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Agricultural Entrepreneurship

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A
Agricultural Entrepreneurship
Thomas Lans1, Pieter Seuneke2 and
Laurens Klerkx3
1
Education and Competence Studies Group,
Wageningen University, Wageningen,
The Netherlands
2
Aeres University of Applied Sciences
Wageningen, Wageningen, The Netherlands
3
Knowledge, Technology and Innovation Group,
Wageningen University, Wageningen, The
Netherlands
Synonyms
Agricultural innovation; Entrepreneurship in
agriculture
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 liberaliza-
tion, a reduced protection of agricultural markets,
and a fast changing, more critical, society. Agri-
cultural companies increasingly have to adapt to
market changes (e.g., boycotts), changing con-
sumer habits (e.g., organic/local food), more strict
# Springer Science+Business Media LLC 2017
E.G. Carayannis (ed.), Encyclopedia of Creativity, Invention, Innovation and Entrepreneurship,
DOI 10.1007/978-1-4614-6616-1_496-2
environmental regulations, food safety and prod-
uct quality, biotechnology, big-data, value chain
integration, sustainability, and so on. These
changes have spurred new entrants, innovation,
and new cycles of entrepreneurship within
existing firms. It is recognized by politicians,
practitioners, as well as scientists that farmers
and growers increasingly require entrepreneur-
ship, besides sound management and craftsman-
ship, 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. 2016; Verhees et al. 2012).
What Is Agricultural Entrepreneurship?
But what is exactly meant by agricultural entre-
preneurship? To start, there is no fixed definition
of entrepreneurship; a wide diversity of defini-
tions 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 confus-
ing status (a position in society) with role
(behavior in a particular position) McClelland
(1967). Agricultural literature is in this perspec-
tive not helpful since it provides a multitude of
operational definitions of the agricultural entre-
preneur. Definitions about entrepreneurship are
fueled by disciplinary inheritance, for instance,
2 Agricultural Entrepreneurship
building further on the classic economist
Schumpeter (1934), or departing from the per-
sonal 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 ori-
entation), 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 entrepreneur-
ship is the identification, evaluation, and pursuit
of replace business by entrepreneurial opportuni-
ties (Shane and Venkataraman 2000). Entrepre-
neurial 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 addi-
tional greenhouses which are already up and run-
ning 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 agri-
cultural entrepreneurship.
1. It does not limit the study of agricultural entre-
preneurship to specific situations such as new
venture creation (e.g., a large group 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 spe-
cific competence, experience, and network.
3. It recognizes the importance of the broader
working environment the entrepreneur
engages in. Interpretation, understanding, add
the term evaluation here 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.
In sum, a focus on the identification and pursuit
of opportunities as the core of agricultural entre-
preneurship emphasizes the creative, alert, proac-
tive, 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 agricul-
tural entrepreneurship is whether agricultural
entrepreneurship is different from entrepreneur-
ship in nonagricultural firms. The answer is yes
and no, depending on the type of research ques-
tion and research paradigm employed (Pindado
and Sánchez 2017). Certain elements of entrepre-
neurship seem to be relatively universal, context
independent (Rauch et al. 2009) (e.g., the impor-
tance 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., entrepre-
neurial learning). For studying agricultural entre-
preneurship, the following characteristics have to
be taken into consideration:
The Agricultural Sector Historically, the agricul-
tural 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, postwar agricultural modern-
ization was very successful for its original aims, to
provide food security. However, this system did
not stimulate diversification and innovative entre-
preneurship. Farmers were trained to be crafts-
men, producing food and fibers. The
Agricultural Entrepreneurship
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 geo-
graphical location is therefore an important factor
for entrepreneurial opportunities. The opportuni-
ties 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 infrastruc-
ture and a well-developed supporting network
(Wilson 2008).
The Family Firm Agriculture is dominated by
small family farms (Gasson et al. 1988). The
family farming culture and associated logic influ-
ences agricultural entrepreneurship. Unlike gen-
eral entrepreneurs, farming families are less
driven by ideas of growth and profit maximiza-
tion. Higher priority is given to survival, preserv-
ing 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 genera-
tions in the farm, in combination with a conserva-
tive mentality, does not particularly stimulate
change and innovative thinking (Jervell 2011).
However, there are also examples of family
farms where an entrepreneurial way of thinking
has been nurtured over the years, the existence of
an “entrepreneurial legacy,” defined as the sum of
the families past entrepreneurial behavior which
shapes current views and motives of entrepreneur-
ship in the family firm (Jaskiewicz et al. 2015).
See for a recent review on family-farming the
work of Suess-Reyes and Fuetsch (2016).
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
3
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 entre-
preneurs (Seuneke and Bock 2015).
Conclusion and Future Directions
As the sections above show, agricultural entrepre-
neurship shares many characteristics of “generic”
entrepreneurship, but also has its distinct features
due to the specific context of the agricultural sec-
tor. A substantial body of literature on agricultural
entrepreneurship has emerged, discussing several
aspects of agricultural entrepreneurship. How-
ever, several avenues for research remain.
Below, we will discuss three areas for future
research in agricultural entrepreneurship.
Entrepreneurial Behavior Departing from the
perspective that farmers can take up different
roles in their work, some researchers have empha-
sized differences between farmers as purely
craftsmen (highlighting technical competence)
and more entrepreneurial farmers (emphasizes
activities such scanning the environment, identi-
fying opportunities). Although the scientific basis
for typology research in entrepreneurship is con-
troversial (Woo et al. 1991), typologies help to
group and at the same time show the diversity in
entrepreneurship. Moreover, typologies or config-
urations also have a strong basis in agricultural
research, for instance, in the concept of farming
styles (Van der Ploeg 1994). In studying the ques-
tion of more or less entrepreneurial, entrepreneur-
ial orientation (EO) (Lumpkin and Dess 2001) is a
helpful, well-established construct, originally
from general entrepreneurship research (Miller
1983) but increasingly used in agricultural entre-
preneurship 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
4 Agricultural Entrepreneurship
more proactive than competitors towards new
marketplace opportunities” (Wiklund and
Shepherd 2005). The original entrepreneurial ori-
entation construct combines three key elements of
entrepreneurial behavior, namely, innovativeness,
risk taking, and pro-activeness, originally on the
firm level (Miller 1983). The EO elements
together allow firms to identify and exploit oppor-
tunities for organizational renewal and creating
more customer value. Acknowledging that there
are indeed differences in entrepreneurial behavior
of farmers, the entrepreneurial orientation angle is
interesting to further detect drivers and conse-
quences of farmers’ entrepreneurial orientation
in a specific farming context. Drivers and conse-
quences may include performance, goals, atti-
tudes, competencies, identities, but also specific
social capital and networks. Research among
farms and horticultural growers have indeed con-
firmed the positive relationship between EO and
performance (e.g., Verhees et al. 2012), although
more specific research about underlying mecha-
nisms in different contexts is clearly needed (Lans
et al. 2016).
Entrepreneurial Experience Another interesting
research venue for agricultural entrepreneurship
comes from expertise research, showing that
expert entrepreneurs differ from novices in terms
of prior-expertise and the way they think and
make decisions (Mitchell et al. 2002). Entrepre-
neurs can be classified as nascent (thinking about
it), novice (first time out), and expert (several
business, portfolio or serial) entrepreneurs. Con-
sidering the first, largest, group, nascent, there is a
clear need for studies on the role of agricultural
education as an enabler of developing non-
traditional, entrepreneurial intentions, competen-
cies, identities, and entrepreneurial experiences
among young future farmers. Many agricultural
universities worldwide need to introduce the com-
ing decade pedagogies and curricula that lay the
foundation for entrepreneurial thinking in agricul-
ture (Hulsink et al. 2014). A salient challenge
considering that important intellectual pillars of
entrepreneurship education have their roots in
agricultural extension (see also next research
point) more than a century ago (Katz 2007).
Well-designed studies on the characteristics and
impact of such programs are necessary. Consider-
ing the second, novices, there is an interesting
group of so-called new entrances in agriculture
who have very different human and social capital
backgrounds than traditional family farmers
(Pindado and Sánchez 2017). Examples include
care farms developed from outside the agricultural
sector (Hassink et al. 2016) and urban farms
developed from the perspective of social goals
such as citizen participation or inclusion rather
than maximizing yield or product quality
(Dieleman 2016). With regard to portfolio entre-
preneurship, the third category, pioneering
research was done by Carter (1999) who, as one
of the first, framed the development of new activ-
ities (e.g., multifunctionality) by farmers as port-
folio 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). Access to good
resources alone is, however, not a guarantee for
success. It all depends on the farmers’ entrepre-
neurial abilities to access, see the potential of, and
use the resources available (Alsos et al. 2011). The
angle of portfolio entrepreneurship has already
proved to be an interesting venue for agricultural
entrepreneurship (Seuneke et al. 2013). Nonethe-
less, more insight into antecedents, consequences,
as well as enablers of this specific, but important,
type of agricultural entrepreneurship is needed.
Agricultural Entrepreneurship Support Studies
on different (emergent) types of agricultural entre-
preneurship also put direct attention to the neces-
sary support structures. The developing field of
dedicated agricultural entrepreneurship support is
a third focus point for research. Traditionally, prob-
lem solving and innovation in the agricultural sec-
tor was supported by so-called extension services,
which were often funded and provided by the state
in line with food security and agricultural modern-
ization policies. These extension services often had
a supply-push orientation and worked within a
linear paradigm of innovation (innovations devel-
oped by agricultural research were uniformly
Agricultural Entrepreneurship
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 agri-
cultural markets and the agricultural sector (earlier
mentioned phenomena like multifunctionality,
integration in production chains driven by con-
sumer demands, societal demands such as food
safety, animal welfare, and ecological sustainabil-
ity (Seuneke et al. 2013)), 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 entrepre-
neurship 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 ser-
vices 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 ade-
quate advisory networks which provide a comple-
mentary set of both technical advice and advice in
support of entrepreneurship (management, strat-
egy, finance) happens autonomously (Klerkx and
Proctor 2013). However, often farmers have diffi-
culties 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 dedi-
cated “innovation centers” or “business support
centers” have emerged, which help farmers articu-
late their entrepreneurial strategy and their entre-
preneurship and innovation support needs, search
suitable support providers and match these with
farmers, and, if needed, facilitate their further col-
laboration (Klerkx and Leeuwis 2009a). Further-
more, initiatives have sprouted which stimulate
informal networking among farmers, to share expe-
riences and learn on topics of joint interest. Some
of these initiatives explicitly aim to stimulate
5
entrepreneurial learning by challenging farmers to
pay more attention to other topics than craftsman-
ship in crop and animal management, offering, for
example, master classes by successful entrepre-
neurs from nonagricultural sectors (Klerkx and
Leeuwis 2009b). Whereas many of these initiatives
have sprouted in developed countries, also in
developing countries, there is an increasing focus
on what has been called “agripreneurship” and
correspondingly there has been an increase in
focus on how support structures can address this
topic (Poulton et al. 2010; Kilelu et al. 2017). 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
▶ Entrepreneur’s “Resource Potential,” Innovation
and Networks
▶ Entrepreneurial Capability and Leadership
▶ Entrepreneurship Policies
▶ Environmental Determinants of Entrepreneurship
▶ Female Entrepreneurship
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