The children’s nursery rhyme about Old MacDonald’s farm tells about the cow, the pig, the horse and the sheep that the farmer kept, but says nothing about farm services. Farming in Western countries has shifted from an overwhelming emphasis on growing food to the management of an increasing array of services. Being a farmer in Britain was not generally a happy experience during the last years of the twentieth century, with numerous food scares such as ‘mad cow’ disease, and increasing pressure on margins from supermarkets who bought their produce. It seemed that customers were not prepared to pay high enough prices to make it attractive for farmers to grow crops, raise animals and produce milk and eggs. Admittedly, there had been some bright spots in the quest to improve profit margins, with farming becoming ever more intensive from the 1960s onwards, with larger farms using land, machinery and chemicals intensively. But even organic farming — seen as a hope of the 1990s — lost some of its glamour as competition forced down farmers’ margins. It hardly seemed surprising, therefore, that farmers should seek to diversify into services. According to the 2009/10 Farm Business Survey produced by Defra, 50 per cent of farms had some form of diversified activity. While much of this related to renting out farm buildings, 27 per cent was not related to buildings and was largely service based (Defra, 2011).

The idea of adding value was nothing new to farmers; after all, many had undertaken some processing of the food that they had produced, such as turning milk into cheese. Many more had ventured into services by selling the produce that they had grown through their own farm shops. These had developed from simple roadside stalls that operated only at harvest time, to become fully fledged services activities in their own right. It was no longer good enough simply to have the right fruit and vegetables, but also opening hours, car parking and customer facilities that met buyers’ rising expectations. Some farm shops have even developed into mini out-of-town visitor destinations, which families visit in order to eat, go shopping and provide entertainment for children. In an attempt to get a higher price for their produce, some farmers have developed innovative service-based methods of delivery. Vegetable box schemes have become very popular with some segments of food buyers, who prefer to pay a premium price for freshly delivered local produce. Barcombe Organic Nurseries, in Lewes, Sussex, is typical of many farms that have developed a vegetable box scheme by offering buyers Internet-based ordering, home delivery and food preparation advice. Getting closer to customers is also achieved by selling produce from the farm at the farmers’ markets that have sprung up in many towns and cities since the late 1990s.....

Case study review questions

1. To what extent is the presence of a well-developed agricultural services sector a prerequisite for an efficient and profitable agricultural sector? Or is the development of the agricultural services sector — a consequence of advanced farming methods? 

2. From a marketing perspective, discuss the main differences between a crop of potatoes and a camping site. 

3. What are the principal challenges that farmers are likely to face as they develop new consumer services to supplement their basic agricultural output?