The success of the diversified farm : resource-based view

Farms and rural areas have many specific valuable resources that can be used to create non-agricultural products and services. Most of the research regarding on-farm diversification has hitherto concentrated on business start-up or farm survival strategies. Resource allocation and also financial success have not been the primary focus of investigations as yet. In this study these specific topics were investigated i.e. resource allocation and also the financial success of diversified farms from a farm management perspective. The key question addressed in this dissertation, is how tangible and intangible resources of the diversified farm affect the financial success. This study’s theoretical background deals with resource-based theory, and also certain themes of the theory of learning organisation and other decision-making theories. Two datasets were utilised in this study. First, data were collected by postal survey in 2001 (n = 663). Second, data were collected in a follow-up survey in 2006 (n = 439). Data were analysed using multivariate data analyses and path analyses. The study results reveal that, diversified farms performed differently. Success and resources were linked. Professional and management skills affected other resources, and hence directly or indirectly influenced success per se. In the light of empirical analyses of this study, tangible and intangible resources owned by the diversified farm impacted on its financial success. The findings of this study underline the importance of skills and networks for entrepreneur(s). Practically speaking all respondents of this study used either agricultural resources for non-farm businesses or non-farm resources for agricultural enterprises. To share resources in this way was seen as a pragmatic opportunity recognised by farmers. One of the downsides of diversification might be the phenomenon of over-diversification, which can be defined as the situation in which a farm diversifies beyond its optimal limit. The empirical findings of this study reveal that capital and labour resource constrains did have adverse effects on financial success. The evidence indicates that farms that were capital and labour resource constrained in 2001 were still less profitable than their ‘no problems’ counterparts five years later.

Determinants of farmer retirement and farm succession in Finland

In the past decade, the Finnish agricultural sector has undergone rapid structural changes. The number of farms has decreased and the average farm size has increased when the number of farms transferred to new entrants has decreased. Part of the structural change in agriculture is manifested in early retirement programmes. In studying farmers exit behaviour in different countries, institutional differences, incentive programmes and constraints are found to matter. In Finland, farmers early retirement programmes were first introduced in 1974 and, during the last ten years, they have been carried out within the European Union framework for these programmes. The early retirement benefits are farmer specific and de-pend on the level of pension insurance the farmer has paid over his active farming years. In order to predict the future development of the agricultural sector, farmers have been frequently asked about their future plans and their plans for succession. However, the plans the farmers made for succession have been found to be time inconsistent. This study estimates the value of farmers stated succession plans in predicting revealed succession decisions. A stated succession plan exists when a farmer answers in a survey questionnaire that the farm is going to be transferred to a new entrant within a five-year period. The succession is revealed when the farm is transferred to a suc-cessor. Stated and revealed behaviour was estimated as a recursive Binomial Probit Model, which accounts for the censoring of the decision variables and controls for a potential correlation between the two equations. The results suggest that the succession plans, as stated by elderly farmers in the questionnaires, do not provide information that is significant and valuable in predicting true, com-pleted successions. Therefore, farmer exit should be analysed based on observed behaviour rather than on stated plans and intentions. As farm retirement plays a crucial role in determining the characteristics of structural change in agriculture, it is important to establish the factors which determine an exit from farming among eld-erly farmers and how off-farm income and income losses affect their exit choices. In this study, the observed choice of pension scheme by elderly farmers was analysed by a bivariate probit model. Despite some variations in significance and the effects of each factor, the ages of the farmer and spouse, the age and number of potential successors, farm size, income loss when retiring and the location of the farm together with the production line were found to be the most important determi-nants of early retirement and the transfer or closure of farms. Recently, the labour status of the spouse has been found to contribute significantly to individual retirement decisions. In this study, the effect of spousal retirement and economic incentives related to the timing of a farming couple s early retirement decision were analysed with a duration model. The results suggest that an expected pension in particular advances farm transfers. It was found that on farms operated by a couple, both early retirement and farm succession took place more often than on farms operated by a single person. However, the existence of a spouse delayed the timing of early retirement. Farming couples were found to co-ordinate their early retirement decisions when they both exit through agricultural retirement programmes, but such a co-ordination did not exist when one of the spouses retired under other pension schemes. Besides changes in the agricultural structure, the share and amount of off-farm income of a farm family s total income has also increased. In the study, the effect of off-farm income on farmers retirement decisions, in addition to other financial factors, was analysed. The unknown parameters were first estimated by a switching-type multivariate probit model and then by the simulated maxi-mum likelihood (SML) method, controlling for farmer specific fixed effects and serial correlation of the errors. The results suggest that elderly farmers off-farm income is a significant determinant in a farmer s choice to exit and close down the farm. However, off-farm income only has a short term effect on structural changes in agriculture since it does not significantly contribute to the timing of farm successions.

The connection between on-farm assessed welfare (A-index) and production parameters of the sows

Tämän tutkimuksen tavoitteena oli selvittää tilalla määritetyn hyvinvoinnin yhteyttä emakoiden tuotantotuloksiin. Hyvinvointia arvioitiin suomalaisen hyvinvointi-indeksin, A-indeksi, avulla. Tuotantotuloksina käytettiin kahta erilaista tuotosaineistoa, jotka molemmat pohjautuivat kansalliseen tuotosseuranta aineistoon. Hyvinvointimääritykset tehtiin 30 porsastuotantosikalassa maaliskuun 2007 aikana. A-indeksi koostuu kuudesta kategoriasta ’liikkumismahdollisuudet’, ’alustan ominaisuudet’, ’sosiaaliset kontaktit’, ’valo, ilma ja melu’, ’ruokinta ja veden saanti’ sekä ’eläinten terveys ja hoidon taso’. Jokaisessa kategoriassa on 3-10 pääosin ympäristöperäistä muuttujaa, jotka vaihtelevat osastoittain. Maksimipistemäärä osastolle on 100. Hyvinvointimittaukset tehtiin porsitus-, tiineytys- ja joutilasosastoilla. Erillisten tiineytysosastojen pienen lukumäärän takia (n=7) tilakohtaiset tiineytys- ja joutilasosastopisteet yhdistettiin ja keskiarvoja käytettiin analyyseissä. Yhteyksiä tuotokseen tutkittiin kahden eri aineiston avulla 1) Tilaraportti aineisto (n=29) muodostuu muokkaamattomista tila- ja tuotostuloksista tilavierailua edeltävän vuoden ajalta, 2) POTSIaineisto (n=30) muodostuu POTSI-ohjelmalla (MTT) muokatusta tuotantoaineistosta, joka sisältää managementtiryhmän (tila, vuosi, vuodenaika) vaikutuksen ensikoiden ja emakoiden pahnuekohtaiseen tuotokseen. Yhteyksiä analysointiin korrelaatio- ja regressioanalyysien avulla. Vaikka osallistuminen tutkimukseen oli vapaaehtoista, molempien tuotantoaineistojen perusteella tutkimustilat edustavat keskituottoista suomalaista sikatilaa. A-indeksin kokonaispisteet vaihtelivat välillä 37,5–64,0 porsitusosastolla ja 39,5–83,5 joutilasosastolla. Tilaraporttiaineistoa käytettäessä paremmat pisteet porsitusosaston ’eläinten terveys ja hoidon taso’ -kategoriasta lyhensivät eläinten lisääntymissykliä, lisäsivät syntyvien pahnueiden ja porsaiden määrää sekä alensivat kuolleena syntyneiden lukumäärää. Regressiomallin mukaan ’eläinten terveys ja hoidon taso’ -kategoria selitti syntyvien porsaiden lukumäärän, porsimisvälin pituuden sekä keskiporsimiskerran vaihtelua. Paremmat pisteet joutilasosaston ’liikkumismahdollisuudet’ kategoriasta alensivat syntyneiden pahnueiden sekä syntyneiden että vieroitettujen porsaiden lukumäärää. Regressiomallin mukaan ensikkopahnueiden osuus ja ”liikkumismahdollisuudet” kategorian pisteet selittivät vieroitettujen porsaiden lukumäärän vaihtelua. POTSI-aineiston yhteydessä kuolleena syntyneiden porsaiden lukumäärän aleneminen oli ensikoilla yhteydessä parempiin porsitusosaston ’sosiaalisiin kontakteihin’ ja emakoilla puolestaan joutilasosaston parempiin ’eläinten terveys ja hoidon taso’ pisteisiin. Kahden eri tuotantoaineiston avulla saadut tulokset erosivat toisistaan. Seuraavissa tutkimuksissa onkin suositeltavampaa käyttää Tilaraporttiaineistoja, joissa tuotokset ilmoitetaan vuosikohtaisina. Tämän tutkimuksen perusteella hyvinvoinnilla ja tuotoksella on yhteyksiä, joilla on myös merkittävää taloudellista vaikutusta. Erityisesti hyvä eläinten hoito ja eläinten terveys lisäävät tuotettujen porsaiden määrää ja lyhentävät lisääntymiskiertoa. Erityishuomiota tulee kiinnittää vapaana olevien joutilaiden emakoiden sosiaaliseen stressiin ja rehunsaannin varmistamiseen kaikille yksilöille.

Constructing and negotiating entrepreneurial agency : A social psychological approach to entrepreneurship discourse in the farm context

Entrepreneurship, understood as the autonomous, effective pursuit of opportunities regardless of resources, is currently subject to a multitude of interests, expectations, and facilitation efforts. On the one hand, such entrepreneurial agency has broad appeal to individuals in Western market democracies and resonates with their longing for an autonomous, personally tailored, meaningful, and materially rewarding way of life. On the other hand, entrepreneurship represents a tempting and increasingly popular means of governance and policy making, and thus a model for the re-organization of a variety of societal sectors. This study focuses on the diffusion and reception of entrepreneurship discourse in the context of farming and agriculture, where pressures to adopt entrepreneurial orientations have been increasingly pronounced while, on the other hand, the context of farming has historically enjoyed state protection and adhered to principles that seem at odds with aspects of individualistic entrepreneurship discourse . The study presents an interpretation of the psychologically and politically appealing uses of the notion of entrepreneurial agency , reviews the historical and political background of the current situation of farming and agriculture with regard to entrepreneurship, and examines their relationships in four empirical studies. The study follows and develops a social psychological, situated relational approach that guides the qualitative analyses and interpretations of the empirical studies. Interviews with agents from the farm sector aim to stimulate evaluative responses and comments on the idea of entrepreneurship on farms. Analysis of the interview talk, in turn, detects the variety of evaluative responses and argumentative contexts with which the interviewees relate themselves to the entrepreneurship discourse and adopt, use, resist, or reject it. The study shows that despite the pressures towards entrepreneurialism, the diffusion of entrepreneurship discourse and the construction of entrepreneurial agency in farm context encounter many obstacles. These obstacles can be variably related to aspects dealing with the individual agent, the action situation, the characteristics of the action itself, or to the broader social, institutional and cultural context. Many aspects of entrepreneurial agency, such as autonomy, personal initiative and achievement orientation, are nevertheless familiar to farmers and are eagerly related to one s own farming activities. The idea of entrepreneurship is thus rarely rejected outright. The findings highlight the relational and situational preconditions for the construction of entrepreneurial agency in the farm context: When agents demonstrate entrepreneurial agency, they do so by drawing on available and accessed relational resources characteristic of their action context. Likewise, when agents fail or are reluctant to demonstrate entrepreneurial agency, they nevertheless actively account for their situation and demonstrate personal agency by drawing on the relational resources available to them.