Land use change and on-farm diversification are two areas of interest for many farmers in recent times in relation to pressures that they are facing such as environmental regulations, inflation, and price volatility. One method of on-farm diversification that some are exploring is that of agritourism.
Emma Harvey completed her Kelloggs Rural Leadership Programme report in 2025 and looked at ‘Exploring the future of agritourism in New Zealand’. Her research sought to understand what opportunities lie in New Zealand agritourism in order to be able to provide information for farmers considering diversification with agritourism.
The research process
Emma’s research was based on semi-structured interviews with a range of current agritourism operators. Due to geographic constraints with in-person interviews, these operators were based in the Wairarapa. 2 interviews were also conducted with non-operators, these being people operating in the tourism space but were not farmers themselves.
Emma sought to understand:
- The drivers of diversifying into agritourism
- The challenges experienced in the agritourism sector
- The benefits the interviewee has experienced because of the addition of agritourism
- What factors operators deemed as important to ensure a successful agritourism business
Drivers of diversification into agritourism
Diversifying on-farm operations to include agritourism was driven by both financial and social factors.
The key financial drivers for diversifying into agritourism were:
- Cashflow
- Interviewees noted that the incorporation of agritourism improved cashflow – something that can be lacking in sheep and beef farming operations.
- Diversified income streams
- This was seen as important in order to reduce the reliance on commodity-based products. All participants identified their decisions to diversify being made on the back of financial factors such as financial downturn, poor product prices, high input costs, and rising inflation.
- Better economic utilisation of a resource
- Interviewees also noted the ability for agritourism to generate income from a block of land that was otherwise un-economic as a stand-alone farming operation. Limitations in improving financial performance from these areas on farm further drove interest in diversification as it was acknowledged that this was a better strategy than trying to make micro-gains in farm performance of uneconomic pieces of land.
The key social drivers for diversifying into agritourism were:
- Role creation
- There was a strong theme in the interviews that creating a role for the non-farming partner was a key driver in diversifying into agritourism. It was identified that this allowed people to look at how each of the people on the farm could contribute in a meaningful way to the farm business, and the adoption of agritourism often provided a career.
- Family
- Role creation for the non-farming partner was often tied to a desire to hold a role that was flexible enough to work around family commitments. Family values were strong for those who adopted agritourism, and their drivers for their operations were to ensure that those values could be lived out in their lifestyle.
- Bridging the rural/urban divide
- Many of the interviewees identified that many people today do not have a linkage back to farming. There was a strong desire to share the farming story with other people, and inviting tourists on farm provided a way for this to be achieved.
Challenges Associated with agritourism
A range of challenges were identified by the interviewees when it came to their agritourism businesses.
Operational
- Challenges in sourcing staff were a common challenge for interviewees, with most businesses being owner/operator businesses run by the wife of the farmer. This often meant that there was a high dependency on the owner/operator to carry out all operational roles, which created challenges when the owner was unable to carry out tasks on a certain day.
- Other operational challenges included balancing agritourism activities with farm activities, when those agritourism activities were ones that provided more direct contact with customers. One operator found that doing farm tours was too intensive and instead decided to find a better balance between farming and agritourism business.
- Other operational challenges included the impact of bad weather, health and safety, biosecurity, and access to rural infrastructure.
“The sheep and beef operation was already the core business and whatever we did next through diversification couldn’t impact on that core in a negative way or pull any resources from that business”
Skills/Knowledge Gap
- Interviewees identified that there were a range of challenges related to a lack of particular skills that are required to establish and operate an agritourism business. Most of this was around marketing, branding, and pricing – something that is taken care of by other parts of the value chain in farming businesses. Many preferred to outsource these parts of operations to those who were more skilled in that area.
- People skills were also very important due to managing tourists being very different to managing stock. Positive customer experience is pivotal, and really impacts on positive word of mouth. Some of those interviewed acknowledged that people skills were an area of challenge earlier on in their agritourism operations, but that confidence was something that increased over time.
Lack of leaderhisp within the industry
- Multiple interviewees identified that a major challenge is the lack of leadership in the agritourism sector. This manifests as a lack of unified direction for the sector itself, being further exacerbated by a lack of funding and a lack of resources. This also means that agritourism operators are operating in silos, however industry stakeholders such as the Agritourism NZ Group are doing work to educate, connect and empower agritourism operators.
Benefits of agritourism
- As a result of improved cashflow, diversified income, and better utilisation of resources, greater financial stability was experienced as well as a reduction in reliance on farming income.
- Financial stability allowed for business expansion. One interviewee had used their agritourism cashflow to purchase more areas of land, but it also allowed for business expansion to occur to a point where family succession was able to be a reality.
- Strong family values, and being able to uphold them, was clear in the drivers for agritourism. The flexibility of creating additional income through the farm and not having to work off farm, meant that it provides many benefits including flexibility for family commitments.
- Many spoke of the personal growth they have experienced from their diversification into agritourism. Personal skill development was clear, as well as confidence and the willingness to give something a go
- While community was not a clear driver diversifying into agritourism, it was clear that community was the most significant theme of benefits from agritourism in the research. The ability to give back to the community was often mentioned in the interviews about the benefits of agritourism, and this was achieved in ways such as role creation, employing locally, and being able to have a positive impact on the wider local economy.
- Increasing connection to rural life and food production was a driver for some of the interviewees, however, many have found that it is also a resulting benefit of their agritourism operations.
Keys to agritourism success
There is a need for a clear vision. Defining goals, target audience and allocating resources appropriately were all considered important.
Understanding the ‘why’ behind your diversification into agritourism was also seen as very important, especially to ensure that it is aligned with other values and lifestyle goals.
Having well documented systems and processes was also important so that other people could step in and take care of operations without it negatively impacting the business.
Research your market and create based on what they want, not what you think they need.
Set up the business in a way that is sustainable from a human resource perspective.
Diversifying into agritourism was a learning curve for many and they identified that it is important to either invest in developing the skills required yourself, or identifying your skills gaps and outsourcing as required, such as for social media.
Collaborating with local communities and tourism operators to enhance offerings was a common theme for success. Partnering with other local businesses to expand your offerings is one such way to do this.
Interviewees often used the words ‘authenticity’ and ‘unique’ in relation to success. Understanding what is special about your agritourism offering and how to market it effectively is really important.
Avoiding ‘cookie-cutter’ ventures by being unique and authentic was seen as important, as well as authentic connection with farmers themselves as customers value this.
It was also seen as important to engage with the local community to ensure that by attracting more tourists to the local community, that local residents or the environment will not experience any negative repercussions. Creating strong community relationships were crucial so that if issues did arise, they could be swiftly dealt with to prevent the loss of social licence to operate.