Lesson 3.docx

**Lesson 3: The Organization of an Agritourist Farm** **Sustainable Development Goals:** SDG No. 4 -- Quality Education SDG No. 8 -- 8-Decent Work and Economic Growth SDG No. 9 -- Industry, Innovation and Infrastructure SDG No.11- Sustainable Cities and Communities **Learning Objectives** At...

**Lesson 3: The Organization of an Agritourist Farm** **Sustainable Development Goals:** SDG No. 4 -- Quality Education SDG No. 8 -- 8-Decent Work and Economic Growth SDG No. 9 -- Industry, Innovation and Infrastructure SDG No.11- Sustainable Cities and Communities **Learning Objectives** At the end of this lesson, student must be able to: 1\. Understand the economics of Agritourism and explain its uniqueness to appreciate its importance 2\. Evaluate the social and economic importance of Agritourism 3\. Familiarize and create a good judgement the regulations, activities, and the organization of each Agritourism businesses and differentiate the types of farms includes Agritourism Industry 4\. Distinguish and evaluate the products, services, and attractions of agritourism 5\. Explain the financing the activity of these farms that are involve in Agritourism. 6\. Create an in-depth understanding in the agritourist entities and enterprises, including agritourist farms, food industry enterprises, tourist and transport offices. ***Learning Materials*** *Objects, devices, tech gadgets, or real objects for content presentation or student activity\ * **Lesson Preview/Review** MCC Vision MCC Mission Overview: The different types of Agritourism Farms **Concept Notes/Teacher-Led Discussion** ***[Types and Definitions of Farms]*** A farm was a land property, comprising land together with buildings standing on it, designed generally to provide food for the family living on the farm. A farm was very closely related to the rural household. It was usually a multipurpose farm cultivating plants and breeding animals, as well as processing food. In the course of time these farms devel- oped, as a consequence of which different forms of farms appeared. A farm is sometimes defined differently; in extreme cases the term refers to a separate area of land on which agricultural production takes place. At present we may distinguish traditional farms, farms focused on plant production (crop farms), horticultural farms, orchard farms and animal breeding farms. These may also be divided in terms of the type and volume of production. A traditional farm is involved in plant and animal production and food processing. A family living on the farm usually owns it. A farm is a production entity in agriculture, equipped with the necessary factors of production: land, buildings and facilities. In Europe, Asia and Africa farms are mostly family farms. In North America a separate term is used, i.e. a ranch, which refers to a farm breeding beef cattle. Agricultural production run on the farm is frequently only one form of household activity. Farms frequently expand their operations to include other branches of economic activity. Here agritourist activity is an option Types of Farms **[The Agricultural Farm]** **The farm is a basic production enterprise in agriculture. It consists of an area of land and other means of production such as buildings, appliances and tools. It has resources of human labour and tractive force.** **The whole of its activity is managed by a farmer or farmers. What distinguishes the farm from other production units is the fact that the soil is the most important means of production and that it naturally reproduces a number of necessary means.** **Usually the farm produces plant and animal products, and sometimes it also possesses a food- processing plant. The farm may be owned by a farmer, it may be managed by a tenant or it may be part of a company, cooperative society or even association.** **In the farm two spheres can be distinguished. The technical-production sphere comprises the processing of some material goods into others. However, the transformation is dependent on biophysical constraints. The economic sphere specifies the production process with allowance for relations between prices and products as well as the financial value added during the production process.** **[The farm property ]** The land and means of production are the farm property. The property is the foundation from which production tasks are performed. The farm property com- ponents can be divided into fixed and variable assets. The fixed assets depreciate over time in numerous production processes and gradually lose their value in the production of new products and services. The variable assets are depleted in a single production process and lose their value in a single production process. In accounting practice, the division into fixed and variable assets is determined by individual regulations, which precisely specify into which group particular assets should be classified. Fixed assets include the following: equipment; Variable assets include materials, feed, fertilizers, fuel, young animals (piglets, calves, fattened cattle and pigs), cash and low-value livestock. **[Land ]** Farmland is limited in every country. The limitation results from the qualities of land, namely its spatial character, its immovability and the inability to create more land. These specific characteristics of land are important because the exist- ing land derives from a natural endowment plus the work of many generations in cutting forests, stumping, levelling, irrigating and draining. **[Production structure of the farm ]** The structure of a production organization may be very complicated -- we speak then of a traditional or multipurpose farm, or very simply we speak of a simplified or specialist farm. A traditional farm is one on which various plant or animal products as well as the products of the agricultural and food industry have been made for long periods. Usually the farms are oriented towards self-consumption of the products they have made. Specialist farms are those that have chosen one direction of production. They deliver large, homogeneous batches of products to the market. Diversified farms are those that have abandoned narrow specialization in order to avoid economic risk and run two or three directions of production on a high level. It is possible to distinguish activities within a farm. We can distinguish production activities, including crop production, livestock production, horticulture and market gardening, processing activities, service activities and general management activities. Because there is a large diversity of production activities, production activities can be separated into components. The production structure specifies the type of a farm. The farm may involve only commodity plant production (a cropping farm) or only animal production (dairy farm, pig farm, etc.). Farms may also be multipurpose. If a livestock farm is very large and involves cattle or sheep grazing, it is defined as a ranch. A farm may also deal with fruit production -- then we speak of an orchard. The knowledge of farm management is very wide. ***[Crop production ]*** The aim of crop production activity is producing plant products (fodder) for fur- ther processing on this farm and products ready to be sold to food enterprises, on the wholesale market, in a street market or in direct sales to the final con- sumer. Agricultural land plays the most important role on a farm; therefore we shall discuss its division and further describe it. It can be divided into: Crop production activity can be characterized in many ways. One common technique is to compare the structure of agricultural land use and its productivity in the main crop. ***[Livestock production activity ]*** The aim of this activity is to produce animal products for further processing or breeding animals for further reproduction. The fixed assets of the livestock production activity include the basic herd, buildings for livestock, structures, silos, manure disposal facilities and other equip- ment and means of transportation. The variable assets include other livestock and such materials as fodder, mineral additives, drugs, etc. The animal population is registered according to species and age groups, production groups and others. The population is documented with the actual current number of animals or average population of animals in the recent period. The average population is worked out on the basis of the animal register at the beginning and at the end of the period. Livestock productivity is expressed in the description of the activity. It is expressed by: The process of crop production and livestock production is very complicated. Farm management specialists deal with the integration of the technological and economic aspects of this process **[The Agritourist Farm ]** A farm that has introduced a new activity, agritourism, into its structure is called an agritourist farm. Besides crop and animal products the agritourist farm also provides agritourist products and services. Agricultural activities and the tourist activity can be independent of each other on a farm. In this situation there are no connections or flows between them. For example, a farm specializing in the production of cereals is situated in an attractive area and therefore it also provides services for tourists. The activities of a farm may also be interdependent; however, usually the agricultural activities are partially or completely subordinated to tourism; for example, tourists use the food produced on the farm. The extent of subordination of the agricultural activities to the agritourist activity can vary. In a 'purely' agricultural farm, 100% of the income comes from crop and animal production and from agricultural and food processing. On an agritourist farm, a certain part of the income comes from agritourism and the other part from agricultural production. Agricultural production may also be completely subordinated to agritourism and then 100% of the income comes from this activity. The index of the share of income from agritourism determines the importance of agritourism for the farm. The larger the part of the income that comes from agritourism, the more important it is for the farm. **[The Agricultural Farm vs the Agritourist Farm ]** A question arises as to whether there are any differences between the agricul- tural farm and the agritourist farm, and, if so, what are they? At the outset, it is necessary to emphasize that an agritourist farm must have a 'tourist' infrastructure that enables the reception of guests, whereas an agricultural farm, especially one specializing in crop production, does not even need to have dwelling houses because the farmer may live beyond the limits of the farm. Agricultural farms and agritourist farms differ in the rules of running and managing them and frequently also in the production structure. In particular, this concerns the use of the land, the intensity of production, the management of work resources and environmental protection. The aim of running agricultural farms is usually long-run maximization of profit by intensive management. In view of this fact, agricultural farms try to use as much land as possible for crop or livestock production, which guarantees the highest profit, whereas agritourist farms frequently exclude even large areas from this production and instead use them for extra structures, car parks, lawns and flower beds, which are supposed to beautify the agritourist space, and squares for sports or recreational activity. The principles of running agricultural farms are usually different and sometimes they even stand in opposition to the rules of running agritourist farms. For example, agricultural farms aim at specialization in production and concentrate on one or a few directions of production, whereas for agritourist farms varying the production structure is a better solution because they thus become more attractive to tourists. Agricultural farms aim at intensification of production, which consists in, for example, using high amounts of fertilizers and pesticides, concentrating high numbers of animals per hectare and their high yield. The limits of intensification are determined either by marginal analysis or by legal regulations that specify the maximum concentration of animals per hectare or the maximum amount of fertilizers to be spread. There are also farms that seek to maximize their income by organic production techniques. Such farms expect higher prices for their products. Agritourist farms usually aim for low levels of farming intensity or for organic production because these farming systems are more compatible with the needs of agritourism. On the other hand, agricultural farms usually aim at the introduction of tech- nological progress. In the last 50 years production technologies have changed radically. The aim of technical advance was maximization of work efficiency. Modern technologies of production in agriculture are not very attractive to tour- ists. They are almost identical in all countries of the world, not only in the highly developed countries but also more and more frequently in the poorer countries as well. Besides, modern technologies of production make it impossible for tour- ists to participate directly in the production process, because they require that qualified labour should be employed, especially to operate machines. Agritourist farms also have a different approach to the market for their prod- ucts. Modern markets are indispensable to conventional farms, whereas agritourist farms treat tourists as a serious market for their products. Hence the structure of crop and also even livestock production is at least partly subordinated to this approach. The relationship with the country and its community is also perceived differ- ently in these two types of farms. On agricultural farms, especially modern ones, production has a weaker and weaker relationship with the country and its com- munity. More and more frequently, the country is not a market for the farm and the farm does not provide employment for rural people. The relationship usually concerns cooperation with other agricultural farms (territorial integration) such as, for example, common use of more expensive agricultural machines or help with some specific work. The country and its architecture and community are a special attraction to tourists, especially if the country offers its local tradition, culture and dialect -- that is, everything that constitutes its individuality. There are multiple relationships between the country and agritourist farms, which enable them to develop and function better. ***[Relationships between the Agricultural and Tourist Activity in Agritourist Farms ]*** In view of the differences in the management practices of an agricultural farm and an agritourist farm a question arises: what is the relationship between the agricultural activities and the agritourist activity? There may be various types of relationships: complementary, supplementary, competitive and even antagonistic. A complementary relationship consists in the fact that both activities consti- tute a deliberate structural entity and an increase in the importance of the agri- tourist activity causes an increase of the agricultural activity and vice versa. If a farm receives more guests, it needs more agricultural products that could be used as food. Apart from the external possibilities of sales of agricultural products, a new ready market opens. Guests staying on a farm often buy even those products the farmer could not sell otherwise. This relationship may also work in the opposite direction. For example, if the farmer had a larger strawberry plantation where tourists could pick the fruit, he would have more guests. Agritourist products may also be competitive in relation to certain agricul- tural activities. Competition may concern the use of all resources of the farm, i.e. land, work and capital. For example, a farmer growing commodity crops intends to develop agritourist activity. For this purpose he has to exclude part of the area of land from agricultural production and use it for agritourism, or part of the finances he has been directing to crop production so far must be directed to agritourist investments. Besides, he has to direct part of the work to tourist service. There may also be an antagonistic relationship between the agricultural and agritourist activity, i.e. a situation in which one activity excludes the other. The most drastic example of antagonism between agritourism and agricultural pro- duction concerns integrated livestock production, especially pig herds. Agritourist activity near large pig, poultry or cattle farms is virtually excluded. Tourists usually do not accept this kind of production because of the offensive odour. All forms of agricultural production that are a source of unpleasant odours exclude agritourist activity. Poultry farms also are not a favourable element for the devel- opment of agritourism. However, on a multipurpose farm, where two or three pigs are kept, agritourists will accept them with pleasure. Also certain forms of crop production may not favour agritourism, especially those related to the use of pesticides. Agritourism may also exclude agricultural activity. In particular this concerns products that require strict limitation of access for veterinary and phytosanitary reasons. Agritourist products may also be competitive in relation to certain agricul- tural activities. Competition may concern the use of all resources of the farm, i.e. land, work and capital. For example, a farmer growing commodity crops intends to develop agritourist activity. For this purpose he has to exclude part of the area of land from agricultural production and use it for agritourism, or part of the finances he has been directing to crop production so far must be directed to agri- tourist investments. Besides, he has to direct part of the work to tourist service.  ***A comparison of the fundamental principles of management of agricultural farms and agritourist farms.*** ***[Common types of agritourism farms include:]*** 1\. **Farm Stays** - Visitors stay on a working farm as guests. 2\. **Farm-to-Table Experiences** - Involves dining on fresh, locally produced food. 3\. **Farm Tours** - Guided tours of the farm facilities and operations. 4\. **U-Pick Farms** - Visitors can pick fruits, vegetables, or other crops themselves. 5\. **Farm Markets** - Markets where farm products are sold directly to consumers. 6\. **Farm Festivals and Events** - Events such as harvest festivals, farm dinners, or workshops. 7\. **Farm Bed & Breakfasts** - Bed and breakfast accommodations provided on a farm. 8\. **Educational Farms** - Farms that offer educational programs on agriculture and farming practices. 9\. **Zoos and Animal Interaction Farms** - Farms offering opportunities for visitors to interact with animals. -- -- Prepared by: Reviewed by: Approved by: **PAULA MAE D. BRIONES, LPT, DBA Giezel S. Aquino JENNYFER N, MERZA, MBA** Instructor BSTM Program Head Dean, IHTM