Innovation in agriculture and horticulture in Flanders: results of the Agricultural Monitoring Network

Joeri Deuninck, Koen Carels, Dirk Van Gijseghem & Inge Piessens

March 2008

This study is based on the results of a survey carried out among 715 agricultural and horticultural enterprises of the Flemish Farm Accountancy Data Network (LMN). The LMN is the accounting network managed by the Division for Agricultural Policy Analysis (AMS) of the Department of Agriculture and Fisheries. The aim of the study was to look at how innovative the different agricultural and horticultural sectors are, what type of innovations take place, who is involved and what the reasons are for (not) innovating. At the same time, the study wanted to examine whether there is a relation between certain characteristics of businesses and business managers and innovation.

Descriptive analysis showed that there is a difference in the number of innovations (percentage of businesses that innovate) according to company type, company size and age/succession of the manager. Horticulture (and in particular ornamental plant cultivation) is very innovative, followed by pig breeding. Cattle breeding (and in particular dairy cattle breeding) scores lowest. Arable farming and mixed businesses are in the middle range, with a higher value within mixed businesses for the combinations pigs & cattle and pigs & arable farming. Furthermore, larger businesses and younger business managers innovate relatively more, as do older business managers (> 55) with a successor.

A more thorough descriptive analysis did show that the difference according to company size and age is not present equally in all company types. In part, there is interference between company type, company size and age/succession of the business manager. These variables were therefore also included in one econometric model, a logistic regression, to get a better insight into the final impact on innovation. The results showed that company size and age/succession of the business manager had an important impact on innovation. Within the 0 to 105 interval Flemish size unit (FSU) there is a positive impact of company size on innovation. This positively increasing impact is usually more pronounced in smaller company sizes, and levels off in larger companies. Mainly business managers under 35 innovate. But there is also a positive impact for business managers between 35 and 45 and business managers older than 55 with a successor. There is also an impact of company type, although this is not statistically significant for all company types. A positive impact on innovation is especially present in the horticulture sub-sectors of ornamental plant cultivation and vegetables, and to a lesser extent pig breeding and, within horticulture, fruit growing. On the other hand, the main negative impact is that of dairy cattle breeding, followed by mixed businesses in arable farming and cattle and beef cattle businesses.

Besides the number of innovations, the degree of innovativeness (percentage of colleagues that have introduced an innovation) was studied according to company type and company size. To this end, the respondents were classified into four diffusion categories in decreasing order of innovative capacity: the respondent is either among the first to introduce the innovation, or less than 5%, between 5 and 25 percent or more than 25% of his colleagues have already introduced the innovation. Where company type is concerned, it seems that arable farming businesses generally score lower for a number of innovations, but that those who innovate have a relatively higher innovative capacity (higher percentage in the category ‘among the first’). For intensive cattle breeding (pig farms) it could be said that the reverse is true: in numbers, they innovate relatively more, but for degree of innovativeness they score relatively lower. Horticultural businesses, on the other hand, are divided into the four categories. In part, this has to do with the type of innovation. Where company size is concerned, there is also a relation with the degree of innovativeness. On the one hand, smaller businesses innovate less; on the other hand, they are relatively more often late followers and therefore have a relatively lower innovative capacity.

Innovations are classified into four types: product (17%), process (71%), market (9%) and organisational innovations (3%). In greenhouse horticulture vegetables and ornamental plant cultivation score very high (and the highest) for process innovations, fruit growing scores high (and the highest) for product innovations. Arable farming and mixed businesses also have a relatively large share in product innovations and, to a lesser extent, market innovations.

The relation between the type of innovation and the diffusion pattern (degree of innovation) is statistically significant. Most product and market innovations belong to the more innovative diffusion categories, which is logical given that 88% of market innovations are vertical expansion and 25% of product innovations are horizontal expansion. The relatively higher percentage of product and market innovations in arable farming therefore partly explains why arable farming businesses have a relatively higher innovative capacity.

The most important reasons for innovation are obtaining a higher income, improving quality, cost saving, rationalisation of labour and legislation and regulations. The factor of cost reduction (energy) is mainly present in greenhouse horticulture (vegetables and ornamental plant cultivation). Quality improvement scores relatively higher in fruit growing and ornamental plant cultivation, and the introduction of new products in fruit growing. Expanded activities are relatively more important for beef cattle, mixed cattle businesses and mixed businesses in arable farming and cattle. Large businesses generally score higher, only for expanded activities small businesses obtain a similar score.

Legislation, age/succession and insecurity are the main reasons not to innovate. Factors mentioned more often by younger business managers are a lack of financing, technical problems and a lack of knowledge. For older business managers, logically, the absence of a successor is the main reason. For large businesses, insecurity related to the legislation and the market and a lack of financing are less important than for smaller businesses.

The origin of the innovative idea is usually practical experience within one’s own business, followed at some distance by colleagues and specialist literature/trade fairs. For greenhouse horticulture businesses colleagues are the main origin. Research institutes are relatively more important in fruit growing and ornamental plant cultivation, which is a logical consequence of the presence of practical research centres. Generally speaking, especially cattle breeding (beef cattle) is rather inward-looking, whereas horticulture, and in particular ornamental plant cultivation, are more focused on others where the origin of the innovative idea is concerned.

Parallel to this, practical experience within one’s own business, colleagues and specialist literature/trade fairs are indicated as important to very important sources of information. Suppliers are relatively more important in pig breeding, and clients in ornamental plant cultivation and fruit growing and in pig breeding. Research institutions are relatively more important in dairy cattle breeding and ornamental plant cultivation. In general, pig breeding and ornamental plant cultivation are most open to sources of information outside their own businesses.

Most respondents have developed the innovation on their own. This is especially the case in cattle breeding (beef cattle) and arable farming. Only in greenhouse horticulture the majority of innovations were developed by others and adapted to the business. Ornamental plant cultivation also scores relatively high for this. Ornamental plant cultivation and greenhouse horticulture have also taken over relatively more innovations developed by others without adapting them. Pig breeding scores relatively high for innovations developed together with other parties.

If there was collaboration to develop the innovation, this was mainly with suppliers. Colleagues, service-providing companies and research institutes were also relatively important. Research institutions are especially important for ornamental plant cultivation and fruit growing, and suppliers for greenhouse horticulture, cattle and pig breeding. Service-providing companies, on the other hand, are important for pig breeding, fruit growing and greenhouse horticulture (vegetables). Generally speaking, the degree of collaboration is highest in ornamental plant cultivation and pig breeding, and lowest in cattle breeding and arable farming.

Original version:

 

 

Deuninck J., Carels K., Van Gijseghem D. & Piessens, I. (2008)
Innovatie in land- en tuinbouw in Vlaanderen: resultaten van het Landbouwmonitoringnetwerk
Departement Landbouw en Visserij, afdeling Monitoring en Studie, Brussel.

 

 


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