Abstract
Agritourism is considered an effective strategy for revitalizing traditional agriculture, enhancing rural economics, and achieving sustainable livelihoods. While the processes of how the conventional agrarian industry has taken up diversified management and affiliated with the creative supply of tourist services remain unclear, the theoretical interpretations of the diversification processes have yet to be articulated. This study explores agritourism innovation and proposes a conceptual framework of agritourism diversification built upon the connotations of integration of production sectors and the multi-functionality of rural and land resources. Different styles of agritourism innovation detail the progress of agritourism diversification and how various functions of farm resources are initiated and capitalized upon. Results show that diversification through agritourism has brought considerable economic returns to farms, and increased their resilience in the face of possible business challenges.
1. Introduction
Agritourism, closely related to agriculture, emerges as a niche tourism product capable of boosting rural economies. Leveraging farms as both tourist products and destinations, farm tourism has become an appealing option for rural operators, situated in picturesque landscapes and ample resources to accommodate visitors with a diverse array of experience offerings (Barbieri and Mahoney, 2009). While prior research has focused on the economic aspects of the creative use of conventional agriculture resources, the results have highlighted a growing dependence on travel and recreation markets (Warnick, 2002). Su et al. (2019) emphasized the transformative integration of agriculture and tourism through which farmers have reshaped the approach to subsistence and have enhanced their resilience in adapting to evolving environments (Fullerton and Brouder, 2019). This global phenomenon with local differences in products reflecting the diversity of environments and varied opportunities results from differential access to market demands. The agritourism phenomenon dates back to at least the 1960s in the United Kingdom (cf. Burton and Wibberley, 1965), but it has proliferated. It becomes crucial to understand how conventional agricultural operations have diversified their activities to engage with and benefit from contemporary travel markets, thereby fostering the sustainability of the rural areas in which they are embedded (Palm and Lezzi, 2020; Wu, 2018).
Agritourism practices require and result from the diversification of farm management practices to provide recreational activities and experiences to visitors (Andersson et al., 2009). Page and Getz (1997), in line with many other researchers, have enumerated agritourism offerings, the majority of which involve the provision of accommodations, food and beverages (Domenico and Miller, 2012). Studies on rural tourism business (Nickerson et al., 2001), management strategies (Arru et al., 2019), and the benefits and challenges of agritourism (Sharpley and Vass, 2006; Sharpley, 2002), have provided rudimentary knowledge concerning farm diversification. However, the full scope of the innovations in agriculture and tourism, implicated in their novel integration, remained underexplored. When scrutinizing agritourism innovation, the focus often emphasizes product and process innovation, targeting new markets, and implementing organizational innovations to meet market demands and attract customers in the agritourism industry (Brooker and Joppe, 2014; Palmi and Lezzi, 2020). The innovation strategies, typically incremental and based on existing tangible and intangible resources, aim to create value for agritourism consumers. However, delivering innovative products or experiences frequently requires changes in processes and organizational structures. As a result, this transformative process inherently involves product and market diversification, enabling agritourism businesses to explore new avenues and cater to a broader range of consumer preferences and needs (Sharpley and Vass, 2006). Apart from crop production, farms host valuable natural and cultural functions related to harvesting, processing, and farming landscape, which together underpin rural lifestyles (Palmi and Lezzi, 2020). Such diversified functions can be leveraged to appeal to the interests of farm visitors. Thus, van der Ploeg and Roep (2003) advocate for incorporating the multiple functions of agriculture into agritourism as they may present novel and intriguing experiences for visitors. The provision of access to new experiences is an attribute of the novelty of the new agritourism enterprises. Multi-functionality, then, is important to the creation of agritourism supplies.
Agritourism innovation is a process of diversification from traditional agriculture into tourism businesses, which signifies industrial upgrading beyond a narrow focus upon agricultural production. Thus, successful agritourism innovation often embraces three types of sectoral operation that not only coexist but are interrelated: agricultural production, product processing, and the provision of tourist services (Montefrio and Sin, 2021). Analysis of how conventional agriculture is combined with tourist services and the involved creative strategies, can further understanding of the linkages among and restructuring of these activities which span the primary, secondary, and tertiary production sectors – the focal point of contemporary rural development. Accordingly, this research explores the agritourism innovation process through an examination of the industrial structure and supplies of rural enterprises to inform a theoretical perspective on farm diversification. The effects of such diversification on economic benefits and business resilience will also be investigated to shed light on the well-being of farming households and the sustainable management of their farms. Specifically, it explores business expansion and the adoption of multi-functionality as part of farm diversification strategies in agritourism enterprises. Within the subsequent sections, we review the context of resources and multi-functionality of agritourism and the development of farm diversification. The ultimate objective is to delve into the nuances of agritourism innovation and construct a conceptual framework that contributes to a comprehensive theoretical understanding of agritourism diversification, with empirical investigation centered in northeastern Taiwan.
2. Rural resources, agritourism, and multi-functionality
The natural resources and assets of rural areas have spawned opportunities for both traditional agricultural and rural travel, which enable urban people to get connected with nature and enhance their well-being. Currently, rural regions are transforming into places of pluralistic development. Traditional agriculture is thus diversified to establish novel, value-added rural supply chains, and the evolution has also led to the emergence of new participants across various economic sectors, including tourism, food processing and provision, nature conservation, holiday/second/vocational homesteads, as well as “New Agriculture,” encompassing organic and natural farming techniques (Wu, 2018). Among them, tourism has come to play a crucial role in the transition that is integrated with urban consumption patterns in far more diverse ways than ever before. Garrod et al. (2006), in their conceptualization, perceived rural resources as countryside capital, thereby offering a more holistic and integrated comprehension of rural tourism development. This perspective emphasizes the potential to enhance rural tourism possibilities and acknowledges the interdependent nature of various resources involved. In addition to landscape, the biodiversity, geology, rivers and lakes, woods and forests, air and water, historic buildings, rural settlements, market towns, conventional production, distinctive local customs and ways of life, etc., all make up the capital assets of the rural tourism industry (Garrod et al., 2006). Responding to evolving external factors and contemporary societal expectations of rural areas, such as green values, environmental conservation, pastoral landscapes, ambience, and rural recreation opportunities, tourism practitioners are actively crafting rural travel opportunities, trying to cater to tourists’ needs for food, lodging, shopping, sightseeing, heritage appreciation, transportation, recreation activities and more. (Streifeneder et al., 2022). For traditional farmers, the introduction of tourism has modified the management and essence of agricultural production, and a “new agriculture” with various novel functions and added values has come into being (Montefrio and Sin, 2021). The integration of tourist supply with traditional agriculture, a form of rural tourism, is an important diversification strategy adopted by farmers to enhance their income and economic efficiency (Barbieri et al., 2008).
Agritourism is a specific type of rural tourism and can be defined as “any practice developed on a working farm with the purpose of attracting visitors” (Barbieri and Mshenga, 2008: p. 168). Adamov et al. (2020) proposed that agritourism products have direct connections with agrarian environment, rural environment, agrarian products or agrarian living. Agritourism is distinguished by the fusion of traditional production and its distinctive life and culture (Palmi and Lezzi, 2020). For example, Su et al. (2019) explained how the production and consumption of tea is contextualized within a mixture of history, culture and environment, to provide tourists with unique and attractive experiences. Agritourism, when supported with creative tourist provisions, is not confined to on-farm production as is sometimes implied, although the nature of the farming system will influence tourism possibilities and the specific products that can be offered. More research is needed to explore and illustrate the nexus of agritourism innovation. This will be addressed through examination of the diversification involved in agritourism, combining farming production, the agrarian environment, and rural culture to create desirable travel experiences.
Many farmers have made great strides in activating the multi-functionality of rural resources so that crop production or animal husbandry is not the sole form of agricultural production. Agritourism is one important form taken to carry on farming innovative operations. Ohe (2007) described the activation of farm multi-functionality as internalizing the “potential external opportunities” that respond to tourists’ needs to experience an agrarian landscape, a simple socio-cultural atmosphere, a healthy diet, and address the issues of environmental conservation, global climate change, and sustainable development. Multi-functionality lies in the variety of functions and values attached to land, which extend beyond agricultural production and include environmental aesthetics, recreation opportunities, and the preservation of biodiversity (Barbieri and Valdivia, 2010). “Strong” multi-functionality is characterized by social, economic, cultural, moral, and environmental capital (Wilson, 2008) and has been deemed as the “desired status” because these capitals contribute to the sustainable management of farms. Barbieri and Valdivia (2010) emphasized the relationship between the recreational function of farmlands and agroforestry practices, signifying the transition to strong multi-functionality. Furthermore, Ohe (2007) conducted a study of the evolution of farm management in Hiroshima, Japan, and found that many new business opportunities were created through multi-functionality, and traditional farming operations had been transformed from a single focus on food production into diverse operations, including agritourism. Thus, a multi-functional viewpoint can be useful in the discussion of farm diversification.
3. Diversification of conventional rural industries into recreation and tourism
Diversification makes possible the transformation of traditional agricultural operations. Ilbery (1991) conceptualized farm diversification as adjusting or restructuring resources, like land, labor, or capital, to create novel, non-traditional, or non-agricultural products and services. In addition to tourism and recreation, Slee (1987) considered three other initiatives as the main options for farm diversification: agricultural products with added values, non-traditional agricultural enterprises, and the innovative use of farm buildings and other resources. Based on a survey of 2700 farms in England and Wales, McNally (2001) summarized agritourism diversification activities as follows: accommodation and catering, non-agricultural crafts and retailing, farm site rental, recreation, retailing of farm goods, and “pick your own,” etc. From a literature review of cases in North America, Barbieri et al. (2008) identified eight types of diversified enterprises: non-traditional farming, new marketing and distribution, tourism and recreation, farm facility and site rental, contracts and services, creation of added values to agricultural products, historic preservation, and interpretation, education and consulting services. In the context of farm diversification, agritourism often involves farm recreational activities, food and beverage sales, provision of commercial accommodations, retail sales of farm produce, and fruit and vegetable picking (Page and Getz, 1997). Farm diversification can be illustrated in many ways, which vary with the research settings and perspectives, and analyses of diversification through agritourism can illuminate how tourism services are coordinated with agricultural capitals to enhance the management of farms and farmers’ economic benefits.
Farm diversification occurs in many ways, as indicated above. Many of them focus on the supply of types of tourist services (Phillip et al., 2010), but not much has yet been written specifically from a business expansion perspective. Mahoney and Barbieri (2003) proposed the relevance of the concepts of vertical and horizontal expansions. Vertical expansion involves the creation of additional lines of business from the intermediate goods/services involved in existing production. Horizontal expansion, on the other hand, extends the scope and scale of operation by consolidating different types of enterprises. Their proposition suggests that the drivers of business expansion trigger the innovation of agritourism. In addition, Ohe’s (2007) longitudinal case study introduced industrial upgrading as another useful perspective through which to comprehend the evolution of farm diversification. He demonstrated that, from 1963 to 2001, the diversification of activities of farms in Hiroshima, Japan, went through four stages: produce processing (dried crops), farm interpretation (educational guiding and courses), tourist services (parking, landscaped gardens, accommodation, and recreational activities), and tourism marketing (farm branding as a tourist attraction). Industrial upgrading entails the pursuit of increasingly sophisticated practices by developing value-added processes, generating value-added products, or engaging in higher value-added activities (Azadegan and Wagner, 2011). Imamura (1996) highlighted the possibilities and benefits of industrial upgrades in farm diversification, such as the introduction of product processing and consumption services, in which integrations across different sectors of industrial operations can further create more diversified offers on the farms.
Both internal and external factors influence farm diversification (Bhatta and Ohe, 2020; Brandth and Haugen, 2011). The primary motivation for diversification is to achieve consistent financial returns, while capitalizing on multi-functionality and enhancing identity also serve as additional driving factors. (Barbieri and Valdivia, 2010; Roman et al., 2020). Researchers have examined the relationships between diversification and the characteristics of the farms/farmers (Barbieri and Mshenga, 2008; Ilbery, 1991), the scale of the farm, land size, variety of crops, farm resources (labor), the season of implementation, farmer’s age, education, household composition, farming experiences, etc. (Bhatta and Ohe, 2020). Taking a management perspective, McElwee and Bosworth (2010) explored the knowledge and techniques required for various types of diversification. Ohe (2007) documented the contextual environmental changes exerted on farm diversification through the internalization of external effects, such as urbanization, modernization, and environmental conservation, and the realization of multi-functionality. Internal factors, such as motivations, farm attributes, and managerial capabilities, as well as external factors are all likely to influence the farm diversification options that are implemented (Roman et al., 2020), and their relative importance is likely to be contingent, varying with the circumstance.
4. Methodology
4.1 Study site and subjects
To facilitate agricultural economic transformation and enhance livelihoods, the Taiwanese government has made significant endeavors to promote agritourism (known as leisure agriculture in Taiwan) since the 1990s. This initiative involves encouraging farmers to capitalize on the unique characteristics of agriculture and offer tourist experiences within rural settings. As of 2022, Taiwan boasts approximately 750 agritourism farms and 104 designated agritourism areas. In 2019, data from the Council of Agriculture of Taiwan revealed that a total of 27.8 million tourists engaged in agritourism activities, including 717 000 international visitors, contributing to an economic output of 10.9 billion N.T. dollars. Despite the challenges posed by the COVID-19 pandemic, agritourism still attracted around 25.86 million visitors in 2020, generating an output of approximately 10.2 billion N.T. dollars. (Council of Agriculture of Taiwan, 2020, 2021). It is evident that agritourism has become the key strategy of rural economic development in Taiwan.
This research targets agritourism businesses located in Yilan, a region in northeast Taiwan, focusing upon traditional farms that offer tourism and recreational services. The combination of a pristine natural environment, rural attributes, and proximity to urban areas has made Yilan county an early adopter and more prosperous front-runner in the agritourism development of Taiwan. As of 2020, Yilan was home to 14 designated agritourism areas and approximately 100 agritourism farms. The researcher first identified the potential rural/agritourism practitioners from the websites of the designated agritourism areas. Further contact was later made with local farmers’ associations to confirm the agritourism status of the subjects who currently provide agritourism experiences to visitors while remaining involved in agricultural production. A list of 96 agritourism farms was finally made.
4.2 Data collection methods
Mixed methods, including the compilation of secondary data, content analysis of marketing materials, in-depth interviews, and a farm owners’ survey, were used in 2019 to examine how farm diversification was developed into agritourism. First, to better understand the operation of these farms, secondary data were obtained from Taiwan’s Council of Agriculture and the Yilan County Government. Then, the marketing and media data concerning individual farms were collected, including their websites and introductory brochures. In-depth interviews were conducted with directors of the 14 designated agritourism areas to find out how diversification was implemented in their region, as expressed primarily in their points of view on business management, the industrial environment, and perceived influential factors. Finally, a structured questionnaire was given to agritourism farmers to clarify operators’ attitudes and how diversification works for them, followed by a face-to-face interview. A total of 96 farms was successfully recruited for the interviews, but nine eventually declined to participate, although their website data and brochures were still accessed and incorporated into the research.
Based upon the literature, the questionnaire consists of six sections: characteristics of the farm and farm owner (Barbieri and Valdivia, 2010; Sharpley and Vass, 2006), multi-functionality of farmland (Chen, 2012), implementation of farm diversification (Imamura, 1996; Page and Getz, 1997), internal and external factors influencing the development of farm diversification (built on the in-depth interviews with directors of designated agritourism areas), perceived economic benefits of diversification (Sharpley and Vass, 2006), and perceived effect of farm diversification on resilience (Fullerton and Brouder, 2019; Holling, 1973). Perceived economic benefits and resilience are considered as possible consequences of farm diversification. The concept of business resilience in this study is adopted from the definition provided by Holling (1973), and refers to the ability of an agritourism organization to maintain its identity and adapt its essential structure and function in the face of disturbance. Respondents were asked to rate each of the attributes on a five-point Likert scale, except for the characteristics of the farm and farm owners. The draft questionnaire was reviewed by three external experts, one senior farm owner, a director of the Leisure Farm Association, and a professor of tourism. Quantitative data were tabulated and qualitative data were used to interpret the quantitative results. To save space, lengthy quotations from interviews are not provided here. Correlation and regression analyses are used to examine the factors influencing agritourism diversification, benefits and resilience.
5. Results
First, the profile of farms was provided. Then innovative agritourism practices were examined from three perspectives: factors that influence diversification, diversification as revealed in the links between primary, secondary and tertiary production sectors, and the benefits of diversification. Diversification refers to the strategic expansion and broadening of a business’s offerings, typically involving the introduction of new products, services, or market segments. In the case of agritourism, diversification can involve adding new activities, attractions, or experiences to existing farms or agricultural operations. This expansion allows agritourism businesses to attract a wider range of visitors, tap into new markets, and mitigate risks associated with over-reliance on a single product or market.
5.1 Profile of subjects
The attributes of farms and farmers are described in Table 1. Most of the 87 agritourism farms have been in operation for a long time, with an average of 23 years. Almost half (46%) have been operating as agritourism farms for 21 years or more. The majority are not large in size, and almost all (92%) are family-run. All are engaged in primary production and tertiary production, i.e., the provision of tourist services. The farm land has been used to perform multiple functions. On average, 62.4% of the land is utilized for agricultural production, 24.4% for recreational uses, 18.6% for environmental conservation, and 13.5% for socio-cultural functions (such as living space, yards and folk worship area). Most of the agritourism businesses have previous farming experiences, and they are mostly fairly small, family-run enterprises, with multi-functional activities that extend beyond crop production.
Profile of farms.
Citation: International Food and Agribusiness Management Review 27, 3 (2024) ; 10.22434/ifamr2022.0167
5.2 Factors related to agritourism diversification
Diversification into tourism is influenced by the characteristics of farm operators and farm scale (Table 2), echoing previous research findings (Barbieri and Mshenga, 2008; Sharpley and Vass, 2006). Results by Pearson correlation analysis, show that agritourism operators with longer involvement in farming have less diverse operations than relative newcomers: those with at least 21 years of farming experience offer 3.81 tourist services on average, which is fewer than those with 20 years of experience or less, who provide an average of 4.95 types of services. What is more, the dynamic presentation of farm multi-functionality is important for understanding the extent of farm diversification. The more diversified the farm, unsurprisingly, the greater number of functions reported and this is achieved particularly by involvement in activities related to environmental conservation and its socio-cultural functions, highlighting values that extend beyond leisure and recreation. On the other hand, farm diversification is negatively related to the agricultural production function. This does not necessarily mean a decline in agricultural production; instead, it reflects a growth in the importance of other activities, which is common in the integrated process of “renovated” agriculture and the provision of tourist services.
Factors influencing the diversification of the farms
Citation: International Food and Agribusiness Management Review 27, 3 (2024) ; 10.22434/ifamr2022.0167
Furthermore, this study also finds the importance of both internal and external drivers to agritourism diversification. Those farm owners who are more sensitive to the changes in the industrial environment are more inclined to adopt the diversification strategies, as can be seen from the analysis of the two external managerial drives (trends of the consumer market and development of new technology), and two internal managerial drives (enhancement of resource utilization and opportunities for youth). The results from in-depth interviews reinforce the recognition of the significance of external factors, such as the attractiveness of rural travel to domestic and international tourist markets, more convenient access through newly constructed highways, and modern technologies that facilitate communication and information transmission (such as the use of Apps, QR codes, and AR) which have all contributed to the growth of the market, thereby opening up opportunities to invest in tourist-related expansion. While not fully supporting the findings of previous studies, such as that of McGehee and Kim (2004), we found that diversification is prompted less by the decline of traditional farming, such as through poor harvests or lack of labor, but more by the positive attitudes held towards farm operations and a desire to take full advantage of opportunities, such as making good use of farm resources to generate additional profits, create employment opportunities and draw young people back to the country.
5.3 Innovative practices of agritourism: A diversification perspective
Agritourism farms have made great progress with the introduction of tourist products of high added values gained from repurposing rural assets (Andersson et al., 2009). Industrial upgrading is the key expansion strategy. Unlike traditional agriculture, which relies on primary agricultural production and occasional secondary product processing for livelihoods, agritourism farms diversify by venturing into tourist services, effectively adding a tertiary production sector. But primary and secondary operations do not fade away; instead, they change their contribution. For instance, the produce/products from both primary and secondary industries become inputs into tertiary tourist services/activities. Our results show that three sectors of production act interdependently with each other in which various creative initiatives are put into operation simultaneously in a diversified way. Content analysis of farm websites reveals that more than 80 percent of the agritourism farms provide tourist products by combining primary and secondary production with recreational activities. Examples are tea plantations that offer tea-picking activities and pomelo farms engaged in pomelo processing that provide DIY (Do It Yourself) jam-making activities. Based on the integration of three sectors of production, we identify six styles of production integration: tertiary only, tertiary with primary, tertiary with secondary, tertiary with primary and secondary, triple production sectors with a focus on socio-cultural pursuits, and triple production sectors with a focus on environmental pursuits (Table 3).
Styles of production integration on agritourism farms
Citation: International Food and Agribusiness Management Review 27, 3 (2024) ; 10.22434/ifamr2022.0167
Capitalizing on the multi-functional nature of agricultural resources is another crucial innovation strategy for farms diversification. Farms in rural areas have access to many resources, such as land, natural environments, rural socio-cultural features, etc., which can be drawn upon to extend farmers’ livelihoods and cater to varied market needs at different times. Agritourism farms are revitalized by activating multiple functions like recreation, education, environmental conservation, and aesthetics, which enhance the value of resources and add economic benefits to the farm. Yilan has expanded its resource utilization beyond agricultural production and food processing to encompass natural ecology and traditional socio-cultural activities. The successful transformation into recreational opportunities effectively enhances the multi-functionality of that area. Table 4 summarizes the innovative operations of these agritourism farms, in which the interplay of farm resources and the multiple functions unlock potentials. For example, the outdoor educational programs provided by several agritourism farms have been incorporated into primary school curricula, helping the next generation to learn about the crops, their food and their own homeland. Historical barns have been renovated and transformed into farm tourist service centers, gaining popularity as attractive photo spots. Some farms provide environmental education and other training courses. Other examples include ecotours and mini-tours that are structured under the global themes of food safety and slow food, successfully promoting food education, food ingredients and localization.
Innovative strategies and multiple functions of agricultural resources
Citation: International Food and Agribusiness Management Review 27, 3 (2024) ; 10.22434/ifamr2022.0167
Finally, building up and maintaining agrarian values is the essence of agritourism production across various types of diversification. In this study, all the agritourism farms are still engaged in agricultural production, which gives further prominence to the link between tourist services and traditional farming and enriches the quintessence remaining in agritourism diversification management. Analysis of the farm websites and the survey of the farm operators revealed that these farms are fundamentally rooted in agriculture and upgraded with diversification, which sets them apart from other non-agricultural tourism suppliers in the rural areas. Agricultural produce/products and processed products, like locally dried fruits and rural cuisine prepared with local fresh specialties, account for most of the retail sales. In addition to general tourist services such as sightseeing, guided tours, and recreational activities, the agritourism experiences are mostly DIY activities on the farm. These activities often involve themes concerning farm production, product processing, and rural culture, promoting the appreciation of agrarian lifestyles.
5.4 The benefits of agritourism diversification
The research confirms survey respondents believe that farm diversification benefits the farm economy and enhances business resilience. Table 5 summarizes the perceived influences of diversification on farm economy and business resilience. Economic effectiveness is demonstrated in increased income and job opportunities. Diversification improves resilience as shown from how the farmers tackle external challenges and opportunities. Informants reported that their operational capacity increases, economic development in nearby areas is promoted, and the overall impression of the business and the public’s acceptance of tourism services experience positive enhancement. Finally, this study empirically analyzes business resilience and perceived economic effects upon agritourism development. Characteristics of farms and farmers are generally perceived as fundamental influences on farm’s decision makings (Sharpley and Vass, 2006) and diversification of agritourism (Ilbery, 1991) and are considered as independent variables. Perceived economic effects and business resilience are treated as the function of the farmer characteristics (age, education level, and farming experience), and farm characteristics (area of farm land and number of employees), and levels of agritourism diversification (number of agritourism programs) are specified as models (1) and (2). Two dependent variables, perceived economic effects and business resilience, are created by averaging relevant variables. Both models are estimated using ordinary least squares (OLS) regression and applying “enter method” to have the independent variables included. The results confirm that the level of agritourism diversification has a significant positive effect on perception of farm economy (
Citation: International Food and Agribusiness Management Review 27, 3 (2024) ; 10.22434/ifamr2022.0167
where
Influences of diversification on farm economy and resilience
Citation: International Food and Agribusiness Management Review 27, 3 (2024) ; 10.22434/ifamr2022.0167
Regression analysis of perceived economic effects and resilience.
Citation: International Food and Agribusiness Management Review 27, 3 (2024) ; 10.22434/ifamr2022.0167
The negative effects of farming experiences on perceived economic and resilience might result from the fact that agritourism farms with longer farming experience tending to engage in fewer diversification operations, which has been documented in Table 2.
6. Discussion
Agritourism is widely acknowledged as an effective strategy to enhance the economic performance of farms and establish a distinctive farm identity. The innovation of farm diversification for agritourism creates new opportunities and pathways for development (Andéhn and L’Espoir Decosta, 2021). While previous literature has identified various types of agritourism and emphasized their contributions to rural development (Streifeneder et al., 2022), further exploration of the diversification process remains necessary. Leveraging both tangible and intangible farm resources is crucial to meet the evolving demands of the market and deliver unique and exceptional experiences in the agritourism industry. Wu et al. (2016) have referred to this as “creative turn” in the conventional industry, where traditional production can be transformed through creative processes that repurpose resources and produce novel tourist experiences. In the context of agritourism, the diversification process typically begins with traditional agriculture, expands through applications of the multi-functionality of rural resources, and incorporates creative business operations, programming and presentations.
This study proposes that agritourism innovation is driven by two key factors: industrial upgrading and the multi-functionality of agricultural resources. At first, industrial upgrading forms the foundation and provides potential for the integration of the three sectors of farm production (primary, secondary, and tertiary). By integrating operations across different sectors, farms can generate more value-added products or services through business expansion (Azadegan and Wagner, 2011). Study results identify six types of production integrations on agritourism farms, including tertiary only, tertiary with primary, tertiary with secondary, tertiary with primary/secondary, triple production sector with social-cultural pursuits, and triple production sector with environmental pursuits. Secondly, the multi-functionality of agricultural resources, which stems from the diverse capacities of farms, yields all-embracing potentials for farm diversification. Barbieri and Valdivia (2010) have provided support for the close connection between the innovative practices of agritourism diversification and multi-functionality. Table 4 illustrates innovative strategies through the synergy between resources on the farms (agricultural production, agricultural processing, farm land, natural ecology, conventional culture and rural society) and their multiple functions (e.g., recreation, aesthetics, education, environmental conservation). As stated above, the revalorization of rural resources and their multi-functionality play a crucial role in driving agritourism innovation through diversification, which involves incorporating secondary and tertiary forms of production to complement primary production (Figure 1). This framework of industrial integration highlights the diversification through agritourism and proposes that the incorporation of innovative tourist services, including dining, lodging, shopping, and recreational activities, along with the establishment of new facilities, creative programming, marketing, and management, are proactive responses to external opportunities and pressures faced by the farms. These external factors include the evolving demands of the tourist market, shifts in macro environments, government regulations and global concerns surrounding sustainable development. This framework offers valuable insights into farm diversification by effectively illustrating how farms manipulate their multi-functionality and integrate various industrial sectors in response to both internal needs and external forces within the context of agritourism. This deliberate integration of tourism offerings with agricultural operations not only addresses the demands of the tourism market but also enables farms to navigate changing environmental, regulatory, and sustainability landscapes. Through this approach, farms in the agritourism sector embrace innovation, optimize their multi-functionality, and effectively respond to both internal and external dynamics, thereby contributing to their overall success and resilience.
Diversification through agritourism.
Citation: International Food and Agribusiness Management Review 27, 3 (2024) ; 10.22434/ifamr2022.0167
Recognizing the positive effect of diversification on the rural economy (McNally, 2001), this study also confirms that diversification operations can enhance the business resilience of farms. Looking ahead, it is evident that changes in the external environment will continue to affect farms and challenge the status quo. For example, the farm resilience has undergone a severe test during the global Covid-19 pandemic (Chin and Pehin Dato Musa, 2021), and climate change has also posted other threats that require preparation and responses. Only through the enhancement of resilience can sustainable development be attained. Our informants believe that diversification strengthens operational capability with resilience while facing internal or external challenges. Diversification results from and increases flexibility and adaptability contributing to the overall resilience of the farm business and enabling farmers to deal with the dynamics of the industrial environment more effectively in the booms and busts of the business cycle. By expanding their offerings and revenue streams, farms can mitigate the impact of market fluctuations and environmental challenges, thereby ensuring their long-term viability.
7. Conclusions, implications and limitations
7.1 Conclusions
Sustainable farm development lies in the continuous innovation and diversification into agritourism, a trend evidenced in the case studies. This strategic shift also leads to steady profitability and enhances farm resilience to counter external and internal challenges. In the development process, these agritourism farms meet the various demands of the modern world and ensure the growth of added values by demonstrating their creativity and putting rural resources into a variety of uses (Garrod et al., 2006; Hjalager, 1996). Focusing on innovative strategies to provide agritourism services, the research contributes to the agriculture and tourism fields by proposing a diversification framework of agritourism innovation, which is built upon the connotations of industry integration and the multi-functionality of rural and land resources. First, the concept of industrial upgrading and integration has been examined and then three different sectors (primary, secondary and tertiary) of production are merged to initiate and capitalize upon various functions of farm resources while meeting a variety of tourist demands. The integration across production sectors facilitates value-added creative activities and boosts farm profitability during the diversification process. Among them, the combination of traditional farming with tourism and recreation in farm operations is mostly demonstrated in experiential activities for or consumption by tourists, generating multiple benefits to the farm. Second, through diversification, different sectors of farm productions are coalesced to reinforce the multiple functions and create opportunities and added values. The farm functions, including farming, recreation, socio-cultural attributes, environment, and education, have mostly been evaluated separately in previous literature, but in agritourism these functions are further merged and interconnected. The various atypical agricultural functions, such as environmental education, local legends, rural aesthetics, green values, and sustainable actions, etc. can be creatively designed and diversified in agritourism innovation to achieve their maximum effects. The framework of industry integration adds important insights into existing knowledge of farm diversification by illustrating effectively the innovative manipulation of farm multi-functionality and its agritourism opportunities in response to internal needs and external challenges.
The research also points to the centrality of agricultural values in the operation of agritourism. Demonstration of the values of agricultural resources and the rural environment is key to carving out a niche market for agritourism as a form of special interest tourism. Adding the concept of the green economy to agriculture, farm diversification into tourism is embedded in people’s concern about and appreciation of rural land and culture (Liang, 2017; Ohe, 2018). Under the context of agritourism, farming produce and processed products are sold as a local specialty, as in the case of rural cuisine prepared from the farm’s seasonal ingredients, which become the signature food of the farm restaurant (Fanelli, 2019). Additionally, the lodging experience is enriched by rural surroundings and landscape, not to mention the warmth and kindness of the farm hosts, which contributes to the spirit of farm hospitality in serving niche products to tourists (Palmi and Lezzi, 2020). All in all, the recreational activities of agritourism bound up with farming production, lifestyle, and ecology have made available the chances for tourists to get close to the farm, agriculture, and nature. A great variety of activities and tours provided by the farms such as educational programs about the homeland for students, environment, and food (food safety and slow food), eco-tours, simple lifestyle, volunteer tours, working holidays, and pro-poor tourism, etc. have answered the call for the sustainable development of rural resources. This is also in line with researchers’ claim (Ammirato et al., 2020; Fullerton and Brouder, 2019) for the centrality of linking the sustainable development of rural areas with the essence of agriculture.
7.2 Applications, limitations and suggestions
To respond to various market demands and internal drives of farms, the innovation of agritourism is needed, and it should concentrate on the core value of agriculture, strengthening the integration of primary, secondary, and tertiary sectoral productions, and enriching the multi-functional use of rural and land resource. Regarding practical applications, the integration framework proposed in this study can be used instantly by agritourism farms, rural communities, regional organizations and policy makers to diagnose their agritourism provisions, and to generate more diversification opportunities and develop agritourism innovation strategies.
Lastly, some limitations and suggestions are proposed before the final remarks. In our study, a cross-sectional strategy was adopted to compare the diversification of different farms, which may not fully explain the variations in farm diversification in the timeline. With this in mind, a longitudinal approach may be a suitable solution to provide a clearer understanding of the development process of how farms can diversify into tourism. Moreover, the farms located in the designated agritourism areas of Yilan, Taiwan, were enlisted as the subjects of our empirical research. It is noted that most of the informants are family-owned SMEs. While the agritourism farms in Yilan are representatives of Taiwan’s agritourism farms in their historical background, considerable differences exist in their sociocultural and geographical characteristics from those of other areas or countries around the world. The diversification framework proposed in the study should, therefore, be further examined in other settings or conditions. In addition, we placed limits on the scope of innovation strategies considered, emphasizing production/service innovation, while Hjalager (2010) includes four other categories–process efficiency, management, marketing and institutional collaboration–in the themes of innovation in tourism. Thus, more research on different aspects of innovation strategies is required to reinforce the integrity of our innovation conceptualization. We also did not include off-farm opportunities in our study. More broadly, many tourist businesses in rural areas are not directly related to agrarian values or traditional agriculture, such as the operation of guesthouses, restaurants, specialty shops, or travel companies. Yet the operation of such businesses may draw upon the rural environment in which they are located, and may impose considerable influences on the development and characteristics of rural areas. More research on different rural tourism businesses will benefit this line of conceptualization. Furthermore, this study employed an Ordinary Least Squares (OLS) regression model to examine the potential effects of agritourism diversification on perceived economic benefits and business resilience among farmers. While the model results are reasonable, they fall short of being ideal. To enhance our understanding of the models related to perceived economic benefits and business resilience, additional explanatory attributes, such as financial capital and social capital, can be incorporated, and more detailed regression models can be employed.
Acknowledgements
This research was funded in part by a research grant (MOST 106-2410-H-259-044) from the Ministry of Science and Technology, R.O.C. in Taiwan. This study would not have been possible without the support of panelists who devoted the time necessary to provide thoughtful responses to each round of this study. Authors’ contributions: Tsung-chiung (Emily) Wu: conceptualization, methodology, supervision, data curation, formal analysis, investigation, writing (original draft). Chiu-Pin Chen: project administration, data curation, validation, writing (review). Alex Yang-chan Hsu: validation, writing (review) and editing. Geoffrey Wall: validation, writing (review) and editing.
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