Understanding entrepreneurial skills in the farm context (Work package 4)

Introduction

The general background for the ESoF project is the ongoing change in the environment of farm businesses. In the common agricultural policy of the EU (CAP) as well as in national policies, one response to these changes has been to call for more entrepreneurship on farms. On the one hand, political adjustments to these changes seem to lead increasingly to treating farms as firms like any other in the open market (Phillipson et al. 2004). On the other, the expectation of entrepreneurial behaviour is very explicitly directed towards farmers. This means that farmers themselves are supposed to be involved in proactive, initiative-taking, innovative and dynamic business activities.

This emphasis on entrepreneurship is understandable. Entrepreneurship is considered a crucial dynamic force in the development of small businesses in general. The structural changes in the environment of farm businesses obviously suggest that such a dynamic force is especially relevant in the present farm context. The relevance of entrepreneurship can be associated with the aim of survival of farms. Entrepreneurship is relevant because the farmers need to find ways to adapt their businesses to the changing situation. Second, the relevance of entrepreneurship may be associated with the idea that the ongoing changes embody, open up or create new opportunities for farm businesses, rather than simply narrowing down or removing previous operational conditions (Bryant 1989). From this perspective, entrepreneurship is needed to recognise and exploit these opportunities.

However, it has also been argued that instead of entrepreneurship the most essential challenge for farmers is to abandon the productivistic, or Fordist, model of production. Michael Winter (1997), for example, suggests that there is a need for farmers to unlearn productivist ways of thinking and acting, and instead to learn new skills and knowledge concerning the environmentally friendly and sustainable management of farms. He considers entrepreneurship and innovations in farm businesses as well, but ends up rejecting these by claiming that the ‘focus on the individual agent of change and on personal creativity is inadequate, not least because creativity and innovation are historically and socially contingent’ (1997, 373)

The issue concerning the role of the individual agent associated with entrepreneurship is important, and we will come back to it at the end of this article. Nevertheless, if one thinks of the strong emphasis in the CAP on the competitiveness of EU agriculture and on the efficiency and market orientation of farm businesses, or, for example, of the results of the expert interviews in the pilot stage of ESoF (de Wolf & Schoorlemmer 2007), it seems evident that entrepreneurship is widely assumed to be a highly appropriate requirement in the current farm context. For example, Swedish economist Rolf Olsson made a sound prediction in 1988 when he wrote that, ‘Managerial and entrepreneurial skills of the farmers are going to play increasingly important role in future developments in agriculture both at the farm level and in the agricultural sector as a whole’.

Some reflections of the wider structural changes are already visible at the level of farm businesses: farms are decreasing in number, while many of the remaining farms are seeking cost-effectiveness through enlargement of the scale of production or through cost reduction. Further, strategic orientations on farms are becoming more diverse: in addition to those that focus on conventional primary production, many farms add value to agricultural products through processing, direct sales and niche products, or have diversified their activities on the farm into non-agricultural businesses.

Following Porter (1980), these responses may be attributed to the use of strategies which generate competitive advantage, either in terms of low costs or differentiation. In other words, farmers are applying competitive strategies, and to be successful in this is – at least to a certain degree - a matter of skills.

The purpose of the main stage of ESoF was to increase understanding about the nature and relevance of entrepreneurial skills in the farming business. More specifically, the objective was to approach the topic in terms of assessment and development of entrepreneurial skills, and to formulate conceptual tools and methods for doing this. This chapter provides an overview of the study. It is reported more extensively in a volume edited by Vesala & Pyysiäinen (2008).