BROOKINGS, S.D. – South Dakota State University Extension has identified key challenges and opportunities operators face in agritourism, an emerging industry in the state.
“Agritourism is so important to rural South Dakota because it strengthens local economies, preserves agricultural heritage and brings new visitors, along with their spending, into small communities,” Peggy Schlechter, SDSU Extension Community Vitality Program Director, said. “It creates additional revenue streams for farmers, supports rural revitalization, and offers authentic experiences that visitors increasingly seek. With agriculture and tourism ranking as South Dakota’s two largest industries, agritourism is a natural fit.”
Schlechter and Xu Li, associate professor of Hospitality, Tourism and Event Management in the SDSU College of Education and Human Sciences, collaborated to collect information from 15 South Dakota agritourism operations along S.D. Highway 14. The conversations revealed four key challenges for agritourism producers: lack of business knowledge and skills, government regulations, time constraints and financial concerns.
“The insights gained are particularly significant for South Dakota, given the dominance of agriculture in its economy and the relative novelty of agritourism,” Schlechter and Li said. “SDSU Extension has a unique opportunity to play a pivotal role in fostering this emerging industry.”
A combination of agriculture and tourism, agritourism is rapidly growing among many U.S. farmers and ranchers. According to the U.S. Department of Agriculture’s most recent Census of Agriculture, conducted in 2022 and released in 2024, 1.5% of the 1.9 million farms in the U.S. were engaged in agritourism. These operations generated a total of $1.26 billion in 2022, representing a 33% increase over the 2017 total of $949.3 million.
Popular agritourism activities include “pick-your-own” produce operations, tours, workshops, hunting, fishing, camping, nature and wildlife observation and seasonal festivals. Schlechter said agritourism abounds with educational and economic possibilities. However, agritourism represents an entirely new business model for many farmers and ranchers.
“We wanted to talk to actual agritourism operators about their operations, their successes, their challenges, resources they used, resources they wish they had, etc.,” said Schlechter. “We can use their responses to help guide future programming/plans. We also found out that a lot of what we have been doing in agritourism is good.”
Agritourism operators identified a lack of business knowledge and skills as their greatest challenge. Things like creating a business plan, customer service, pricing, marketing – many traditional agriculture operators are not sure where to start and cited improving their own business knowledge and skills as crucial to their success.
Another challenge is government regulations. Local government plays a key role in agritourism development, especially in the areas of zoning and permitting, health and safety codes, and tax and fee structures. Most of the agritourism operators interviewed cited challenges, ranging from complicated and lengthy licensing procedures to a lack of understanding of agritourism by the regulatory body in question.
The third major challenge identified was time constraints. Farmers and ranchers want to share their stories but are often too busy with running their day-to-day operations to carve out extra time for secondary agritourism activities. During the interviews, different operators outline their strategies for creatively managing time and balancing their responsibilities.
Financial concerns were listed as the fourth major challenge faced by agritourism producers. Namely, farmers and ranchers need agritourism activities to generate enough revenue to cover their own operational costs rather than adding another expense. That can make starting a new endeavor, even a secondary one, difficult.
Li and Schlecter said SDSU Extension can further improve in its role supporting agritourism operators through education, facilitation and networking. SDSU Extension Community Vitality has hosted agritourism webinars, workshops and cohort programs, while also providing training and help with business plans and connections to small business resources.
SDSU Extension hopes to focus on addressing the critical knowledge gaps identified by agritourism operators, namely those who struggled with business skills unique to agritourism. Second, SDSU Extension hopes to strengthen its role as a networking facilitator, connecting agritourism operators with each other and with relevant resources.
“The conversations reveal that operators actively seek peer connections for knowledge sharing and support,” Schlechter and Li said.
Third, Schlechter and Li said SDSU Extension should serve as a resource for agritourism operators by engaging with key stakeholders, including government entities, agricultural and tourism offices, and local economic development organizations. SDSU Extension can help operators navigate complex regulatory requirements through training programs, pre-application consultations and online resources.
“Understanding the needs of South Dakota agritourism operators is critical to better support them and promote agritourism across the state,” said Xu Li.
For more information on this research and agritourism in South Dakota, contact Peggy Schlechter, SDSU Extension Community Vitality Program Director; or Xu Li, associate professor of Hospitality, Tourism and Event Management.
