Contribution of rural tourism to the market for livestock products in LFAs in Germany *

The James Hutton Institute

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LSIRD NAPLIO CONFERENCE PAPERS
^{Contribution of rural tourism to the market
for livestock products in LFAs in Germany}

^{GEROLD RAHMANN}

^{Compared to the world market, the production of animal products
like meat, milk and wool has a low competitiveness and comparative cost
advantage in the European Union (EU). The protection of the common market
and subsidized products was the way to keep animal husbandry in the marginal
areas (LFAs) of the EU. With the GATT negotiations and the reformed Common
Agricultural Policy (CAP) this closed European market will be opened to
the world market. This will lead to high competition with other countries
and between the regions resulting in large structural changes in agriculture
in the community.}

^{Rural tourism plays an important role in the local economy of many
LFAs. The consumption behaviour of tourists while on holiday is different
to their behaviour at home. While on holiday, adventure buying is more
important than cheaper buying when at home. Tourists are often willing
to buy extraordinarities (e.g. souvenirs) or pay more for products with
local identity. This is even the case of food eaten while on holiday. A
„good holiday" for many rural tourists includes a „good" breakfast,
lunch or/and dinner in a restaurant or hotel with rural atmosphere, hospitality
and traditional or tasty food of the region. Nowadays, many restaurants
offer a menu with special emphasis on the origin of the meat. As with the
BSE-crisis, this has became an important marketing strategy of many butchers
and restaurants.}

^{Besides the „direct products" from animals sold in LFAs to
rural tourists, the marketing of „indirect products" has become of
more interest in the last decade. Touristic enterprises have identified
the cultural landscape and the „intact world" as an attitude for tourists
to their chosen holiday location. These expectations of rural tourists
have received more attention in public relations of the region. Beauty
landscape, rural lifestyle and farming adventure holidays are advertised
by tourist agencies. Actually, the German rural tourism is performed as
„competition of the regions", every region tries to attract
tourists with its local identity.}

^{This paper will show in the example of the Biosphere Reserve Rhön
(BR Rhön) the potential and problems of marketing animal products
to rural tourists in LFAs. The paper is divided into marketing of „direct
goods" like meat and wool and „indirect goods" like recreation
on farm, participating in rural lifestyle and landscape management in the
BR Rhön.}

2 The development of sheep keeping in Germany: the problem of low competitiveness of livestock products in LFAs and changed marketing structures

^{The development of sheep keeping for wool production in the last
century has shown that changed world markets can destroy a specialized
animal production in a very short time. For example, in Germany there were
about 30 mio. head of sheep in the year 1860 due to the excellent prices
for wool (terms of trade between wool and meat 1850: 1:17). With the improvement
of transport (steam ship, railways), the enormously increased flocks of
sheep overseas (e.g. New Zealand, Australia, South Africa, USA) and the
inventions of synthetic fibre and the cotton deseeding machine, the numbers
of sheep in Germany decreased to 5 mio. head within 30 years. The price
for wool fell rapidly (terms of trade between wool and meat 1880: 1:1).
The wool production in Germany lost its comparative advantage to other
countries and sheep were nearly all abandoned. Nowadays, there are about
2,4 mio sheep in Germany for meat production. The shearing of the wool
is more expensive than the value of the sheared wool (terms of trade wool
and meat 1996: 1:0,20) (RAHMANN, 1997).}

^{Mutton/lamb has a low competitiveness to beef or pork and to mutton/lamb
producers overseas. For example, New Zealand sheep traders can offer a
kg lamb for about 6,00 DM in a German supermarket, while German lamb of
this quality has to be sold at a minimum of 9,00 DM to beat the costs.
The only thing sheep traders from overseas cannot offer is meat with local
identity (e.g. meat from Rhön sheep produced in the Rhön).}

^{Without governmental support and new marketing strategies, the
production of milk, meat and wool would decrease and eventually be nearly
abandoned in disadvantaged areas. The actual governmental support to farmers
in the frame of GATT and the reformed CAP based on 2078/92 and 2091/92,
gives an income transfer to the farmers. These regulations are not any
more product-orientated but production-orientated: the subsidies are not
given for a kg of milk, meat or grain, it is given for extensive farming,
eco-farming, landscape management. Actually 50 to 70 per cent of the earning
in sheep keeping comes from subsidies. Nevertheless, the income of sheep
keepers is one of the lowest in farming in Germany, particularly in LFAs.
Additional improvements of marketing the products are necessary to have
an economically successful enterprise. Rural tourists are an excellent
group of well-paying consumers in LFAs.}

^{The
BR Rhön is a hilly LFA in Germany with a harsh change in agricultural
structure during the last few decades. The BR Rhön was established
in 1991 as the 12th biosphere reserve (BR) in Germany. It is situated in
the middle of the country in a triangle of Bavaria, Hesse and Thuringia
and comprises about 166.674 hectares (Table 1) (GREBE/BAUERNSCHMITT, 1995).
In terms of flora, fauna and geology, the Rhön is one of the most
remarkable low-range mountain areas in Germany (Figure 1). Apart from the
numerous precious woodlands and vast areas of meadow land, the Rhön
is characterised by extensive hill-top clearings in the upper reaches.
These originated during the clearance period in the Middle Ages. Reforestation
has been inhibited to date through natural grazing by native breeds of
cattle and sheep (old domestic breed is the Rhön sheep).}

^{There are great differences between Thuringia and Hesse/Bavaria.
In Thuringia, part of the former GDR, one farm, agricultural co-operatives,
manages 2.000 to 5.000 ha. In Bavaria the average farm size (full-time
farmer) is 50 ha, for all farmers (sideline farmers and full time farmers)
only 9 ha per farm. Sideline farming is very important in the Rhön,
particularly in Hesse and Bavaria (in the Bavarian part of the Rhön
there are about 2.700 farms: 2350 sideline farmers and 350 full time farmers;
in the Hessian part of the Rhön: 2.550 farms: 1.870 sideline farmers
and 680 full time farmers; in Thuringia: 13 farms as LPG-followers; no
sideline farming, many hobby farmers (<3 ha)) (GREBE/BAUERNSCHMITT,
1995).}Table 1: Biosphere Reserve Rhön in brief

^{With 1,5 mio. overnight stays per year (1991: GREBE/BAUERNSCHMITT,
1995), tourism is one of the most important branches in the economy of
the BR Rhön. 300.000 rural tourists stay for one day, 100.000 for
rehabilitation and over 1.100.000 for holiday. The average time of staying
is roughly 4,3 days and the daily expenditure of day-tourists is about
29 DM and for holiday tourist about 65 DM (FUTOUR, 1996). The expectations
to the Rhön as a holiday area are mainly orientated to the nature
and active recreation (hiking, biking etc.).}

^{The cultural landscape gives the Rhön the tourist perception
of „a land of open spaces". With the declaration of the BR Rhön
the Rhön sheep was chosen as an emblem of this cultural landscape
as a publicity effect for tourism. Free publicity for the BR Rhön
has been given by the local Hessian radio station taking the Rhön
sheep „Manfred" as their mascot.}

^{One hundred years ago the Rhön sheep, excellently adapted
to the harsh conditions in the hilly areas of Germany, could be found nearly
everywhere. The number of more than 200.000 head of this breed declined
rapidly during this century (KOLB, 1996). In the '50s there were only 300
herd book-registered head of sheep. The breed has nearly become extinct.
In the '60s, the number increased a little to 1.000 head but the breed
was still endangered. Nearly all of them were kept outside the Rhön
by hobby keepers. In 1987, the BUND (a Germany-wide nature conservation
association) bought a herd of 200 sheep to re-introduce them into the Rhön
to maintain endangered cultural landscape with an endangered domestic animal
(POPP, 1993). In 1996, the number of Rhön sheep in the Rhön had
already increased to a number of 2.000 head.}

^{„Direct goods" are defined as material goods which can be
quantified and qualified. In animal keeping, these goods are milk, meat,
eggs and wool (even processed). Sheep produce meat and wool as direct goods.
Meat can be sold in kg and classified in the EUROP-system (alive or slaughtered),
wool in kg and classified in in m, colour or dirtyness.}

^{The definition of high quality food has been changed by the German
consumer during the last 10 to 20 years. Besides the official classification
(EUROP) and measurable quality (low fat, colesterine) many consumers have
recognized with increasing attentiveness the origin of the product and
the way of production. These expectations have been fulfilled by an increased
number of animal keepers. They advertise their products with ecological
and local distinctiveness (like trade marks). One of the best markets for
these products are the rural tourists.}

^{German culture has a special attitude to the meat of sheep. At
home, lamb is less prefered than pork or beef., while in many regions it
is declared as a delicatess or speciality, particularly in LFAs with a
important history in sheep keeping (Lüneburger Heide, Rhön,
Deichgebiete). Many regions have created a label to promote their lamb
to the consumer. These effects stretch from national advertising (Fleisch
aus deutschen Landen) to state level (Thüringer Lamm),
regional level (Rhönschaffleisch aus der Rhön) and local
levels (Seifertser Hirtenpfanne). The regional and the local level
especially are important for marketing to rural tourists.}

Figure 4: In the tourists' opinion while on holiday the dishes should be with local distinctiveness

Figure 5: How much more would the tourists pay for dishes with local distinctiveness

^{Lamb can be offered successfully to these tourists at a high price
level (Figure 5). Some restaurants in Bad Neustadt, a town in the
Rhön, offer specialities of the Rhön lamb, the typical
and endangered breed of the region. They co-operate with the German Railway
Company (Deutsche Bundesbahn) (HESS, 1996). On special days
extra chartered trains carry tourists to Bad Neustadt for lunch.
Restaurants buy the Röhn lamb for 13,50 DM per kg carcass weight.
Compared to the wholesaler price of 6,40 DM (free slaughterhouse, Aug.
1996; ZMP, 1996) this is double of the price.}

^{Besides the individual co-operation between farmers and touristic
suppliers, marketing co-operation on regional level tries to promote local
products. In such a co-operative farmers, restaurants, touristic offices
and individual persons gathered to do joint marketing of a special product,
for example Rhön sheep. The marketing is based on special characteristics
of the sheep (endangered), special purposes (landscape management) or the
way of keeping (eco-farming, traditional farming). The co-operative organises
the marketing, restaurants offer specialities of this particular sheep.}

Figure 6: Information in the menu concerning the typical regional dishes is important for Rhön tourists (1995)

^{One example is the marketing association „Aus der Rhön
für die Rhön" which wants to promote the Rhön sheep.
With the establishment of the BR Rhön in the year 1991 this breed
has become label for the area. New marketing strategies have had to be
established. In 1992, a restaurant and the LEADER supported organisation
„Natur- und Lebensraum Rhön e.V." organized a meeting
of several restaurants from the Rhön. About 25 restaurants attended
the meeting but could not be convinced to participate in a special marketing
offensive for the Rhön sheep. By 1993, the marketing of the Rhön
sheep had become successful and other restaurants joined the group. The
marketing co-operation „Aus der Rhön für die Rhön"
was established and local products were sold in 18 restaurants in the Rhön.
In 1994, a second marketing co-operation was established with 60 restaurants
(„RH&OUML;NER CHARME"). The marketing strategy was slightly different.
Rhön lamb is bought by these restaurants at an excellent price (13
to 20 DM per kg) and even the dishes with this meat are sold 200 to 300
per cent more than using ordinary lamb.}

^{These are only two examples of co-operation between local producers
and local touristic restaurants/hotels in the case of the BR Rhön.
The marketing of meat as a speciality/delicatess with local identity to
rural tourists is dependent on restaurants. Compared to souvenirs or other
durable goods, this meat has to be consumed in the area (restaurants) while
on holiday. Apart from sausages, no tourist would buy expensive meat to
consume at home. Meat with local identity can only be sold as a speciality
to rural tourists. This needs co-operation between animal keepers and tourist
orientated restaurants/hotels: „The restaurants have in the marketing
of regional products a key and multiplicator function, which is only successful
and economically sustainable with good quality and ingenious marketing
of the product (KRENZER, 1996)". The consumption of meat
with local identity makes the meal an adventure for the tourists. For them,
this is a form of participation in the local environment. This shows that
the consumption of lamb with local identity is more than the taste. It
is the whole atmosphere and the ambiente in which it is consumed. Only
if the atmosphere is as it was expected by the tourists, will they be convinced
that they had a good meal for a good price. Besides hospitality, this atmosphere
can be attained by special emphases like explanations of the products.
The information of the origin and the history of the products, the way
of production and the preparation is necessary to get a product with local
identity (KEMPF/KRENZER, 1993). The saying of „protection by consumption"
was created.}

^{Actually, the wool production in Germany is not profitable. The
price for shearing a sheep costs as much as the value of the sheared wool.
Nowadays, wool is a secondary (couple) product in sheep keeping. German
wool is, with the breakdown of the German wool marketing company (Deutsche
Wollverwertung GmbH) in 1996, not competitive on the world market and under
heavy constraints.}

^{Rural tourism can be used to have some profits even in wool production.
In the BR Rhön (Rhön Plüsch aus Kaltensundheim/Thuringia)
the wool of the Rhön sheep is used to make sheep toys for children
and souvenirs for tourists. They cost between 15,- and 50,- DM and the
income from wool per sheep can be doubled, despite only a small part of
the wool being used. Of course, this is a limited market. It is, however,
creating jobs and a marginal contribution to sheep keeping in a LFA. Even
wool clothes manufacturers use the BR Rhön for marketing: e.g. neckties,
shirts and socks made from Rhön sheep wool are sold at a high price
to tourists in the Rhön. There are some other examples of marketing
wool to tourists (e.g. sheep skins, wool paper) but the market is very
limited. The selling of wool as insulating material in house construction
(roof) could be a future market for wool and has actually been proven.}

5 Marketing of „indirect goods" from sheep to rural tourists in LFAs in Germany

^{„Indirect goods" are defined as non-material goods produced
by animal husbandry. The consumption of these goods is done by viewing
(taking in the beauty and the function of animals: on pastures, in stables,
while working, in parks), touching (animal stroking by children: lambs,
calves, chicks), using (horse riding, traction, guarding) or a „good feeling"
(creation of cultural rural landscape, nature protection, animal welfare).
Landscape creation and animal husbandry itself are goods which are „consumed"
by non-farmers, the society and - of course - tourists. Many LFAs in Germany
are attractive for Germans to visit for a day-trip or weekend, often for
special seasons. The „beauty" landscape and „healthy" environment,
quiet accommodation and hospitality are the main reason for visiting the
area. Families with young children coming from cities enjoy a day-trip
or a weekend for recreation in a rural environment.}

^{Animals play an important role in the attraction of many rural
area to the tourists' attitudes. Landscape and villages become alive with
animals on real farms with tractors, dogs, cats, horses and rural tradition.
It creates the ideal picture of an intact world. The expectations of the
rural tourist are being given more attention by public relations in these
regions. Beauty landscape, rural lifestyle and farming adventure holidays
are advertised by the tourist agencies.}

^{For farmers, it is difficult to market these „indirect products",
which are a side-product of their farming. Only if it is provided on farm
e.g. „holiday on farm", „domestic animal parks" or „riding farms",
does the farmer have direct connection to the tourist and his expenditures.
Not all farms, however, are willing to change to touristic acitvities,
they want to be farmers. A way of participating in the expenditures of
the tourists is the „maintainance of cultural landscape" for tourists
attraction.}

^{Landscape management with animals is only often understood in the
way of protection of endangered man-made biotope. It is, however, much
more:}

^{Animal keepers in the BR Rhön get between 300 and 700 DM per
ha and year, when they keep their animals on endangered biotopes like bristle
grass meadows or sparse pastures. In the BR Rhön these preserved biotopes
are not only important for nature protection but also provide most attractive
landscapes for tourists. For example, the Rhön sheep keeper in Ginolfs
with about 800 sheep maintain 250 ha pasture in the nature protection reserve
„Lange Rhön", which is about 63% of the total grassland (400
ha or 0,5 ha per ewe). Two thirds are pasture and grazed by sheep, one
third is meadow for hay production. He received 250 DM per ha and year
for this landscape management, which is about 62.500 DM per year in total
or about 80 DM per ewe and year. This is important additional income in
the sheep keeping, payed by the governmental nature protection offices
and base on nature protection and tourist expectations (KOLB, 1996).}

^{Besides the income from landscape management, sheep keeping in
the nature protection areas is an attraction for the numerous tourists
visiting this beauty landscape. This sheep keeper is attending this demand.
He keeps flocks in the traditional way with traditional clothes, a shepherd
dog and all the symbols tourists expect from shepherds. The marketing of
this indirect product (entertaining the tourist) is done by advertising
on television, on posters and in many books on the Rhön. This has
been done so well that he becomes the „trade mark" for the tourist
place BR Rhön. Schools and nurseries come by bus to let the children
enjoy lambs in springtime (stroking them), tourists' groups take pictures
of him and his flock, the tourist agencies market him as an attraction.
This shepherd is getting 100 DM per hour for this. The income by this activity
is not very high but is complementary to his sheep keeping (HESS, 1996).}

^{Rural tourism is a source, where local animal husbandry can find
a market without competition to other areas and countries. This market
however, has to be explored before it can be exploited. At first, there
is a need to know tourists' expectations and consumption behaviour. Secondly,
the fulfillment of these expectations is necessary. In detail it can mean
changing farming management, the way of production, the marketing of products.
One of the main restrictions and the reluctance of farmers to participate
in rural tourism is the low experience in marketing to these special clients
or they have no access to them. Co-operation with tourist agencies, hotels,
restaurants for marketing are necessary. Besides this, it has to be accepted
that rural tourism in Germany depends on the regional and rural charm,
the hospitality of the people and beauty of the landscape. This has to
be maintained by all who are interested in having a part of the income
from touristic spending.}

^{The example of an individual sheep keeper in the Rhön shows
the survival as a sheep keeper not only depends on the political frame
conditions, but also on good advertising and marketing strategies. Sheep
keeping can be an excellent enterprise even in competition to the world
market. The case of Rhön sheep keeping in the BR Rhön shows the
potential of rural tourism for rural development, particularly in marketing
of animal products in LFAs. The sheep keeper, the landscape, the nature,
the endangered old domestic breed, Rhön sheep, and the restaurants
have all gained by the joint promotion of the Rhön sheep to rural
tourists:}

^{In 1996, the Rhön flock of sheep in Ginolfs had grown to 800
and in the Rhön to 2.000 ewes. Despite the large increase in nine
years and the high price per kg, the demand is still higher than the supply.
It was a successful strategy to promote an animal product with local distinctiveness
for a high price to rural tourists.}

^{There are many such examples throughout Germany. Examples like
this show new functions and strategies for animal husbandry. Local distinctiveness
and co-operation with tourist agencies, restaurants, nature protection
offices and associations are a possible way of successful marketing of
animal husbandry in LFAs, when the area is attractive for rural tourism.
Imagination can be an advantage in sheep keeping. It was shown that sheep
have not to be cheap in marketing. There is competitive sheep production
even in LFAs and possible EU markets are open.}

^{GREBE, R./G. BAUERSCHMITT (1995): Biosphärenreservat Rhön.
Rahmenkonzept für Schutz, Pflege und Entwicklung. Radebeul}

^{HESS, R. (1996): Chairman of the „Natur- und Lebensraum Rhön
e.V.". Personal information. Wüstensachsen}

^{KEMPF, B./J.H. KRENZER (1993): Dem Rhönschaf auf der Spur.
Küche, Menschen und Landschaft der Rhön. Fulda.}

^{KOLB, J. (1996): Rhön sheep keeper in Ginolfs. Personal information.
Ginolfs}

^{KRENZER, J.H. (1996): Restaurant owner in Seiferts and initiator
of the marketing project „Aus der Rhön für die Rhön".
Personal informations. Seiferts}

^{POPP, D. (1993): Homecomers to the Rhön. New future for an
old domestic animal. Ehrenberg}

^{RAHMANN, G. (1997): Praktische Anleitungen für eine Biotoppflege
mit Nutztieren. Lich}

^{VDL (Vereinigung Deutscher Landesschafzuchtverbände) (1995):
Jahresbericht: Schafe 1994/95. Bonn}

^{ZMP (Zentrale Markt- und Preisberichtsstelle) (1996): Rückmeldung
- Lämmerpreise. 2.8.1996. Bonn}

The James Hutton Institute

LSIRD NAPLIO CONFERENCE PAPERS Contribution of rural tourism to the market for livestock products in LFAs in Germany

GEROLD RAHMANN

LSIRD NAPLIO CONFERENCE PAPERS
^{Contribution of rural tourism to the market
for livestock products in LFAs in Germany}

^{GEROLD RAHMANN}