What's Happening?

Facebook Twitter Youtube Linkedin

NEED HELP? QUESTIONS@FIA.ORG.ZA

become A FIA member TODAY
member login

Is Agritourism the future for farmers?

ARTICLE BY

  • Hanlie Kroese

SHARE THIS POST

A 2019 survey found just 24% of South African farmers are hosting some form of agritourism on their farms. That means there’s massive opportunity for expansion in this area. Agritourism could help farmers use their farm resources to their fullest potential, generate additional income and preserve the land. Globally, the agritourism market should reach USD 117.37 billion by 2027, with compound annual growth of 7.42% (between 2019-2027). It’s an important way for farmers to diversify their businesses and safeguard their farms for the future.

Started in Italy, agritourism is defined as any tourist activity on a farm, linked to the farm’s activities and attractions, from a restaurant or guesthouse to a farm shop. The definition includes activities like milking the cows or orchard walks. Primarily, it offers farmers an opportunity for increased income and a way to attract investment. It’s also a pivotal means of ramping up employment in rural areas.

The advantages of diversifying – from improved cashflow and profit to the spreading of risk – outweigh the disadvantages. Hanlie Kroese, Segment Solutions Santam Agri says, “Diversification is one of the greatest ways to manage risk. Agritourism empowers farmers to use a farm to its fullest potential. It’s also a critical way to connect farmers with the public. This counts more than ever in a time where consumers want to know where produce comes from – they’re seeking to see the faces behind the farms. Agritourism is a way to give them a meaningful glimpse into this world.”

Hanlie adds that agritourism does come with some risks, so should be carefully considered. “On the one hand, diverse enterprises mean you lower your risk. However, branching into different activities also invites a new risk landscape. It’s crucial that farmers consider agritourism insurance, which covers business interruption, theft, and public liabilities.”

Opening a guesthouse, for example, invites a host of potential problems, from burst geysers and broken appliances to damaged swimming pool pumps. Hanlie adds, “Once a farmer insures a guesthouse or lodge, Santam’s Agri policy has been extended to automatically cover ‘niggles’ like this, which can add up to be extremely expensive.”

Hanlie also presses the need for business interruption insurance. “Curveballs happen, and farmers need to protect the diverse enterprises they’ve invested in. Business interruption insurance is one of the best ways to guard against the unexpected.

Another big concern for farmers is obviously theft. “Farmers are opening their farms – their homes – to others, which can feel overwhelming. Proper theft cover can help provide peace of mind. Santam provides up to R10 000 cover for loss or damage to buildings and covers guests’ and customers’ personal effects for up to R5000 for any one item. We do the same for the personal effects of the insured, and the insured’s partner, director, and employees.”

Public liability must be another major consideration, as the tourism sector is very vulnerable to liability claims. Adequate liability insurance is therefore essential. “Our liability cover includes damage to visitors’ and guests’ property on a farmer’s premise, plus damage to third party vehicles using the farm’s parking facilities. It even includes damage caused by animals – in various circumstances.

Hanlie concludes, “Opening new enterprises on a farm is an extremely worthwhile pursuit but must be done with due care and consideration. All these extras come with new risks, which is why investing in the right insurance is key.”

Subscriber Terms and Conditions

  1. APPLICATION OF TERMS
    • These terms and conditions (“Subscriber Terms”) apply to the subscription by any qualifying member of the South African Underwriting Managers Association NPC (“SAUMA”) to the services and benefits offered by FIA Services (Pty) Ltd (“FIA Services”) under the SAUMA affiliation arrangement (“Subscription”).

  2. NATURE OF SUBSCRIPTION
    • A Subscription under this arrangement:
      • does not constitute membership of FIA NPC;
      • does not confer any voting rights or governance participation in FIA NPC; and
      • is governed solely by the contractual relationship between the Subscriber and FIA Services.

  1. ELIGIBILITY
    • To qualify for the Subscription, the applicant must, at the time of application, be a current paid-up member of SAUMA.
    • FIA Services will verify the applicant’s SAUMA membership status with SAUMA prior to activation, and may re-verify such status periodically.
    • If a Subscriber ceases to be a paid-up member of SAUMA, the Subscription will correspondingly be terminated.
    • Applicants are required to authorise FIA Services to confirm their SAUMA membership status with SAUMA as part of the application process.

  1. SERVICES
    • The Subscription entitles the Subscriber to the following benefits:
      • Complimentary access to the FIA CPD Platform;
      • Complimentary access to the FIA Insight Magazine (digital edition);
      • Advertising opportunities on FIA platforms at a discounted rate of 15% (fifteen percent) off the prevailing published rates; and
      • Invitations to attend FIA Technical Webinars annually.
    • FIA Services reserves the right to update, vary or substitute the Services from time to time, provided that the overall value and nature of the benefits remain materially the same.

  1. FEES AND PAYMENT
    • The monthly subscription fee is R260.00 (two hundred and sixty rand) for up to seven registered individuals (Key Individuals and Representatives), and R36.00 (thirty-six rand) per additional registered individual thereafter, excluding VAT.
    • The Subscriber shall provide FIA Services with the required details of each individual to be registered under the Subscription for the purposes of activation and billing.
    • All fees are exclusive of VAT, which shall be charged at the prevailing statutory rate.
    • Subscription fees are reviewed annually in March and may be adjusted with effect from 1 April.
    • Any changes to the Subscription, including but not limited to the number of Representatives and Key Individuals registered under the Subscription, may only be effected once annually during the annual review period in March of each year, with such changes taking effect from 1 April.
    • Subscription fees shall be billed monthly in arrears, unless the Subscriber elects an annual billing cycle at the time of application.
    • The Subscriber shall ensure that all billing information (including contact details, authorised signatories and bank account details) is kept accurate and up to date.
    • Non-payment of subscription fees may result in suspension of access to the Services until such fees are brought up to date.
    • The Subscriber acknowledges and agrees that all subscription fees payable under these Subscriber Terms may be collected by way of debit order, which shall be processed by the holding company, FIA NPC (The Financial Intermediary Association of South Africa), on behalf of FIA Services. Payment to FIA NPC shall be deemed to constitute valid and sufficient discharge of the Subscriber’s payment obligations to FIA Services under these Subscriber Terms.

  1. ONBOARDING
    • Onboarding will be conducted as a Subscription with FIA Services under the SAUMA affiliation arrangement.
    • Onboarding will not confer FIA NPC membership status or any associated rights.
    • Onboarding is conditional on confirmation of the Subscriber’s current SAUMA membership at the time of application

  1. DATA PROTECTION
    • FIA Services will process all personal information in accordance with the Protection of Personal Information Act 4 of 2013 (POPIA) as set out in our POPIA policies.
    • By subscribing, the Subscriber authorises FIA Services to confirm their SAUMA membership status with SAUMA and to process personal information for the purposes of fulfilling the Subscription.

  1. TERMINATION
    • The Subscriber may terminate the Subscription by giving FIA Services one calendar month’s written notice.
    • FIA Services may terminate the Subscription on one calendar month’s written notice, or immediately if the Subscriber breaches these Subscriber Terms and fails to remedy such breach within 14 (fourteen) days of receiving written notice.
    • Termination of the SAUMA–FIA Services affiliation agreement shall not automatically terminate these Subscriber Terms.
    • Termination by the Subscriber shall not relieve the Subscriber of liability for any subscription fees accrued up to the effective date of termination.
    • FIA Services may suspend or terminate the Subscription with immediate effect in the event of non-payment of fees by the Subscriber.

  1. GENERAL
    • These Subscriber Terms are governed by the laws of the Republic of South Africa.
    • Any disputes arising under these Subscriber Terms shall be dealt with in accordance with the dispute resolution provisions contained in the FIA NPC membership terms and conditions, as modified to reflect that the contractual relationship is with FIA Services.
    • Any notices required under these Subscriber Terms may be validly delivered by email to the addresses provided in the Subscriber’s application form, and such notices shall be deemed received on the day of transmission if sent during business hours.
    • The Subscriber may not assign, cede or transfer any of its rights or obligations under these Subscriber Terms without the prior written consent of FIA Services.
    • No variation of these Subscriber Terms shall be of any force or effect unless reduced to writing and signed by both FIA Services and the Subscriber.