Agritourism can boost farmers' revenue, Virginia Tech study finds

11 Feb 2015

Girl with basket of apples. — A recent Virginia Tech study found that agritourism, from pick-your-own apple orchards to pumpkin patches, can help boost profits.

From pick-your-own strawberry operations and winery tasting rooms to pumpkin patch fields and cut-your-own Christmas tree farms, agritourism is growing in the commonwealth and across the country. A recent statewide study by Virginia Tech found that it's not just a pleasant way to spend a Sunday — it’s also a viable way for farmers to supplement their income.

The commonwealth’s top two industries, agriculture and tourism, were evaluated using a survey-based study by a team from Virginia Tech’s College of Agriculture and Life Sciences and Virginia Cooperative Extension.

In Virginia, both the number of midsize farms and the revenue of those farms have been declining. The study found that agritourism could be a viable option for farm managers to diversify and augment income.

“In addition to identifying impediments to the agritourism industry in general, the study dealt with a decline of the midsize farms in the commonwealth, so finding ways to help the entrepreneur who would be likely to start a farming operation of this size was important,” said Gustavo Ferreira, assistant professor of agricultural and applied economics and Extension specialist.

Extension is hosting the 2015 Virginia Agritourism Conference on March 10, in Staunton, Virginia. Information and registration details can be found online. Topics that will be covered at the conference include event planning, marketing, zoning and land conservation, and food safety. Guests in attendance will include: Ed Jones, director of Virginia Cooperative Extension; Todd Haymore, secretary of agriculture and forestry; and Mary Rae Carter, special advisor for rural priorities.

The study defines agritourism as a value-added activity that generates additional net farm income and creates a loyal consumer base for branded farm products.

The value of agricultural products is on the rise, and tourism in the commonwealth has been increasing since 2002. The study indicates a marriage of the two has the potential to be a lucrative endeavor for farmers willing to invest in activities, employees, or facilities that would enhance agritourism initiatives on their property.

Forty-two percent of operators surveyed stated that agritourism contributed between 76 and 100 percent of their farm income. The study also found that in 2013 almost all of the operations surveyed claimed that the average agritourism visitor spent between $31 and $40 on property per visit.

Agriculture is Virginia’s number one industry and has consistently grown over the last two years to a record $285 billion in 2013. Tourism contributes the second highest amount of revenue and in 2012 generated $21.2 billion dollars and provided 210,000 jobs, according to the Virginia Tourism Board.

More than 470 Virginia agritourism operations answered the survey which included questions assessing:

demographic attributes;
operation characteristics;
financial positioning;
obstacles to success in the industry;
factors of success in the industry;
and future plans and feedback.

The study, which had a response rate of 52 percent, found that the following factors were found to be correlated to more profitable agritourism operations:

higher educational levels of the manager when the original motivation to establish an agritourism venue was additional income;
the size of the operation;
the percentage of gross farm income generated from agritourism;
and the average money spent per visitor.

Nearly half of the farmers who responded described themselves as somewhat profitable while roughly 10 percent identified themselves as very profitable.

Unlike Europe, where agritourism is a common activity that engages tourists and encourages interaction with local farmers, agritourism is not thought of in the same way in the United States. This could be costing both the agriculture and tourism industries lost revenue, not to mention the lost opportunity to strengthen relationships between farmers and consumers.

Wineries accounted for 44 percent of the respondents. The growth of the wine industry in the commonwealth over the last 10 years was cited as a positive example of the economic power of agritourism in the study.

Ferreira conducted the survey in conjunction with Community Viability Virginia Cooperative Extension agent Martha Walker.

“Farming isn’t just good business, it’s good community building,” said Martha Walker, community viability specialist with Virginia Cooperative Extension. “Our survey found that overall the industry is viable and has the potential to add value and income to the state’s number one industry.”

Written by Amy Loeffler.