Legislature eases liability insurance cost for agritourism

The General Assembly gave Illinois agritourism businesses some relief on liability insurance costs. Lawmakers passed legislation providing agribusinesses a $1,000 state income tax credit for liability insurance premiums and forwarded the provisions along with other tax measures to Gov. J.B. Pritzker.

For years, Illinois Farm Bureau and the Illinois Specialty Growers Association have worked to address agritourism liability issues against stiff opposition from the Illinois Trial Lawyers Association (ITLA). After years of inaction due to ITLA opposition, Sen. Rachel Aud Crowe, D-Glen Carbon, and Senate President Don Harmon’s office, with help from Rep. Katie Stuart in the House, actively partnered with IFB and lobbied each chamber to deliver aid for agritourism.

Stuart, D-Edwardsville, worked to pass relief for Liberty Apple Orchard and other agritourism businesses. "It’s really important to support these small businesses," Stuart told FarmWeek. "The owners (of Liberty Orchard) and I have had numerous conversations. I understand their point of view about being outdoors (at the orchard) is the same risk as you being outdoors in your yard."

Farmers in Illinois lead the nation in soybean, corn and swine production, but some also contribute to the state’s economy by offering immersive, recreational experiences to visitors through pumpkin patches, hayrides, tree farms, petting zoos and more, Crowe said.

"As small business owners, agritourism operators truly make our state unique by attracting visitors to our communities to participate in authentic farm experiences," Crowe said. "By offering state relief to agritourism operators for liability insurance premiums, Illinois is supporting the local businesses who promote economic growth statewide and play an important role in teaching our children and families the significance of agriculture in our daily lives."

"This is huge for agritourism and local food," said Mark Raney, IFB associate director of state legislation. "A lot of people want to enjoy these activities, but liability insurance is a huge barrier into this niche market given how expensive it is."

Raney noted a recent USDA report showed 85% of agritourism businesses earn less than $25,000. "These are small businesses," he added. However, the state Trial Lawyers Association long fought efforts to provide agritourism businesses limited liability protection rather than go to court, Raney explained.

"Specialty growers are unique in that we grow fruits, vegetables and herbs for direct use by Illinois families, while also inviting our guests to enjoy a fun, educational experience on our farms," said Randy Graham, president of the Illinois Specialty Growers Association (ISGA). Because specialty growers work in agriculture and tourism, they "incur a higher liability risk than most," he noted.

Graham thanked Crowe and Stuart for understanding specialty growers’ needs and their work to ensure passage of the liability insurance tax credit. He also pointed to the partnership success of IFB and ISGA.

The legislation defines agritourism businesses that would be eligible for the liability insurance tax credit and specifies services that would not meet the law’s criteria. Raney explained qualified agritourism businesses would need certification from the Illinois Department of Agriculture after it adopts new rules.

Eligible agritourism businesses include those providing historic, cultural and on-site educational programs, tours, animal exhibitions and petting zoos, crop mazes, U-pick harvesting, horse rides, hayrides and sleighrides.

Under the law, ineligible businesses solely offer hunting, fishing, rodeos, amusement rides, off-road biking or motorized activities, outdoor recreation and serve as wedding and concert venues.

For agritourism businesses, the liability insurance is very expensive. "We hope the income tax credit will alleviate that burden," said Raghela Scavuzzo, IFB associate director of food systems development and ISGA executive director. "We hope this credit will incentivize them to continue doing business and will stimulate new agribusinesses."

This story was distributed through a cooperative project between Illinois Farm Bureau and the Illinois Press Association. For more food and farming news, visit FarmWeekNow.com.