Agriculture and entrepreneurship

Anne Vuylsteke, Koen Carels, Dirk Van Gijseghem & Dirk Bergen

August 2009

Farmers today are regularly faced with changes related to their businesses. The European agricultural policy is systematically being reformed, the social demands in the area of agriculture evolve and the scarcity of means of production must be taken into account. Therefore, it is no longer sufficient that a business manager takes the right decisions as to production processes and business management; he will increasingly need to think in a more market-oriented way and become a real entrepreneur.

However, knowledge of rural entrepreneurship is currently very limited. Therefore, the aim of this report is to provide an overview of existing literature to make the concept a little more concrete. Our starting point is that entrepreneurs are characterised by the capacity to recognise opportunities present around them and use those opportunities to create added value for their business. As business strategy is a highly suitable instrument for this, the principles of strategic management are the basis to get more insight into the specific case of entrepreneurship in agriculture and horticulture.

The report looks at three specific elements that influence entrepreneurship in agriculture: the external surroundings, the internal factors that characterise the business and the business manager and, finally, strategy. Within the external surroundings a distinction can be made between the market and changes in the policy, on the one hand, and changes in society, on the other. The internal factors are defined by the available means of production, the production process, the type of business organisation and the business manager’s entrepreneurial skills. The business strategy is the result of a balance between strengths and weaknesses of both external and internal factors. Specifically for agriculture and horticulture a distinction can be made between four main groups of strategies: cost leadership, differentiation, focus strategies and business-oriented strategies.

However, the description of the concept of rural entrepreneurship is a first step. If we want to promote rural entrepreneurship in agriculture and horticulture in the future, we must also have an idea of the current degree of entrepreneurship in the sector. This will be analysed in a next report, although this report does touch upon the measurement of entrepreneurship. As the existing, general instruments to measure entrepreneurship are less suitable for this specific case, a tool needs to be developed for this. An instrument at company level seems most adequate. This could then be extrapolated, via a representative sample, to the entire sector.

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Vuylsteke A., Carels K., Van Gijseghem D. & Bergen D. (2009)
Landbouw en ondernemerschap
Departement Landbouw en Visserij, afdeling Monitoring en Studie, Brussel.



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