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Agricultural Entrepreneurship

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DOI: 10.1007/978-1-4614-3858-8_496

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Dr. Thomas Lans, Dr. Pieter Seuneke and Prof. Laurens Klerkx
Agricultural Entrepreneurship SpringerReference

Agricultural Entrepreneurship
Synonyms
Agricultural innovation; Entrepreneurship in agriculture

Key Concepts: Defining Agricultural Entrepreneurship

Why Agricultural Entrepreneurship?

Traditionally, agriculture is seen as a low-tech industry with limited dynamics dominated by numerous small family firms
which are mostly focused on doing things better rather than doing new things. Over the last decade, this situation has
changed dramatically due to economic liberalization, a reduced protection of agricultural markets, and a fast changing,
more critical, society. Agricultural companies increasingly have to adapt to the vagaries of the market, changing consumer
habits, enhanced environmental regulations, new requirements for product quality, chain management, food safety,
sustainability, and so on. These changes have cleared the way for new entrants, innovation, and portfolio
entrepreneurship. It is recognized by politicians, practitioners as well as scientists that farmers and growers increasingly
require entrepreneurship, besides sound management and craftsmanship, to be sustainable in the future (McElwee 2008;
Pyysiäinen et al. 2006). Recent studies show that agricultural entrepreneurship is not only wishful thinking or a new hype:
it has a profound impact on business growth and survival (Lans et al. 2011; Verhees et al. 2011).

What Is Agricultural Entrepreneurship?

But what is exactly meant by agricultural entrepreneurship? To start, there is no fixed definition of entrepreneurship; a
wide diversity of definitions can be found. In daily language, the term "entrepreneur" is often interchangeably used with
business owner, starter, someone who is self-employed, sole-trader, or farmer, thereby confusing status (a position in
society) with role (behavior in a particular position) McClelland (1967). Agricultural literature is in this perspective not
helpful since it provides a multitude of operational definitions of the agricultural entrepreneur. Definitions about
entrepreneurship are fuelled by disciplinary inheritance, for instance, building further on the classic economist
Schumpeter (1934), or departing from the personal psychologist McClelland (1967).
Many attempts have been made to establish some clarity in this semantic confusion in order to provide the field of
entrepreneurship its own distinct signature. Definitions of entrepreneurship have moved from a focus on individual traits
(e.g., local of control, need for achievement), toward entrepreneurial behavior (e.g., entrepreneurial orientation),
cognitions (e.g., decision making) and social capital (e.g., networks). Over the last decade, there has been a growing
consensus that a fundamental, distinctive feature of entrepreneurship is the identification, evaluation, and pursuit of
business opportunities (Shane and Venkataraman 2000). Entrepreneurial opportunities differ from normal possibilities to
optimize the efficiency of existing products in the sense that the former involves new means-ends relationships (Shane
and Venkataraman 2000). It means that the obtainment of a larger milk quota or the acquisition of additional greenhouses
which are already up and running are not considered as true entrepreneurial opportunities. There are several arguments
that can be put forward why the opportunity definition as an overarching definition is attractive for agricultural
entrepreneurship.

1. It does not limit the study of agricultural entrepreneurship to specific situations such as new venture creation (e.g.,
most of the agricultural businesses are already in existence for decades).
2. Learning and development are the heart of entrepreneurship: The fact that some farmers exploit entrepreneurial
opportunities and others do not is not due to lack of certain personality traits, but due to (the lack) of specific
competence, and experience.
3. It recognizes the importance of the broader working environment the entrepreneur engages in. Interpretation,
understanding and creativity, core processes in opportunity development process, all do not happen in isolation,
but are influenced by, for instance, the farmer's wife, employees, competitors, network, and chain partners or
extension services.

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In sum, a focus on the identification and pursuit of opportunities as the core of agricultural entrepreneurship emphasizes
the creative, alert, proactive, and networking aspects of entrepreneurial activity (DeTienne and Chandler 2004). It enables
researchers to shift from the question "who is the entrepreneur?" to the question "what does the entrepreneur do?"
(Gartner 1989), thus helping to avoid the conceptual swamp of defining the "true" entrepreneur.

Open-Ended Issues
Is Agricultural Entrepreneurship Different from "Normal" Entrepreneurship?

A classic question posed in debates about agricultural entrepreneurship is whether agricultural entrepreneurship is
different from entrepreneurship in nonagricultural firms. The answer is yes and no, depending on the type of research
question and research paradigm employed. Certain elements of entrepreneurship seem to be relatively universal, context
independent (Rauch et al. 2009) (e.g., the importance of opportunities, pro-activeness, risk taking, and entrepreneurial
self-efficacy), other elements are more dependent on the type and context of entrepreneurship (Lans et al. 2008) (e.g.,
entrepreneurial learning). For studying agricultural entrepreneurship, the following characteristics have to be taken into
consideration:
The agricultural sector. Historically, the agricultural working setting did not necessarily educe entrepreneurial behavior.
Over the last 50 years, in many western countries, agriculture became a highly specialized domain focused on efficiency
and productivity (Van der Ploeg et al. 2002). For instance, in Europe, post-war agricultural modernization was very
successful for its original aims, to provide food security. However, this system did not stimulate diversification and
innovative entrepreneurship. Farmers were trained to be craftsmen, producing food and fibers. The development of an
entrepreneurial identity, skills, and behavior are, consequently, not self-evident (Vesala et al. 2007).
The direct farm environment. Farms are strongly regionally embedded: A convenient geographical location is therefore an
important factor for entrepreneurial opportunities. The opportunities to develop new activities are much bigger when the
family farm is located in an attractive region with other businesses, close to urbanized areas (providing a market), with
good infrastructure and a well-developed supporting network (Wilson 2008).
The family firm. Agriculture is dominated by small family farms (Gasson et al. 1998). The family farming culture and
associated logic influences agricultural entrepreneurship. Unlike general entrepreneurs, farming families are less driven
by ideas of growth and profit maximization. Higher priority is given to survival, preserving family heritage, autonomy, rural
lifestyle, and passing through a healthy farm on to the next generation (Jervell 2011). Moreover, family farms are passed
on through from father to son. This selection process creates communities lacking heterogeneity with a strong tension
toward conformity. The presence of other generations in the farm, in combination with a conservative mentality, does not
particularly stimulate change and innovative thinking (Jervell 2011).
Gender. Farm women play an important role in agricultural entrepreneurship. Farm women are, in many cases, the ones
who initiate and develop new on-farm business activities (Bock 2004). The initial entrepreneurial behaviors of farm
women are characterized by "fitting in and multitasking." Typically, farm women start by fitting their new activities into the
existing farm and combine entrepreneurship with existing farm and family duties (Bock 2004). However, farm women
change their strategy over time and develop themselves as more expert entrepreneurs: investing in further development,
taking risks and identifying, and presenting themselves as entrepreneurs (Bock 2004).

Conclusion and Future Directions

As the sections above show, agricultural entrepreneurship shares many characteristics of "generic" entrepreneurship, but
also has its distinct features due to the specific context of the agricultural sector. A substantial body of literature on
agricultural entrepreneurship has emerged, discussing several aspects of agricultural entrepreneurship. However, several
avenues for research remain. Below, we will discuss four areas for future research in agricultural entrepreneurship.
Entrepreneurial Orientation (EO). EO (Lumpkin and Dess 2001) is a helpful, well-established, construct, originally from
general entrepreneurship research but increasingly used in agricultural entrepreneurship research. EO can be defined as
a farmer's "willingness to innovate to rejuvenate market offerings, take risks to try out new and uncertain products,
services and markets, and be more proactive than competitors towards new marketplace opportunities " (Wiklund and
Shepherd 2005). The original entrepreneurial orientation construct combines three key elements of entrepreneurial
behavior, namely, innovativeness, risk taking, and pro-activeness, originally on the firm level. The EO elements together

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allow firms to identify and exploit opportunities for organizational renewal and creating more customer value. Research
among farms and horticultural growers confirms the positive relationship between EO and performance (Verhees et al.
2011), although more specific research about the exact mechanism is needed (Verhees et al. 2012 (in press)).
Furthermore, the original items for measuring the EO construct have been translated to agricultural entrepreneurship by
Verhees and colleagues (2012 (in press)).
Entrepreneurial styles and roles. Although the scientific bases for typology research in entrepreneurship are controversial
(Woo et al. 1991), typologies help to group and at the same time show the diversity in entrepreneurship. Moreover,
typologies or configurations also have a strong basis in agricultural research, for instance, in the concept of farming styles
(Van der Ploeg 1994). Business owners can take on different roles depending on the specific situation, context, and
phase of the firm (Gartner 1989). Three roles can be assumed by the owner of firm, namely, the entrepreneurial,
managerial, and technical role (Chandler and Jansen 1992). Whereas the craftsmen role highlights technical competence
(i.e., green fingers, agronomy, crop protection), the entrepreneurial role emphasizes activities such as identifying
customer needs, scanning the environment, identifying opportunities, formulating strategies, networking and collaboration,
taking initiative and risks (Lans et al. 2011). At present, there are many studies in agriculture focusing on necessary
knowledge, skill, and competence in the entrepreneurial role (Pyysiäinen et al. 2006; Lans et al. 2010).
Nascent, novice, and expert entrepreneurs. A third helpful angle for studying agricultural entrepreneurship comes from
expertise research, showing that expert entrepreneurs differ from novices in the way they deal with new situations (Baron
and Ensley 2006). Entrepreneurs can be classified as nascent (thinking about it), novice (first time out), and expert
(several business, portfolio or serial) entrepreneurs. Pioneering research in this context was done by Carter ( 1999) who,
as one of the first, framed the development of new activities by farmers as portfolio entrepreneurship. Portfolio
entrepreneurs use their existing firm as a fertile basis to develop new businesses and are, hence, considered advantaged
compared to their nascent and novice counterparts, who first have to acquire their resources (Westhead et al. 2005). In
agriculture, employing new entrepreneurial activities is relatively easy because farmers generally have many useful
resources at their disposal such as: land, buildings, machinery, labor, networks, etc. Access to good resources alone is,
however, not a guarantee for success. It all depends on the farmers' entrepreneurial abilities to access, see the potential
of, and use the resources available (Alsos et al. 2011). Entrepreneurial learning plays a key role in this process (Seuneke
et al. 2012).
Agricultural entrepreneurship support. The developing field of dedicated agricultural entrepreneurship support is a fourth
focus point for research. Traditionally, problem solving and innovation in the agricultural sector was supported by
so-called extension services, which were often funded and provided by the state in line with food security and agricultural
modernization policies. These extension services often had a supply-push orientation and worked within a linear
paradigm of innovation (innovations developed by agricultural research were uniformly disseminated to farmers by
extension services), and the one-size-fits all modernization agenda neglected the heterogeneity of farming styles and
entrepreneurial styles of farmers (Van der Ploeg 1994). Because of this changing structure of agricultural markets and the
agricultural sector (earlier mentioned phenomena like multifunctionality, integration in production chains driven by
consumer demands, societal demands such as food safety, animal welfare, and ecological sustainability), a one-size-fits
all model of innovation and entrepreneurship support has become inadequate. This realization, coupled with the
privatization of applied agricultural research institutes and agricultural extension services, has induced major changes in
innovation and entrepreneurship support in agriculture. Farmers are now served by a pluralistic system of advisors (both
specialized and independent advisors, and those connected to agricultural input supply such as seeds and fertilizers)
(Klerkx and Jansen 2010). Since addressing the heterogeneous support demands of farmers includes a shift from a mere
production-technical focus toward providing services aimed at improving more generic business, management, and
entrepreneurial skills (Phillipson et al. 2004), farmers need to access different kinds of advisors. In some cases, the
formation of adequate advisory networks which provide a complementary set of both technical advice and advice in
support of entrepreneurship (management, strategy, finance) happens autonomously (Klerkx and Proctor 2013).
However, often farmers have difficulties in finding their way around in this pluralistic advisory system, and need to be
supported by an agency who acts as a broker (Phillipson et al. 2004). To this end, in recent years, several dedicated
"innovation centers" or "business support centers" have emerged, which help farmers articulate their entrepreneurial
strategy and their entrepreneurship and innovation support needs, search suitable support providers and match these
with farmers, and, if needed, facilitate their further collaboration (Klerkx and Leeuwis 2009a). Furthermore, initiatives have
sprouted which stimulate informal networking among farmers, to share experiences and learn on topics of joint interest.
Some of these initiatives explicitly aim to stimulate entrepreneurial learning by challenging farmers to pay more attention

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to other topics than craftsmanship in crop and animal management, offering, for example, master classes by successful
entrepreneurs from nonagricultural sectors (Klerkx and Leeuwis 2009b). As many of these initiatives are of recent date,
more research is needed on issues such as their form, focus, and impact on agricultural entrepreneurship skills.

Cross-References
Entrepreneurial Capability and Leadership
Entrepreneurship Policies
Environmental Determinants of Entrepreneurship
Entrepreneur's "Resource Potential," Innovation and Networks
Female Entrepreneurship

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Agricultural Entrepreneurship

Dr. Thomas Education and Competence Studies Group, Wageningen University, Wageningen,
Lans The Netherlands
Dr. Pieter
Rural Sociology Group, Wageningen University, Wageningen, The Netherlands
Seuneke
Prof. Laurens Knowledge, Technology and Innovation Group, Wageningen University,
Klerkx Wageningen, The Netherlands

DOI: 10.1007/SpringerReference_378865
URL: http://www.springerreference.com/index/chapterdbid/378865
Part of: Encyclopedia of Creativity, Invention, Innovation and Entrepreneurship

Editor: Dr. Elias G. Carayannis

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