By: Alison Cox, Staff Member
Autumn is the season for fall festivals, pumpkin patches, and hayrides, or in other words a season for agritourism. Kentucky defines agritourism as “the act of visiting a working farm or any agricultural, horticultural, or agribusiness operations for the purpose of enjoyment, education or active involvement in the activities of the farm or operation.”[i] Agritourism is one of the fastest growing segments of tourism nationwide, and as of 2012 there were roughly 300 agritourism operators registered in the Kentucky Department of Agriculture’s database.[ii] As Kentucky tobacco farmers move forward in the post-tobacco quota buy out economy, agritourism venues and events have been able to provide additional income for tobacco producers.[iii] Other states have also seen an increase in agritourism as small farms are seeking alternative methods of increasing profits due to economic challenges from foreign competition and large, corporate farms.[iv]
Agritourism arguably helps improve the local economy, but there are challenges to beginning an agritourism operation. Operating an agritourism business requires different skills than those needed for running a typical farm, also start-up costs including farm renovations and marketing can be high.[v] Of most concern are new liabilities that come along with operating an agritourism business. Ben Shaffar the Director of Business Development at the Kentucky Department of Agriculture stated, “[l]iability is the No. 1 inhibitor for farmers looking to diversify into agritourism.”[vi] Allowing visitors on your property increases an operator’s liability, as there is a legal duty to patrons to reasonably ensure their safety and well being while participating in the operations activities. If a patron is harmed the operator could be held liable and open to a lawsuit. While farmers may already have liability insurance for their farm, this insurance may not extend to certain agritourism activities.[vii] Obtaining adequate liability insurance is critical to the success of an agritourism operation; one unfortunate event can be potentially detrimental to the business.[viii]
Kentucky aided in the growth of agritourism by minimizing liability for agritourism operators. In July 2012, KRS 247.809 went in to effect and provides limited liability protection if injury or death of a participant results from the inherent risks of the agritourism activity.[ix] It is important to note that limited liability laws may benefit agritourism operators, but they are in no way a substitute for insurance.[x] It is important for all agritourism operators to protect themselves by obtaining liability insurance coverage. Limited liability laws do not bar all lawsuits, and they only provide an extra layer of protection for agritourism operators.
In addition to Kentucky, nineteen other states have laws that limit liability for agritourism operators. [xi] Those seeking to participate in agritourism in the remaining thirty states have to take into account full liability before beginning their agritourism operations. Limited liability laws encourage farmers to make the decision to join the agritourism business, and as the agritourism industry is on the rise, it seems to be a step in the right direction for non-liability law states to start thinking about how they can encourage agritourism.
[i] Agritourism, Kentucky Department of Agriculture, http://www.kyagr.com/marketing/agritourism.html (last visited Oct. 14, 2013).
[ii] Univ. of Ky. Coop. Extension Serv., Agritourism (2011), available at http://www.uky.edu/Ag/CDBREC/introsheets/agritourism.pdf, see also Agritourism, Kentucky Department of Agriculture, http://www.kyagr.com/marketing/agritourism.html (last visited Oct. 14, 2013).
[iii] What is Agritourism?, Kentucky Farms are Fun, http://www.kentuckyfarmsarefun.com (last visited Oct. 14, 2013).
[iv] What is Agritourism?, Eckert Agrimarketing, http://www.eckertagrimarketing.com/eckert-agritourism-what-is-agritourism.php (last visited Oct. 14, 2013).
[v] Univ. of Ky. Coop. Extension Serv., supra note 2.
[vi] Press Release, Kentucky Department of Agriculture, New law taking effect in July aims to protect agritourism operators and participants (June 27, 2012), http://www.kyagr.com/pr/newscenter/New-law-taking-effect-in-July-aims-to-protect-agritourism-operators-and-participants.htm.
[vii] Agritourism, Nationwide, http://www.nationwide.com/offering-agritourism-liability-considerations.jsp (last visited Oct. 14, 2013).
[viii] The Rural Landscape Inst., The State of Agritourism Liability Insurance in Montana and the West 1 (2007), available at http://www.rurallandscapeinstitute.org/insurance_report_09_07.pdf.
[ix] Ky. Rev. Stat. Ann. §247.809 (West 2012).
[x] Univ. of Ky. Coop. Extension Serv., supra note 2.
[xi] Colleen D. Holland, Know your state’s agritourism liability law, Lexology (Aug. 15, 2013), http://www.lexology.com/library/detail.aspx?g=0d53fefa-00fb-4e68-b748-efb3af27f132.