers may seek overnight vacation activities such as farm stays or bed-and-breakfast lodging. Educational offerings such as planting demonstrations, equipment and garden displays, and greenhouse museums give consumers a greater understanding of green industry products. Nursery and greenhouse operations are popular tour sites for school and group tours.

What are the Advantages of Agritourism?

Special events such as Spring Flower Fairs, Flower Shows, Fall Foliage Festivals, Halloween Displays, and birthday parties invite consumers to the nursery/greenhouse operations. Activities like “pick-your-own-flowers” or “choose-and-cut” Christmas trees also present opportunities to attract new consumers.

Significant benefits can be gainedfrom spreading depreciation, interest, taxes, insurance, rental, or advertising costs that are fixed in the short run over additional activities such as agri-tourism. Excess capacity may allow growers to increase the scope of activities. Agritourism may require minimal additional investment and may utilize excess capacity of labor, capital, land, and natural resources. Promoting agri-tourism in a greenhouse is a revenue risk management strategy.

These activities add value to the green industry and rural products, and create markets for them. Nurseries and greenhouses that sell products directly to visitors can help attract large numbers of visitors to a community. These visitors may also buy meals, lodging, and items from businesses that serve tourists.

How Important is Agritourism?

Agri-tourism attracts customers to greenhouses. A pickyour-own flowers enterprise or cut-your-own Christmas tree or a nursery activity will draw families. These activities provide exercise, lots of fresh air, and something to take home.

In a study of agri-tourism in Cochise County, Arizona, 81,450 non-local visitors spent close to $1 million and generated $1.9 million in sales impacts in the county. The average expenditure per day visitor party, and overnight visitor party, was $58 and $130 respectively (individuals spent on average, $12 and $47 for day and overnight excursions respectively).

Agritourism may contribute to the stability of the green industry in the United States. It may help to improve farm viability by increasing the commercial possibilities of greenhouses and nurseries through both direct sales of crops and other business accommodations and by adding value to regional landscapes. Agritourism is an excellent means of supporting rural communities. Tourists bring in dollars to local communities that keep rural communities alive and prosperous. Partnering of tourism and the green industry will help create and strengthen rural economies.

The New York State Department of Agriculture and Markets has a new initiative to support agriculture-based economic development programs including sponsoring programs such as “Pride of New York,” “I Love New York Farms,” and “Guide to Fresh Farm Products.” The New York winery trail is a successful example of agri-tourism development in New York.

Agri-tourism is an opportunity to increase agricultural awareness among the public and to promote nursery/ greenhouse products. It also provides opportunities to increase consumers’ understanding of the environmental horticulture industry. The interaction of tourists with

Virginia state government has estimated that its tourist industry generated about $11.2 billion in 1998 revenues, whereas the agricultural tourism industry generated

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Some ideas for getting started:

nursery or greenhouse activities or crops carries an educational aspect. Tourists tend to enjoy learning about items and processes that they will not participate in directly. A guided walking tour of a garden center or nursery will help children learn the basics of how plants grow, and learn what a grower’s job includes. This can potentially inspire new employees! This is what many greenhouse and nursery owners want the most. They will see the greenhouse equipment, learn about bugs and how they affect the greenhouse business, and will understand the importance of preserving farmland as open space for the future.

Set up weekend themes or festivals to attract customers. People are willing to drive one, two, or three hours if there are enough attractions to make a worthwhile family outing. Busy urbanities are seeking places to go for a weekend family outing, where the kids can find out how plants grow.

Advertise to attract customers to your greenhouse. Identify target customers and focus advertising in the densest population centers, such as urban areas. Place ads where families with children tend to spend money such as ice cream shops, fast food outlets, and amusement parks. You may join a group that aids in marketing and promoting of agri-tourism activities. Don’t overlook free advertising. Local papers are often happy to run feature stories about events happening at your operation.

Create in-store events that maximize retail stores and give something back to the community. Consider national events, such as the Olympics Games, seasonal events such as New Year’s, St. Valentine’s, St. Patrick’s, Easter, Mothers’ Day, Independence Day, Fathers’ Day, Halloween, and Christmas.

Develop interactive demonstrations. Brainstorm with your employees. Show the customer that you understand gardening (and don’t just sell plants), and provide some entertainment in the garden center. Customers like to feel, taste, smell, touch, and generally get involved with plants. The more interactive your demonstrations are, the more inclined a customer is to buy. Demonstrations could include making hanging baskets, window boxes, patio bowls or herb gardens, rose planting and pruning, or arranging plants to maximum effect. Keep a record of all demonstrations, what products you used, the increase in sales as a result of your demonstration, and consumers’ reactions.

Consider how you and your employees dress during the event. Having tee shirts with your business logo lets customers know who to ask for help. Customers like to shop where they know someone cares.

Consider value added services such as gift-wraps, shipping, accepting credit cards.

What are the Disadvantages of Agritourism? Some disadvantages to agri-tourism are increased traffic, the need for more parking, and conflicts with nonfarm neighbors. It may also require additional investment in farm stands, etc. The owner or employee who deals with the public must be people oriented. Agritourism may require hiring and training more people in an already tight job market. When inviting the public to your greenhouse, you must first make your property as safe as possible to avoid accidents. You should contact your insurance agent and adjust your policy appropriately adjusted. You may have a liability insurance plan that covers activities such as farm stand sales, pick-youown operations, school tours, festivals, and so on. To reduce liability, rules on picking and climbing should be stated on signs and in brochures distributed to customers.

How Can I Get Started With Agritourism? First consider your location. Are you on a busy road that lends itself to retail sales? If not, this does not mean you cannot draw customers to your greenhouse or nursery. Good marketing is a key to success of the industry. Agricultural tourists are interested in having a nursery or greenhouse experience and, incidentally, want to buy plants and flowers. Consequently, you need to be aware that you are selling services as well as products. You must find out who agricultural tourists are and what they are looking for in a greenhouse or nursery so that you may provide services that appeal to your visitors. Your knowledge of general tourism trends may affect agri-tourism. You must assess the benefits and cost of this new activity may have on your business.

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Be creative. One grower in New Jersey has an annual miners’ night. He turns the lights off, opens the greenhouse at night, gives miners’ hats to customers, and has them go through the greenhouse with the lighted hats looking for plants. He makes shopping of plants fun events that customers love. Brainstorm with your employees. Coming up with ideas on your own is difficult. Getting your team together will enable you to come up with different ideas. Once you have brainstormed ideas, set a budget for the events and ensure all team members are aware of the event and the budget.

Related Web Sites AgriTourism – A Growth Industry. September 21, 2000. http://public.gov.nf.ca/agric/whatsnew/AgriTourism.htm. Defining Agri-Tourism. March 1, 1999. www.gov.nf.ca/ agric/Tourism/define.htm. Direct Farm Marketing and Tourism Handbook. August 17, 1999. http://ag.arizona.edu/arec/pubs/dmkt/ dmkt.html. Rilla, Ellen. “Unique Niches, Agritourism in Britain and New England.” September 27, 2000. www.sfc.ucdavis.edu/agritourism/printer.html.

Sources Tavernier, M. E., A. O. Adelaja and M.P. Hartley.1996. “An Agri-Tourism as Income-based Strategy for Farm Operators.” Journal of the ASFMRA, pp.52-59. USDA. 1999. 1997 Census of Agriculture. United States Department of Agriculture, Washington, DC.

Sustainable Agriculture. “Unique Niches: Agritourism Grows in West Marin.” Cooperative Extension Agricultural Experiment Station University of California, Vol. 10, No. 2, p. 3, Summer 1998.

USDA. 1999. Floriculture and Environmental Horticulture – Situation and Outlook Yearbook. Economic Research Service, United States Department of Agriculture, Washington D.C. October 1999.

Acknowledgement Uva, W.L. 1999. An Analysis of the Economic Dimensions of the New York State Greenhouse Industry. RB 9908, Department of Agricultural, Resource, and Managerial Economics, Cornell University. (ERS/ USDA).

The risk management education initiative is a joint project sponsored by Rutgers Cooperative Extension and the Risk Management Agency (RMA) of the United States Department of Agriculture (USDA).

© 2004 by Rutgers Cooperative Research & Extension, NJAES, Rutgers, The State University of New Jersey. Desktop publishing by Rutgers-Cook College Resource Center

Published: May 2002

RUTGERS COOPERATIVE RESEARCH & EXTENSION N.J. AGRICULTURAL EXPERIMENT STATION RUTGERS, THE STATE UNIVERSITY OF NEW JERSEY NEW BRUNSWICK Distributed in cooperation with U.S. Department of Agriculture in furtherance of the Acts of Congress on May 8 and June 30, 1914. Rutgers Cooperative Extension works in agriculture, family and community health sciences, and 4-H youth development. Dr. Karyn Malinowski, Director of Extension. Rutgers Cooperative Research & Extension provides information and educational services to all people without regard to race, color, national origin, gender, religion, age, disability, political beliefs, sexual orientation, or marital or family status. (Not all prohibited bases apply to all programs.) Rutgers Cooperative Research & Extension is an Equal Opportunity Program Provider and Employer.

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