Exploring the significance of entrepreneurial skills in agriculture (Work package 3)

Introduction and methodology

Entrepreneurship in agriculture is an important issue in Europe. Policy makers, researchers, farmers’ unions and advisory services are working on the development of entrepreneurship in agriculture. In this report, the question is answered why entrepreneurship is important in agriculture and what type of entrepreneurial skills farmers require. This chapter summarises the work of WP 3, the pilot stage of the ESoF project. For a detailed description, see de Wolf & Schoorlemmer (2007).

‘Entrepreneurship’ or ‘entrepreneurial skills’ are not very precisely defined concepts. Besides this, entrepreneurship research in connection with agriculture is relatively scarce. Therefore, a literature review was carried out at the start of the project (see Chapter 2) to define the concept of entrepreneurship and entrepreneurial skills in agriculture from a theoretical point of view. Entrepreneurship is considered as ‘finding ways and means to create and develop a profitable farm in a changing business environment’. Skills are defined as ‘the competences required to accomplish tasks and activities related to the farm business, which can be developed by learning and experience’. The hypothesis is that the development of entrepreneurial skills could be stimulated through changing the social and business environment and through direct influence of the farmer and his personality and capacities.

The pilot stage had the following objective: to explore the significance of entrepreneurship in agriculture in selected European countries. Because entrepreneurship is considered a major requirement for farmers successfully to survive in a changing business environment, the significance of entrepreneurship was therefore supposed to be determined largely by the trends and developments in the environment of the agricultural business. Therefore, the research focused on six research questions: 1. What are the major trends and developments in the environment of the farm business?

2. Which skills are demanded from farmers by the trends and developments in the business environment?

3. Which skills can be seen as entrepreneurial, or how could entrepreneurial skills be defined?

4. Do farmers need different skills compared to other business people?

5. What is the importance of farm strategy, in respect of the required entrepreneurial skills or in respect of skills in general?

6. Could some conclusions be drawn from a comparison of country-specific results?

These research questions were answered through analysis of data from interviews with stakeholders and experts. In these interviews two open questions were asked:

1. Which important trends and developments do you see in the operational environment of farm businesses (market, society) in your country?

2. What are the most important skills that a farmer needs in order to succeed in the farming business?

Approximately 20 experts and stakeholders from each participating country answered these two questions. The research methodology is empirical, so no scientific definitions are used in the interviews. Open questions are chosen to generate a wide range of responses. The interviewers were given a set of interview guidelines in an attempt to develop a common approach. The interview and analysis methodology is a qualitative interview technique, based on the methodology used by Buurma et al. (2003) and Stallen (2003). The interview notes were transcribed in the national language and analysed per country. The results from the interviews were clustered and finally grouped. The national results were discussed in national discussion groups, in which interviewees and other experts participated. Interviewees and discussion group participants were very interested in the results of the interviews and especially in the results from other countries. The national results are described in detail in de Wolf & Schoorlemmer (2007).

Results and discussion

The chosen research methodology worked out very well, resulting in a varied picture of trends and developments and a broad perspective on the significance of entrepreneurial skills in agriculture.

Trends

The trend question proved to be a good introduction to the skills-question, opening up the perspective of respondents. Respondents from six EU countries mentioned the following main trends, because of their expected impact on agricultural businesses:

· Globalisation of the market

· Changing EU and national policy (CAP reform 2003, access of new countries, legislation)

· Changing consumer demands

· Changing supply chain

· Changing environment

· Growing demand for functions and services

· Climate changes and

· Increasing energy prices.

At the same time, respondents mentioned some trends they identified in agriculture, such as cost reduction, scale increase, product diversification, packaging and processing of products and diversification.

Three main farm strategies can be recognised in these trends:

· Cost price reduction related to economies of scale and bulk production

· Adding value to agricultural products, related to niche markets and

· Diversification related to non-agricultural niche markets.

The response to the trend question shows that some respondents have difficulty recognising trends and developments in the external environment, because they mention trends that are visible on many farms in their country. Regarding the trends in the environment of farm businesses, it is striking that some respondents perceive mainly opportunities while others perceive mainly threats when talking about one and the same trend. A general conclusion from the trends is that the outside world is changing rapidly, which affects the way farmers do business and make decisions.