Entrepreneurship in New Zealand Farming

Visitor numbers
A wide range of enterprises
When established
Parallel enterprises on farms
Multiple and evolving enterprises
Enterprise ownership
Figure 1: Parallel and Evolving Enterprises - Illustrative Cases

Tourism

Tourism is an important enterprise option for farm households. Just under 40% of the respondents had enterprises that were either all or in part based on the tourism industry. Just over half of these enterprises provided accommodation, that ranged from bed and breakfast to fully catered. Respondents who offered farm accommodation discriminated between ‘home hosting’ (being dinner, bed and breakfast) and ‘farm stays’ (which involved more active observation of the farm). The most common attractions on the farms, apart from accommodation and meals, were the homestead gardens, the ‘farm yard’ and associated activities such as shearing and watching the dogs working, or simply enjoying the ambience of the farm and countryside. Also offered are a variety of activities on and off farms, including fishing, hunting, jet boating, golf, skiing, and handicrafts. In many cases these are associated with farm stays.

Visitor numbers

Sixteen operators provided information on visitor numbers. These fluctuate seasonally and range in total annually from 50 (bed and breakfast) to 5,000 (catering and gift shop). Most enterprises have a mix of international and domestic visitors. International sources were predominately North American and UK/ Europe although Asian visitors are important to a number of enterprises.

A wide range of enterprises

Two thirds of the farms studied had non-tourism enterprises. These covered a wide range, providing further evidence for entrepreneurial skills and initiative on farms. There were various craft businesses such as patchwork, pottery, knitting (including design and production of ‘up market’ woollen goods); and entrepreneurs with an interest in craft or business management, displays and marketing. A number of these ‘craft’ industries produced for both the domestic and international markets. Plant nurseries were often allied to farm tourism, although there were also stand alone nurseries. Nursery production ranged from specialised garden plants to shelter belt seedlings, trees and shrubs, ‘native’ and exotic species, and bulbs. Other enterprises included horticultural marketing and consultancy (domestic and international), viticulture and wineries — one with a restaurant — and two fashion garment enterprises, each requiring total input from the entrepreneur from designing to tailoring to marketing. There were enterprises in specialist food processing and marketing. Non-traditional agricultural processing included organic products, medicinal herbs, (non-allergy) wool, dairy products, and specialist cereals. Agricultural services and contracting included computer technology, stud stock recording, a farm consultancy, farm and rural residential real estate valuers and sales people, seed cleaning and exporting, aerial and crop dusting/spraying, silage making, cultivation, large and heavy machinery use. General services included journalism, computer software development and sales, importation and sale of vehicles, and transport operations, along with several light manufacturing enterprises.

When established

In recalling the early days of their enterprise the comments of respondents were similar, they ‘started slowly and evolved’. Establishment of the enterprises spans a thirty year period with the ‘oldest’ enterprise starting in 1965, followed in 1968 by another and a further four by 1979. The majority, thirty-one, were established in the 1980s.

Parallel enterprises on farms

A major finding was that alternative enterprises often run in parallel. For example, the majority of garden tour enterprises operated in conjunction with nursery sales and, in several cases, of specialised nursery products. Tea and gift shops, specialist food products, dried flowers and flower oils, weaving, pottery, art works, craft wool, metal work and design are further examples of parallel ventures, often run in conjunction with farm stays or garden tours. Some enterprises operated their farm and or garden tours through commercial tour networks. These entrepreneurs added value to their enterprise either by providing catering (lunches, morning and afternoon teas) or providing access to their garden nurseries. The opportunity of an ‘on the spot’ market for a range of products has not been lost on the farm family competing in an increasingly competitive tourist market. They also reflect the spectrum of skills contained within the farm couple.

Multiple and evolving enterprises

The enterprises ranged considerably in size, frequently evolving from a small beginning and low capital input to a much larger concern, with considerable reinvestment of profits along the way. Not only were a number of parallel ventures found on one farm, but each of these may have followed a process of slow evolution. Sometimes there were clear synergies between these businesses, in other instances they took very different tracks. So the composition of alternative enterprises later in the farm-life cycle may be very different to their humble beginnings. Illustrative cases of the evolution of parallel enterprises on farms and the interrelationships between them are provided in Figure 1. The picture of multiple and evolving enterprises reinforces a very strong picture of entrepreneurship on New Zealand farms. The opportunity to identify and develop a number of potential markets is actively taken up by farm families looking to take advantage of all their natural and personal resources.

Enterprise ownership

Partnership (50-50 equity) was the ownership structure favoured by the majority (55%) of enterprises followed by sole proprietorship (19%) and company (12%). With the exception of three enterprises which had a partnership with outside investors or non-family working partners, all the partnerships were with family members, the majority being between the farm couple. Ownership, however, was not always straightforward, and the number of combinations reflected the diverse requirements of the entrepreneurs, the type of enterprise, the complexity of the business structure and the relationship between the farm operation and the enterprise or enterprises.