Tourism and Agriculture:
Creating Linkages
I. Identification
1. The Issue
As developing countries seek out opportunities to strengthen their economies and existing industries, create jobs, increase foreign exchange, and reduce unemployment, the tourism industry has become a driver for economic opportunity. As one of the world’s largest industries, many developing countries have embraced the tourism industry as a means of achieving these goals.
The economic impact generated by the tourism industry can have both positive and negative effects on the host destination. Economic leakages occur when money spent by tourists leaves a destination in the form of fees, profits, and wages (Economic Impacts). On the other hand, economic linkages can help to retain the economic benefits of tourism in a destination by linking local suppliers with the tourism industry.
Representing approximately one-third of all tourist purchases (Belisle 1983), food presents a strong opportunity for destinations to create backward sectoral linkages between the tourism and agriculture industries. Creating such backward linkages would reduce leakages from tourism and also increase the multiplier effect from tourist spending. Often, however, these linkages fail to develop. This can be attributed to a variety of factors ranging from an unorganized local agriculture industry to the perception that local produce is not desirable to foreign visitors.
Despite the worldwide growth of tourism and the theoretical ability of the industry to provide economic benefits for indigenous communities, tourism often results in high levels of leakages when few ties are developed between the destination community’s industries and the tourism industr
2. Description
This case study analyzes the interactions between the tourism industry and the agriculture industry in three tourism destinations (Mexico’s Yucatan, Canada’s Niagara region, and Indonesia). Through making comparisons between the results of different practices, a number of ‘best practices’ will be determined for the consideration of policy makers with regards to tourism planning and economic development.
An analysis by Rebecca Torres of sectoral linkages between the tourism and agriculture industry in the Yucatan illustrates that often there is a strong potential for local products to be utilized by the tourism industry. Torres’ research shows that, as in the case of the Yucatan, a misconception often exists that tourists will not embrace local food products. After surveying several hundred international visitors to the destination, Torres concludes that tourist ‘food consumption and food preferences do not necessarily represent a significant obstacle to promoting future linkages between tourism and local agriculture.’ (Torres 2002)A study by David Telfer in 2000 regarding the purchasing practices of three Indonesian hotels revealed how individual tourism enterprises can form strategic partnerships with the local agriculture industry. Telfer observed that hotels of different sizes and ownership structures (locally owned vs. internationally owned) all have the ability and potential to purchase food supplies locally. The hotels observed were the Sheraton Senggigi Beach Resort (four star), the Aquila Prambanan (five star) and the Peti Mas Guest House (locally owned, non star-rated). Telfer noted in this study that the locally owned hotel purchased a much greater percentage of its products locally. Different circumstances were also noted that could affect each hotel’s purchasing patterns. For example, a new executive chef at the Sheraton hotel was more familiar with local food producers and made more orders with these merchants. Changes to distribution channels also helped to encourage the larger hotels to purchase locally. This was highlighted again with the Sheraton Senggigi Beach Resort, which in 1995 benefited from the introduction of a refrigerated delivery truck that transported food between a market in Bali and the resort area.
The Tastes of Niagara Alliance in Southern-Ontario Canada represents an example of how the tourism and agriculture industries within a destination can work together to improve the quality of the visitor experience while also contributing to the destination’s local economy. The alliance was originally formed when local chefs in the Niagara region sought to build stronger communication between the agriculture and restaurant industry. Today, the alliance promoted linkages through joint marketing campaigns, special events, partnerships, and new product development. Funding for these activities is derived from membership fees, special events, corporate sponsorships, and through partnerships with governmental agencies. As a result of this program, linkages between tourism and agriculture have been created and regional cuisine has become more widely recognized as being a high quality product. Restaurants and other food-service establishments have benefited from the recognition that they have gained as a result of their membership in the alliance. Additionally, the alliance itself has increased its own brand awareness through popular food-tasting events and a membership logo that member businesses display to consumers.
Each destination described above has responded in differing ways to the challenge of linking the local tourism industry with the local agriculture industry. In the Yucatan, linkages are essentially non-existent while Torres’ study shows that there is great potential for the destination to create them. In Indonesia, individual tourism entities have acted to help create linkages with local agriculture when conditions allow. This has occurred, however, as a result of the actions and decisions by the individuals involved in the purchasing for each hotel. In Southern Ontario, the Tastes of Niagara Alliance represents how both the tourism and agriculture industries can organize to create strong linkages that can not only help to minimize leakage, but also add a perception of quality to the food products that originate within the destination.
3. Related Cases
The following three cases provide an in depth analysis of each of the three destinations that have been discussed in this case:
Telfer, David J. & Wall, Geoffrey. (2000) Strengthening backward economic
linkages: Local food purchasing by three Indonesian hotels. Tourism
Geographies 4, 421. Retreived February 5, 2005, from EBSCO database.Telfer, David J. (2000) Tastes of Niagara: Building Strategic Alliances Between Tourism and
Agriculture. International Journal of Hospitality and Tourism Administration 1. 71-88.Torres, Rebecca. (2002) Toward a better understanding of Tourism and agriculture linkages in
the Yucatan: Tourist Food Consumption and Preferences. Tourism Geographies, 4, 282-306.
4. Author and Date:
Joshua O’Driscoll, Masters of Tourism Administration Candidate
Department of Tourism and Hospitality Management
School of Business and Public Management
The George Washington University
Spring 2005
II. Policy Impacts
5. Social:
The creation and strengthening of backward sectoral linkages between tourism and agriculture can have a substantial social impact on the destination community. Traditionally, tourism development has been the subject of a great amount of criticism regarding the loss of the host community’s cultural identity. Tourism-agriculture linkages, however offer the potential for the host community to preserve its culture through strengthening its local agriculture industry. Destination communities also gain the opportunity of sharing their unique agricultural products with tourists. This can result in a sense of pride, foster educational experiences and encourage the preservation of local customs.
6. Environmental:
hen developing tourism, destinations must always consider their priorities with regards to the use of land. Often, the tourism industry competes with the agriculture industry for use of land. The creation of linkages between tourism and agriculture adds value to the local agriculture products, land and industry. This provides local farmers with a greater opportunity to benefit from tourism development through business stimulation. Additionally, these circumstances result in the building of a strategic partnership between the tourism and agriculture industries. In the long run, this could lead to a cooperation and understanding regarding the use of land by each industry.
The tourism industry is widely criticized for the environmental degradation that can occur from increasing visitation to a pristine area. This is an issue that must be addressed. In order to create linkages between tourism and agriculture, food must be produced in a safe, sanitary and healthy environment that ensures a high quality food product. If the tourism industry does not have confidence in the environment that food is produced in, it will be more likely to import its food products.
7. Economic:
Economic impact from tourism can be highly lucrative if tourism industry is developed in a manner that minimizes economic leakages. The creation of backward economic linkages between agriculture and tourism provides destinations with the opportunity to distribute the economic benefits from tourism into local agriculture businesses. Without such linkages, hotels and restaurants import their food products, which results in greater economic leakage.
8. Other:
IIn addition to the three case studies mentioned above, many other destinations have taken a variety of actions to help create and strengthen linkages between tourism and agriculture.
In St. Lucia, the government has create the St. Lucia Heritage Tourism Program, which is currently evaluating the food products purchased by the island’s tourism industry so that local producers can increase their share of the market.
In South Oxfordshire, England, the Tourism Better Business organization has created an event to bring local food producers together with the local tourism industry. The event has been compared to a ‘speed dating’ event because of the potential for relationships to form between a number of different participants through the one event.
Iowa State University’s HRIM Extension (Hotel, Restaurant, and Institution Management) has initiated the local food project, which brought purchasing directors from the food service industry (ranging from tourism to school districts) together with food producers and food cooperative advocates. The program provided a forum for each stakeholder to discuss how the purchasing of local food products can be encouraged.
9. Suggested Interventions:
Destinations that seek to create and/or strengthen backwards economic linkages between tourism and agriculture must evaluate the ability of the local agriculture industry to be competitive by meeting demand with high-quality products. If the potential exists for such linkages to be created, local food producers must interact with the purchasing authorities for the tourism industry in order for the needs of each party to be expressed and mitigated so that the food producers and purchasers can build lasting and sustainable relationships.
III. Legal Clusters
10. Discourse and Status/Policy Issue:
The nature of the food service industry requires that food and beverage outlets have the ability to select their products based on quality, quantity needed, cost, etc. Sometimes, food product suppliers must be selected according to their ability to meet the specific needs of the food and beverage outlet. Participation in alliances such as Taste of Niagara is voluntary for this reason. Additionally, member businesses are always free to purchase food products from outside of the alliance as needed.
The challenge that alliances must address is how to minimize the need of food and beverage outlets to make purchases from outside of the alliance. In the Niagara case, this was addressed through an effort to increase the size of the alliance to more local producers. This helped to ensure that a wider variety of food products were offered through the alliance.11. Forum and Scope/Existing Policy Framework:
Destinations, states, and countries have created a wide variety of policy through various levels of government to help ensure that food products produced within a jurisdiction comply with health regulations to protect consumers. This is often done through licensing of food producers, issuing of permits, regular inspections, etc. Additionally, cooperatives, food distributors, and food purchasers often create their own quality control standards for agricultural products to ensure that are of a satisfactory quality.
International and regional forums also exist, which promote the use of local food products by the tourism industry. These forums have been organized by a number of organizations including the WTO, National and Local Governments, NGOs, etc.
12. Decision Breadth/Stakeholders/Policy Actors:
The stakeholders in these cases are the restaurants, food producers (meat, fruit, vegetable, herb, etc.), food distributors (wholesale, retail, etc.), food processors, the restaurant industry, the hotel industry, travelers, local consumers, farm equipment providers, and governmental bodies (tourism authority, agriculture authority, infrastructure authority).
13. Legal Standing/Legal Regulatory Framework/Suggested Policy Intervention:
Legal liability and risk management are major concerns for all members of the food service industry. With regards to linkages between tourism and agriculture, small farms are particularly vulnerable to the liability of defaulting on a contract with a purchasing agent. One of the major concerns from the tourism industry is the ability of small local farms to be able to meet the needs of large hotels and resorts. If a food producer is unable to supply a food purchaser with the agreed upon quantity of an item, they can be held legally liable for the damage caused by not meeting the expectations that were negotiated in a contract. This type of scenario is often motivation for purchasing authorities to choose to import food products.
IV. Trade Clusters
14. Type of Measure:
Social measures, environmental measures, cultural measures, and economic measures can all be used to encourage the tourism industry to purchase locally produced agricultural products.
15. Relation of Trade Measure to Environmental/Tourism Impact:
a. Directly Related to Product:
The utilization of local agricultural products adds value to the tourist experience. In the case of Taste of Niagara, the marketing of the high quality and freshness of local food products helped to create a demand for foods prepared with locally produced ingredients. This reduces the leakage that results from food purchasers importing their ingredients and allows the destination to retain a greater portion of the economic benefit of tourism.b. Indirectly Related to Product:
The creation of linkages between tourism and agriculture can indirectly encourage food preparers to create menus that are more authentic and in-tune with the local culture. This can help to preserve local traditions and create a sense of pride in the local community that tourists are participating in their culture through food and beverage experiences.The increased demand for locally produced foods also has the potential to increase employment opportunities for residents of the local community.
c. Not Related to Product: N/A
d. Related to Process:
Increased demand for locally produced foods has great potential to provide local producers with the financial resources to become more competitive and modernize their facilities to improve their business.16. Trade Product Identification/Trade and Services:
Product identification is of high importance when promoting linkages between agriculture and tourism. Tourists should be made aware of the fact that their food was prepared with local products. Taste of Niagara achieved this in two ways; each member of the alliance was encouraged to display the ‘Taste of Niagara’ logo so that they could easily be identified. Secondly, the human resources of each member of the alliance were taught about how to communicate the benefits of using locally produced food products so that the information could be translated to tourists and food consumers.
17. Economic Data
Different types of tourism enterprises have different economic impacts on destinations. In their analysis of the purchasing patterns of the three Indonesian hotels, Telfer and Wall noted that a greater percentage of purchases by the small, locally-owned lodge were made locally. Both of the international hotel operations were more likely to import food products.
18. Impact of Trade Restriction:
As food purchasers become more comfortable with local purchasing, the number of food imports will naturally begin to decrease. In many destinations, this will reduce the number of tariffs that the purchaser must pay and will also result in a positive economic impact on the local community as more of the money generated by tourism stays in the destination.
19. Industry Sector:
The industries that are affected by this issue are the agriculture industry and the tourism industry (specifically the restaurant industry and the food and beverage division of the hotel industry).
20. Exporters and Importers:
The purpose of the creation of policies and systems to strengthen backward economic linkages between tourism and agriculture is to reduce the number of imports that are necessary to support the local tourism industry. By utilizing locally grown food products, more of the tourists’ money remains in the destination. This increases the multiplier, preserves and adds value to local culture, and diversifies the destination’s economy.
Increasing the number of international inbound tourists increases the number of exports for a country. The lodging and food service industries play major roles in this activity. As value is added to the tourism experience within a country through the preparation of authentic food products, more international visitors will be likely to plan trips to that country.
V. Macro/Environment Clusters/Tourism Policy Clusters
21. Environmental Problem Type/ Environmental Aspects:
(See section 6)
22. Resource Impact and Effect:
Tourism development can impact natural resources in a variety of ways. In certain cases, tourism has contributed to the preservation of resources while in alternative situations; destinations have witnessed unsustainable tourism development that destroys natural resources. Local food producers must be able to operate in sanitary environments with clean air, water, and soil in order to be able to provide a safe and high quality product. The strategic partnerships that are created between the tourism industry and local agriculture industry must recognize that the long-term success of each partner is dependent on preserving the natural resources in the destination.
23. Urgency and Lifetime/Urgency and Policy Review:
The reduction of leakages resulting from tourism development is a key factor in developing in a sustainable manner. Creating backward linkages between tourism and agriculture is highly feasible for many destinations. Rebecca Torres’ analysis of the food preferences of visitors to the Yucatan shows that often the opportunity to use local products exists but is not capitalized upon because of a misperception regarding the dietary preferences of tourists. The creation of these linkages should be considered a highly urgent matter because the development of strategic partnerships with the tourism industry and local agriculture can save local small businesses from being lost as a result of being uncompetitive.
24. Substitutes/Alternative Policies:
Alternative policies must be developed for each destination so that the constraints of its own seasonality, resource availability, legal structure, local agriculture and tourism industry, etc. can be considered. Policy makers and decision makers must understand, however, that in order to create these linkages, each destination must encourage communication between local participants in the two industries.
VI. Other Factors
25. Culture:
One of the greatest ways of experiencing other cultures is through food. Tourism enterprises that do not include the ability to eat authentic food as part of the visitor’s experience could be ignoring a very lucrative niche in the tourism industry. As travelers continue to demand more authentic activities and experiences in the destinations that they visit, the tourism industry should anticipate an increased demand for locally produced food products.
26. Trans-Boundary Issues:
Information and communication technology represents an opportunity for the agriculture industry to connect with the local tourism industry. This technology provides the agriculture industry with the ability to inexpensively market their products and services. Additionally, purchasing agents and members of the agriculture industry can gain the opportunity to easily communicate with each other. This technology can facilitate the creation of sectoral linkages between agriculture and tourism in destinations on a worldwide scale if used properly.
27. Rights:
In capitalist societies, businesses have the right to make purchasing decisions based on their own priorities and judgments. In order to promote linkages between tourism and agriculture, however, it is necessary to find ways to help make the local agriculture businesses competitive through price, quality, communication or a combination of each.
28. Relevant Literature
Belisle, F. 1983. Tourism and Food Production In the Caribbean. Annals of Tourism
Research 10: 497-513Benavides, D.D. (2001). Is the socio-economic sustainability of International Tourism
assured under hyper-competitive conditions? Retrieved February 17, 2005, from
Association of Tourism Summits Website: http://www.sommets-tourisme.org/e/
sommetsG/troisieme-sommet/actes/benavides/benavides.htmlBenavide, D.D. (March 22-23, 2004). International Symposium on Liberalization and
Trade in Tourism Services: A Think Tank To Show A Way Forward. [Electronic
Version] World Tourism Organization. Retrieved January 30, 2005
from www.worldtourism.org/quality/ E/events/symp_mar04/diaz.pdf.Economic Impacts of Tourism. (October 2001). Retrieved January 30, 2005 from
United Nations Environment Program website: www.uneptie.org/pc/tourism
/sust-tourism/economic.htmKaramustafa, K., & Kusluvan, S. (2001). Multinational Hotel Development in
Developing Countries: an Exploratory Analysis of Critical Policy Issues.
International Journal of Tourism Research. 3, 179-197.Long Term Prospects: Tourism 2020 Vision. (2005). Retrieved March 26, 2005
from World Tourism Organization website: www.world-tourism.org/facts
2020/2020.htmSmall Islands and Tourism: Finding a Balance. (March 1994) Retrieved January 30,
2005 from http://www.ecotourism.org.hk/other%20files/small%20island
%20and%20tourism.doc.Telfer, David J. (2000) Tastes of Niagara: Building Strategic Alliances Between Tourism and
Agriculture. International Journal of Hospitality and Tourism Administration 1. 71-88.Telfer, David J. & Wall, Geoffrey. (2000) Strengthening backward economic linkages:
Local food purchasing by three Indonesian hotels. Tourism Geographies 4, 421.
Retreived February 5, 2005, from EBSCO database.Torres, Rebecca. (2002) Toward a better understanding of Tourism and agriculture linkages in
the Yucatan: Tourist Food Consumption and Preferences. Tourism Geographies, 4, 282-306.Torres, Rebecca & Momsen, Janet. (2004) Challenge and potential for linking tourism
and agriculture to achieve pro-poor tourism objectives. Progress in Development
Studies. 4, 294. Retrieved February 5, 2005, from EBSCO database.Wilkinson P. 1989. Strategies for tourism in island microstates. Annals of Tourism
Research 16(2): 153-177.
VII. Conclusion
29. Policy Implications:
A policy that promotes and encourages the purchasing of local agricultural products by the tourism industry would have implications for many different stakeholders including local farmers, current food suppliers, the hotel industry, the local restaurant industry, purchasing authorities, food preparers, and tourists.
30. Recommendations:
Certain practices can achieve substantial results with regards to the promotion of sectoral linkages between a destination’s agriculture and tourism industries. Several of these ‘best practices’ are:
• Organization of small agricultural businesses to help achieve economies of scale (formation of cooperatives)
• Establishment of communication between agriculture producers and decision makers (purchasing agents, executive chefs, etc.) in tourism establishments
• Development of quality control procedures to ensure the consistent production of high quality produce
• Events to promote local produce to local businesses (often organized by department of commerce or ministry of agriculture)
• Promotion of local food as part of the cultural tourism experience in a destination
• Investment in infrastructure to improve the transportation conditions between local agricultural operations and the tourism industry
• Development of marketing devices to communicate what products are offered locally to the tourism industry
• Creation of logo to differentiate businesses that purchase local food products
