Factors underlying farm diversification: the case of Western Australia's olive farmers

The growth of niche markets in rural industries has been one response to the restructuring of established agricultural industries in developed countries. In some cases entry into niche markets is part of a diversification of activities from other areas of farm-based production or services. In other cases, operators have sought to diversify from niche market production into other areas, such as on-site selling and agritourism. This paper outlines the findings of an exploratory qualitative study of the factors that olive farmers in Western Australia take into account when considering diversification, with a special focus on diversification into servicing visitors in the form of on-site selling and agritourism. Face-to-face and telephone interviews were conducted among 23 small olive growing operations located in the main olive growing region of Western Australia. Decision-making is shown to involve an assessment of risk, which is shaped by their appraisal of economic conditions, market opportunities, access to resources (including labor), and lifestyle factors. The argument is made that a fuller understanding of diversification is gained by studying both those who seek to diversify and those who do not, in contrast to most previous research that has only focussed on those who diversify. Also argued is that diversification is best seen as a continuum of adjustment strategies, which is guided by a combination of economic need, risk assessment (based largely on resource access), market potential, and lifestyle factors