Boosting on-farm income
Questions to ask yourself before launching an agritourism venture.
Jane Eckert, who pursued a career in corporate marketing before returning to her large family farm operation, now helps growers market agriculture through agritourism.
The average farm family earns more than 90 percent of its income off farm, a U.S. Department of Agriculture survey shows.
Direct-marketing expert Jane Eckert brought ideas for how to decrease dependence on off-farm income during the Women and Agriculture Conference held recently in Wenatchee, Washington.
Eckert, who is vice president of marketing for the Eckert Orchard Company, in Belleville, Illinois, said the USDA survey estimates that in 2006 the average farm household earned $80,344, of which only $6,666 came from farming activities.
Eckert grew up on a family farm but pursued a career in corporate marketing in California for 15 years before returning to the family business near St. Louis in 1987. In the 1950s, the family had a thousand-acre operation with a fruit packing house and storage facility, but later decided to get out of the commodity business.
The family figured that people would pay more money to come to the farm to pick their own produce. It's now a $10-million-a-year operation attracting up to 5,000 visitors annually. It has 400 acres of fruit production.
Often, family farmers want to run a successful operation to encourage the next generation to return to the farm, Eckert said, and in many cases, the only way to do that is to transform it into something beyond agricultural production.
Agritourism means attracting people to the farm to buy products or pay for entertainment, lodging, meals, and special activities.
"Agritourism is not any one thing," she said. "If you have an idea and you have a passion for it, you can do it on your property. There's no kind of working farm that could not get into this. Wineries are steps ahead of us in agritourism."
According to a study conducted in 2002, 62 million people visited a farm or winery that year. "And I'm sure since 2002 the number will be substantially more," she said.
People like to escape the hustle and bustle of the city and are interested to learn where their food comes from, she said. "It's a change to experience an almost forgotten world."
Eckert advised farmers to consider their neighbors as friendly cooperators, rather than competitors. By cooperating, farmers can attract more tourists to an area, generating more business for all. When there are more places to visit, tourists will stay longer, buy more products, and enjoy the experience more.
Eckert noted that in most instances, it's been the woman on the farm who has developed the agritourism side of the business and made it happen—with the notable exception of hunting and fishing ventures.
Before launching an agritourism business, there are several questions to ask yourself:
• Do you have the time to start a new business?
• Do you have the passion as well as the idea to start a new enterprise?
• Will it require skills you don't have and, if so, are you willing to take classes to learn them?
• Is someone else already doing what you want to do?
• What can you do differently to create a variety of experiences that will bring people to your region? Don't just copy. Be an innovator.
• What hours and days will the business be open? This is not a franchise business, so you can create the business hours you want. You don't need to be open seven days a week.
• Are you committed to the idea?
Commitment is important, Eckert emphasized. "I've been to places where they thought it was all about making money. Think about the time commitment and the amount of time it takes away from your family. When people just do it for the money, it never seems to go as well.
• What kind of commitment will you get from your family?
• Will everyone agree on the new business idea?
• Will your spouse allow you to start this new business?
• Can you count on back-up support?
• Who's going to look after the children?
• Who's going to be in charge?
• Are you going to do it yourself or hire employees? Eckert recommends doing it yourself at first. People you hire are not as invested in the project as you are.
• Have you ever managed people before?
• What are your income expectations?
• What's your financial comfort level?
• Are you willing to take some risks?
• How much time and energy are you willing to give to meet your financial goals?
Think about how you will set your pricing vis-à-vis the competition, Eckert urged. No one wins by competing on price. A better strategy is to compete on uniqueness, and the more unique the experience that you're offering, the higher the price can be.
On the cost side, the investment in the new venture can be lower if existing buildings and assets can be used. Cosmetic
fix-ups can be done fairly cheaply.
"Look at your property in a different way," she suggested. "Is there any building you can adapt?"
Creating the enterprise will require some financial investment. Some people are reluctant to make that investment, but Eckert said the risk might not be too high.
"I don't consider agritourism any more risky than growing a crop," she added. "In fact, less risky."