Agritourism business requires risk management

Bruce Schultz, Benedict, Linda F.  |  11/17/2016 8:58:49 PM

(11/09/16) CROWLEY, La. – Starting an agritourism business can be a profitable enterprise, but it also carries liability risks that can be managed.

That was the message at the LSU AgCenter agritourism workshop held on Nov. 8 at the AgCenter H. Rouse Caffey Rice Research Station.

Another workshop will be held at 9 a.m. on Nov. 10 at the LSU AgCenter Red River Research Station at 262 Research Station Drive, Bossier City.

Louisiana law limits liability exposure for farmland owners, said René Simon, director of marketing and agricultural economic development with the Louisiana Department of Agriculture and Forestry.

Farmers are facing low commodity prices, and agritourism is a way to make extra money. “Our farmers need to make every dollar they can,” Simon said.

Louisiana had 361 agritourism businesses in 2012, up by 191 from 2007, said LSU AgCenter agritourism coordinator Dora Ann Hatch. The average sales jumped from $2,500 in 2007 to roughly $9,000 in 2012, she said.

Agritourism includes hunting and fishing on agricultural land as well as such attractions as a pumpkin patch, a corn maze and a fruit orchard.

“This is a great place for agritourism,” Hatch said.

“Agritourism operators need to assess financial and legal risk as well as production, marketing and human risk,” said Maria Bampasidou, assistant professor in the LSU AgCenter Department of Agricultural Economics and Agribusiness. “Identifying risk and learning how to manage it properly can differentiate a successful agribusiness operation.”

Hatch gave details on becoming certified in Louisiana as an agritourism business. Randall Whitehead, field underwriting manager with Louisiana Farm Bureau Insurance, explained how landowners can protect themselves with the proper insurance coverage.

An example detailed at the workshop is the annual Yellow Rails and Rice Festival held in Jefferson Davis Parish in the Thornwell community. Birdwatchers attend the festival for the chance to see the elusive yellow rail, a small bird that hides in rice fields.

This year’s festival, which was held last week, drew birders from 27 states, Australia and two Canadian provinces said farmer Kevin Berken, an organizer of the festival.

He said he enjoys the interactions with the birdwatchers who ride on his combine during rice harvest.

“It’s a great opportunity to tell them about the Louisiana rice industry and educate them about the environmental benefits of rice and wildlife habitat,” Berken said.

Attorney Rusty Rumley with the National Agricultural Law Center said corporations can be formed to protect agritourism business owners, but he cautioned against using an internet legal service to establish a corporation in Louisiana because of the complexity of the state’s civil code. “I would be terrified to use that in Louisiana,” Rumley said.

Separate insurance policies are needed for an agritourism venture and a general farm operation, he said.

The most dangerous agritourism business is a petting zoo because it exposes children to E. coli bacteria, but liability insurance is available for those attractions Rumley said. At least one death a year in the U.S. is attributed to petting zoos, he said.

This workshop series is funded through a grant from U.S. Department of Agriculture-National Institute of Food and Agriculture via the Southern Risk Management Education Center. The second part of the workshop, scheduled for the spring of 2017, will address safety and emergency management.

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