Should British Columbia’s Agricultural Land Commission broaden its definition of “agritourism” in order to allow more businesses on farmland in the Agricultural Land Reserve?
Written by Brock McLeod
for the North Cowichan Agricultural Advisory Committee in 2014
Note from Heather McLeod, the author’s wife: Brock was a full-time vegetable farmer in the Cowichan Valley from 2008-2015. Brock researched and wrote this discussion paper as a member of the North Cowichan Agricultural Advisory Committee in 2014. At the time, the committee was discussing whether to support a broadened definition of “agritourism.” This paper does not necessarily represent the views of that committee: indeed, some members of the committee strongly disagreed with points made in this paper.
Brock was diagnosed with stage 4 kidney cancer in 2015, and died in September of 2017. I am sharing this paper in his memory. He would have wanted to be part of any discussion on the Agricultural Land Commission and the Agricultural Land Reserve.
The following is Brock’s original paper, with the exception that I’ve replaced the names of two Cowichan businesses that are still operating with generic names (“Bakery X”). Brock meant no harm or disservice to them by including them in his original paper.
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What is Agritourism?
As we are discussing whether to expand the definition of agritourism, I think we need to define what agritourism currently looks like and, then, what it may look like after expansion.
Current definition of agritourism
According to the ALR’s policy paper #4, something is considered agritourism “if the use is temporary and seasonal, and promotes or markets farm products grown, raised or processed on the farm.”
Agritourism, then, is essentially a temporary and seasonally-related form of marketing to increase the likelihood that people will buy your farm products (increase sales) or the value they place on them (increase prices) by using an experience at the farm to draw people in and help them appreciate your product.
A farmer that grows lots of cabbage, for instance, could have a weekend (“temporary”) harvest festival in the fall (“seasonal”) where they invite people to their farm to participate in a number of cabbage-related activities, such as workshops on how to make sauerkraut, workshops on how to make cabbage rolls (in which they learn which type of cabbage are best for rolls), nutrition talks about the health benefits of cabbage and the best ways to cook it to unlock the most nutrients, and a photo shoot for little babies to get their Anne Geddes-like baby photo.
The point of this type of agritourism is not to make money from the festival workshops and events themselves (though there may be some of this income), but from the increased sales of cabbage (“promote or market farm products grown on the farm”). That is, through celebration and education, people are now more inclined to purchase cabbage, and purchase your farm’s cabbage (as opposed to imported cabbage), increasing sales and profitability of your farm now and in the future. And if you invite other farms to participate, say a beef farmer whose hamburger would be perfect in cabbage rolls, the benefits can extend to the farming community in general. As the festival becomes well-known, much as the Salt Spring Island Apple Festival has, it can be a draw for people from all over Vancouver Island and even further, bringing in tourism dollars to the broader community.
Expanded definition of agritourism
So, what would expanding the definition of agritourism look like?
Using examples from the Cowichan Valley, such as cafes, bakeries, restaurants and wedding venues, an expanded definition of agritourism would mean putting businesses that can benefit from tourism on farmland. That is, using people’s idyllic associations of farmland (the farm setting, or destination) to increase their patronage of particular bakeries, cafes, restaurants, or wedding venues. The assumption being that a bakery or restaurant located on a farm in Chemainus, for example, would be more desirable to visit than a bakery or restaurant located on a downtown street in Chemainus, increasing the total revenues or profits of bakeries in the Valley. Amuse restaurant relocating from downtown Shawnigan Lake to Unsworth Vineyards is a good example of this.
So, how is this different from current agritourism?
First, these uses are generally not temporary, nor seasonally-related. Restaurants, bakeries and wedding venues operate year-round or near year-round, and while their menus may change with the seasons, the business does not come and go with the harvest period of wheat or apples, or the ripening of pumpkins for the seasonal holiday Halloween.
Second, the primary purpose of these agritourism activities is not to market or promote the farm’s agricultural products (though it should be a secondary purpose). Rather, it is to offer a bakery experience or wedding venue in an idyllic setting. For example, “Bakery X” does not operate a bakery to promote the purchase, directly or indirectly, of wheat or eggs from their farm. If people go to Bakery X and buy loaves of bread that happen to not contain any of the farm’s ingredients, this is still a success for the bakery. But if people go to a cabbage festival and don’t end up buying any cabbage, that is a failure of the festival.
In short, current agritourism means using temporary, seasonally themed events or experiences to bring people to your farm and increase their likelihood of purchasing your agricultural products, now and in the future. It is a form of marketing. The Saltspring Island Apple Festival may be a good example of this, as mentioned.
On the other hand, expanded agritourism means locating year-round, non-seasonally based businesses in an idyllic setting (farmland) in order to increase visits and sales to these businesses. By stipulating that these businesses must purchase some of their inputs from the farm on which they are located, or other farms in the Valley, we can use these businesses to increase the market for local agricultural products. While expanded agritourism does not directly promote the farm’s or Valley’s agricultural products, it can indirectly increase such sales.
So, if both current and expanded versions of agritourism result in increased sales of a farm’s and the Valley’s agricultural products, why the heck would we not embrace as broad of a definition as possible? There are good reasons to be cautious. But before we turn to those, let’s consider the primary benefits of an expanded definition of agritourism.
Benefits of expanding the definition of agritourism
There are three primary benefits of expanding agritourism: one benefiting the broader community, one benefiting the farmland owner and one benefiting the farm business itself.
Benefits to the broader community
By increasing the number of agritourism attractions in the Cowichan Valley, there will be more to attract visitors to the Cowichan Valley for tourism in general, increasing spending at at other businesses in the Valley, such as hotels, sea kayaking companies and downtown restaurants. This is good for jobs, for tax revenue and for small businesses, not to mention for locals who can now enjoy patronizing these businesses.
Benefits to the farmland owner
Tourism businesses on the farm (bakeries, restaurants, wedding event centres) provide another source of income on the farm, typically a better income than farming would provide, helping the owners make enough income to stay on the land (and potentially subsidize their farming operation). It is like having a spouse work off-farm to earn an income to help pay the mortgage.
Benefits to the farm business
The agritourism businesses on a farm can purchase agricultural products from the farm (or at least this should be a requirement), providing a good market for the farm’s output, increasing the viability of that farm, and leading to increased production and use of farmland.
Drawbacks of expanding the definition of agritourism
Now, let us consider the potential negative impacts of an expanded definition of agritourism.
Expanding agritourism leads to higher land prices and fewer undeveloped parcels
As with the benefits from agritourism expansion, there are both non-farm drawbacks and farm drawbacks to consider.
The major drawbacks from a farm perspective are that prices for agricultural land, with or without agritourism businesses on them, will be more expensive than they otherwise would be. When Heather and I started looking for farmland, we originally looked in the Victoria/Saanich region, where we were living at the time. We chose Duncan in part because we couldn’t afford Victoria. The higher farmland prices rise, the more it will push new farmers to other communities or provinces to look for farmland. These price increases affect not only prospective farmers who don’t yet have land, but also existing farmers who are looking to expand their operations. The more expensive land becomes, the harder it is for your community’s small and medium-sized operations to lease or purchase larger farms to expand onto, throttling the type of growth in farm operations that you would want to see in your community and that is often necessary for farms to remain economically viable.
This effect is even worse when prospective properties have agritourism operations on them. Consider what it would cost to purchase “Cidery X’s” property today compared with what it would cost without a restaurant, distillery, spa, etc. Essentially, we are transforming properties that may be in reach of people with some savings or good jobs into properties that are only available to the already wealthy, because instead of needing to pay for expensive land, they now need to buy expensive infrastructure or businesses on that land as well. Even though the economic revenues from these properties may now be greater, thereby helping generate the income to pay for such a mortgage, it puts all of these properties out of the reach of less-capitalized buyers.
And it is not only the increased prices that will hurt new and expanding farms, it is the fact that there will simply be fewer pieces of undeveloped agricultural land left. For if successful, the expansion of agritourism will mean that many properties will be housing bakeries and wedding event centres. So when a dairy farmer, for example, goes looking to lease or buy an additional 40 acres, there is likely to be far fewer bare pieces of land available nearby, even if they are able to afford the increased prices.
If farmland in the Cowichan Valley were cheap to start with, like in Manitoba or other rural prairie regions, it wouldn’t be a big deal to have a rise in farmland prices. But given that the high cost of farmland is already one of the challenges of making a living from farming and growing a farm operation in the Valley, it is a particular detriment here.
Expanding agritourism can lead to conflict between agritourism operators and farmers
Another drawback of expanded agritourism is the potential for conflicts between farming activities and agritourism activities. Let us return to our dairy farm that now has many more agritourism operations in the neighbourhood than before. If some of these agritourism operations consist of people sitting on nice outdoor patios enjoying premium food and drink or celebrating a wedding on a warm summer evening, how are they going to feel when the dairy farmer is spraying liquid manure on their fields, or operating their noisy machinery until 11pm in order to get the crop off before the rains come? We have had friends visit our farm on evenings when the neighbouring dairy farmers spread their manure and they refused to sit outside with us. Over time, this will lead to increasing pressure on farmers to restrict these types of activities.
Expanding agritourism will likely result in more good soil being built on
The infrastructure required for most agritourism operations is also a drawback. Land was reserved in the ALR because it has better soils for growing crops than other lands, such as gravelly or mountainous lands. While there may be rules for where to site agritourism infrastructure to limit its impact on good soil, some good soil will no doubt be lost, if not from buildings then from driveways and parking lots. Or, once the unsuitable farmland has been covered with agritourism infrastructure, where does the farmer put her new barn or farm staff accommodation? Over time, these types of structures will end up encroaching on good soil, reducing what is already a very limited farmland base in the Cowichan Valley.
Expanding agritourism will lead to more enforcement issues
A policy drawback is the difficulty of enforcing restrictions on agritourism operations. How will we tell if a farmer is following a rule that says at least 50% of the product served at their on-farm restaurant must come from the farm itself or Valley farmers? In the absence of good enforcement, the dishonest prosper at the expense of the honest, creating an unlevel playing field.
Expanding agritourism may create an uneven playing field and lost tax revenue
Two potential non-farm drawbacks include the impact on businesses, such as bakeries, that aren’t located on farmland and the impact on municipal tax revenues if agritourism operators are successful in lobbying for farm tax status on their agritourism facilities. In the case of bakeries and other businesses downtown or elsewhere who are paying commercial property lease rates and taxes, we are setting up an uneven playing field which could drive such businesses out of town and onto farms or have them simply go out of business.
This leads to the second issue, which is decreased tax revenue from such businesses if we simply shift this business onto lower-taxed rural properties.
So where does this leave us?
Weighing the benefits against the drawbacks
There are both benefits and drawbacks of any policy. The questions then become, do the benefits outweigh the drawbacks, are we actually achieving the goals we are hoping for from this policy and are there any better ways to achieve our goals that have more benefits, fewer drawbacks, fewer implementation issues or some combination of these.
Let’s look at a few people this policy might impact to help sort out the balance of positives and negatives.
The benefits accrue to current owners of farmland, to the detriment of others
Increased farmland prices are not all bad. They do benefit farmers who already own farmland, from increasing their property values, which is a good thing in itself, to increasing their borrowing capacity, which can help fund investments in the farming operation. It also, of course, helps those who own farmland but don’t necessarily farm, such as those who just like to have a home on a big property in the country, of whom we have many in the Valley.
The downside of this, of course, is that people looking to get into farming by purchasing land or existing farmers expanding their operations will now need to pay extra to these non-farmers. So a good portion of the benefits from this policy will go to non-farmer landowners, while the detriments are going to those looking to get into farming in the first place, go from leasing to owning farmland or expand their farming operations to more or larger parcels. That is, this policy will financially reward people who live on farmland but don’t actually farm, and penalize those who would like to farm, but don’t yet own the land or don’t yet own enough land. This is unfortunate and part of a larger problem with the ALR in general, which I will touch on briefly in a subsequent section. This problem will arise in other ways as well, such as permitting non-farmer landowners to operate a restaurant on farmland and simply buy food from a farmer they are leasing the rest of their land to, or from other farmers, depending on what the requirement happens to be for agritourism operations. The intent of agricultural policy should be to help farmers, regardless of whether they own farmland, as opposed to helping farmland owners, regardless of whether they are farmers. A policy to expand the definition of “agritourism” will get this backwards.
The rich get richer and the poor get poorer
(well not exactly, but it makes a sexy heading)
The policy is also lopsided with respect to its impacts on the younger versus the older and the wealthier versus the less wealthy. The people who are able to best take advantage of this new policy environment will be those with strong financial resources and experience (such as skills from a previous career or business ownership). These people tend to be older and wealthier. The people least able to take advantage will be the younger and less wealthy. Given that farming is already relatively difficult to get started in, it is particularly undesirable that this policy strengthens the position of those already in the game, or wealthier, rather than those who wish to get a start, or are of more modest means. While I don’t agree with many in our community that seem to believe anyone should be able to start a farm despite not having any previous experience or assets, I do believe we should not needlessly make it harder through policy under our control.
Does it strengthen or weaken the ALR?
Turning now from its balance of impacts on various people, let’s look at its impact on the ALR itself. There are two main objectives or benefits of the ALR system. First, it keeps good land capable of agricultural production free for agriculture, rather than being developed into subdivisions and strip malls, regardless of what the land’s price is. The second thing the ALR does is artificially reduce the price of land, keeping it from being even more expensive than it already is (it could be doing a better job of this). Spin-off effects from having so much land in the ALR together is that it creates zones where the often smelly, messy, noisy business of agriculture can take place without affecting residential households.
So if we are lobbying for a change to the ALR rules, it makes sense to look at how the policy would impact these fundamental aspects of the ALR. As discussed in the drawbacks section, expanded agritourism would put more pressure to build stuff on or cover good soil, going against the ALR’s intent of keeping good soil free. Additionally, it would put upward pressure on farmland prices, which are already high in B.C., again undermining the benefits of the ALR system. Finally, by increasing the number of agritourism operations dotting the farm landscape, you reduce the zoned area that is protected from residential/agricultural conflicts by bringing the exact types of businesses into these zones that are most likely to conflict with farm smells and noises. In short, regardless of this policy proposal’s impacts on farmers, it undermines the fundamental benefits of the ALR system. Compare this with, say, a policy to promote “Buy B.C.” in grocery stores. This policy would not have the same negative impacts on the ALR, but would have benefits to farmers.
Are there alternative policy options that would help farmers make better livings?
On that note, let us turn our attention to whether there are other good options to help farmers if we decide we are not entirely satisfied with the expanded agritourism approach. If there aren’t a lot of options, we may be more inclined to take a chance on a policy that has drawbacks as well as benefits. But if there are other good options with fewer drawbacks or more benefits, it may be worth trying them first.
A particular drawback in moving ahead with an expanded agritourism approach is that many of the harms are not easily undone. Once agritourism operations are built on farmland, they won’t be torn down with a policy change. Contrast this with what happens when a government decides to stop funding a “buy local” campaign and how easy it would be to cease that policy.
First, then, let us look at what a good policy should do. While good policy may do more than the following, I think that a good policy should at least have the goal of making it more likely that farmers will be able to earn a good living as farmers. Which begs the question: what is currently standing in the way of this being the case? I believe there are two or three main problems, which are interrelated. Costs are higher, demand at the prices B.C. farmers have to charge is low, and agricultural markets have changed faster than many farmers have been able to keep up with.
Major challenges to farming being viable
First, costs are higher in B.C. than elsewhere, with land prices being one of the largest differences between our province and elsewhere, despite the ALR artificially reducing prices. If anything, efforts to help farmers on this front would be to reduce the cost of land, not increase it. Despite being reserved for farming, many farms in B.C. are used as large rural estates by residential buyers, rather than farmers. Policies that decrease these uses would help free up land for leasing and make farmland more affordable. The tricky part, of course, is the negative impact this would have on the property values of existing farmer landholders. I should note, however, that in its stakeholder tour, the Agricultural Land Commission reported the following: “During the stakeholder consultation process it was generally viewed that the minimum qualification for BC Assessment “Farm Status” is too low a threshold.” This implies that farmers recognize and want change to minimize non-farm ownership and use of farmland, which would have a downward impact on prices.
Second, demand at the prices B.C. farmers need to charge is not high enough. B.C farmers are competing against cheap imports and there aren’t enough people, yet, willing to pay more for a local product. This is particularly evident when you compare the supply-managed sectors with their non-managed counterparts, for there is essentially compulsory demand for B.C. milk and eggs and chicken at prices high enough for a good portion of these farmers to make a living. Consequently, these sectors thrive and have some very savvy farmers operating in them. While I am not personally in favour of expanding supply management to other agricultural sectors, it is a policy option and provides a good illustration of the negative impact that low prices/higher costs has for B.C. farmers. The other thing to note is that the market is changing here. More people are choosing to pay a premium for local products. While there are not as many of these customers as people make it out to be, this trend is likely to continue for some time, increasing the viability of agriculture without any intervention by governments (though they do like to jump on the bandwagon with their own programs).
This leads to the final problem with profitability. The marketplace is constantly changing and our farmers are not as up-to-speed as they could be. The number of farms that sell directly to the public that still don’t have websites continually shocks me and Heather. As the technology has changed and the way people buy food has changed, farmers haven’t always kept pace. But this is changing too. Many new farmers starting out come into the business with more technology and marketing savvy than their parents’ generation. Governments and industry bodies are also working to improve the skills of farmers in this area, from online webinars to sponsoring and funding workshops to traceability initiatives. B.C. farmers are going to be stronger in this area in the future than they are now.
So if those are some of the problems, what are some solutions?
How to deal with the challenges facing farmers without expanding agritourism
A combination of increased demand and prices is always good for farmers. Governments are currently funding “buy local” programs and non-profit and other individuals and bodies are continually working to increase local purchasing, such as the “buy local” map, the “ten percent shift” movement and our new regional visitor centre. Continued efforts in this regard help lift all boats, have few if any downsides from a farming perspective if the money is well spent (the downside is to the taxpayer), and can be easily stopped if it is found ineffective or harmful.
Another way to increase demand similar to the agritourism proposal on the table, but that avoids the impact on farmland, is to give a tax break to existing businesses in Cowichan that purchase at least 50% of their products from local farmers, much as North Cowichan has a tax-relief incentive in place for new industrial users. This way, rather than subsidizing these businesses by allowing them to locate on lower-taxed farmland, you subsidize them by bringing the lower taxes to them. Again, the taxpayer gets hurt here, but the ALR doesn’t. If you reduced taxes the more a business bought from local farmers, you could have businesses, such as restaurants, working hard to have a local, seasonal menu. There are many other ideas that we could come up with to increase demand, but I hope this suffices to show that there are other options.
We in the Cowichan Valley are also in the fortunate position of farming in a growing community.
According to Statistics Canada data, the population of the Valley has increased over 50% in the past 25 years and is likely to increase that much again in the next 25. Not only are we growing, but we are growing in the right demographics. Wealthy people are moving to our communities, people later in years who have their life savings and pensions to spend are moving here as well as people who care about high quality or sustainably produced food. So we’re not only getting people who have greater capacity to pay higher prices, but also people who put greater value on quality food. This is true not only of Cowichan, but also of the other nearby markets for Cowichan agricultural products, such as Victoria and the lower mainland. One sound policy may, in fact, simply be patience.
Other policy solutions could address high land prices and the unwillingness of non-farming landholders to enter into long-term leases with farmers. As mentioned previously, some farmers expressed their dissatisfaction with how easy it is to get farm tax status. This is a policy area in serious need of attention. Everyone knows people who own farmland that find creative ways to get their farm status without really being farmers because the revenue threshold for many properties, $2500, is ridiculously low. This needs to change. If we’re going to lobby for things outside of North Cowichan Council’s control, I think this would pay as good of dividends for farmers as an expansion of agritourism and need not have any downsides for the viability of farming (though it would negatively impact a farmer’s net worth, if property values declined as a result). Combine higher thresholds for getting farm tax status with a better policy framework or requirements to lease out your land for longer periods of time if you are failing to meet farm status, and you could really increase the availability and affordability of farmland, particularly for the groups that have the most difficulty accessing farmland, such as young farmers.
There are other restrictions that could be introduced to help keep a lid on escalating farmland prices, but many would be particularly unpopular, which would make it hard for politicians to implement, such as limits on house sizes and removing most horse-related activities from the definition of farming.
The last area for policy attention would be helping farmers shift towards marketing their products better to get higher prices, such as having better websites or social media presences. As mentioned, governments, particularly the federal government, are working hard on this already. And the next generation of farmers coming along is much better versed in these technologies and approaches than previous generations. Again, a combination of current policy and patience will almost certainly result in greater farming success without further changes.
All right, we have covered a lot of ground. Let’s recap.
Concluding remarks
In short, expanding the definition of agritourism is one policy option, among many. Its main benefit to farming is increasing the demand for local farm products and providing another source of income to farmland owners to make a go of it. Unfortunately, these benefits will unevenly accrue to those who are older, wealthier and already experienced in business. Picture, in your head, the owners of existing agritourism operations in the Valley. How many are in their thirties… or even forties? They will also accrue to those who are not even farmers (whose property values will increase), but who happen to own farmland and already receive several thousand dollars worth of subsidy through their farm tax status. These are the last people we should be benefiting.
The losers are those trying to get started, or trying to make a go of it with limited capital and who would like to not take on too much debt. The policy will also put increased pressure on good soils, as buildings and parking lots are central to expanded agritourism. And, not least, conflicts between farmers and agritourism operators are likely to increase, particularly for livestock farmers, who already face challenging circumstances in the Valley with smaller parcel sizes, high land costs per acre and higher imported feed costs. In other words, this policy has the potential to make farming harder for a lot of stakeholders already facing challenges and help those who are already on their way.
If expanding agritourism was our only policy option, if the future for agriculture in the Valley was not already so promising, if reversing a move to expanded agritourism was easy, or if the benefits and drawbacks to the policy were more evenly distributed, then it may make for good policy. But this is not the case. The objective is important – helping farmers make a better living. But we should strive for policies that help all farmers, young and old, on the way out and on the way in, those who will be farming in 10 years and those who will be farming in 50 years, those who own their land and those who lease.
For me, a helpful question to put this in perspective is as follows: is the end goal that people who own agricultural land are able to make a good living from business enterprises on their land, one of which may be a farm? Or is the end goal that people who farm, regardless of whether they own land, have land to sustain and grow profitable agricultural businesses? If it is the second goal, which I think it should be, expanding agritourism is not part of the solution, it is part of the problem. Let’s keep looking for better ways to help farmers.
