The Great Risks and Rewards of Agritourism

Pause for a moment and try to think of another specific profession or industry that prioritizes public education like agriculture. It took me a couple of minutes to come up with some good examples! To put a point on it, how many jobs want folks to “see how the sausage is made?”

Perhaps my bias is showing, but I believe agriculture stands high above others in this regard. Within the industry, extension services, trade groups, and even the private sector (like AgCredit!) regularly cranks out insightful material. Facing the public, agriculture has spawned a new sub-industry to bring guests out to its farms: agritourism.

Inviting the public to visit a farm carries a great benefit for agriculture and great risks for the individual family. Existing and emerging agritourism operations need to consider and implement protective measures for their farm.

 

Proper Legal Structures

Agriculture, by its nature, is a risky endeavor. Accidents regularly occur on farms, and agritourism presents a heightened risk because the public is now visiting that same farm.

Mitigating these risks for new or existing businesses through proper legal structuring is a great first step. If a couple is operating a u-pick apple business on their personal land, and operating as an informal partnership, that couple is one major accident or denied insurance claim away from losing their business AND land. 

Creating and properly operating a business entity can insulate the most important asset for farm families (land). Proper operation includes opening a separate bank account, filing a separate tax return, and completing lease payments. 

 

Liability Management

Proper lability insurance coverage is an essential component of an agritourism business. Not only does this include coverage amounts, but it also includes the right scope of coverage and riders. For example, if you are selling produce, meat, or cottage foods, a product liability rider may be required. 

Furthermore, Ohio law provides agritourism operators additional protections. If the proper signage is displayed, farmers can claim liability protection from certain accidents. Specifically, this is limited to “risks inherent” from being on a farm.

 

Relationship with Local Government and Neighbors

Of all the agritourism-related fields that I have encountered in my career, dealing with local government and unruly neighbors have been the most difficult. Enforcement of the law can vary from township to township, and some neighbors make life miserable for farm owners. NIMBY (not in my backyard) is a pervasive mindset. 

When dealing with government officials or neighbors, each fact pattern must be carefully analyzed to determine a course of action. However, confrontation, ignorance, or dismissiveness can be counterproductive. Instead, thoughtful, inquisitive, and honest communication can build equity that may be needed later. If a neighbor is harassing you because of a new venture, do not engage until they are prepared to communicate in a civil manner.

 

Business Continuity

Agritourism businesses build loyal followings in their communities. Be it flowers in the spring, pumpkins in the fall, or Christmas trees in the winter, hundreds or thousands of neighbors make annual visits to the same farms. 

For that reason, if a health or safety problem befalls an agritourism operator, a succession plan must be ready for implementation. This may include an estate plan, successor managers or officers to take over operations, or transfer on death provisions for land or businesses. Being prepared means formulating a plan, and formulating can ensure a family continues to receive those neighbors each year without interruption. 

Agritourism has given farmers a new and unique way to connect with their communities. These education opportunities build good will for an industry that depends on public trust. Even though agriculture benefits from those efforts, the farmers deal with direct threats to their homes and farms. Your professional team is there to help confront those threats so you can provide a rewarding experience for your farm guests.