Entrepreneurship & Regional Development

Vol. 21, No. 2, March 2009, 213–236

Entrepreneurship and diversification on English farms: Identifying

business enterprise characteristics and change processes
Julian Clark*

University of Birmingham, Edgbaston, Birmingham, B15 2TT, UK

Despite the growing importance attached to entrepreneurship as a policy

concept in European Union (EU) agriculture, little assessment has been
made of its practical application. This paper makes a preliminary
consideration of the issues in relation to on-farm diversification. First the
literatures on agricultural diversification and innovation are reviewed to
establish entrepreneurial traits in (1) business change processes, and (2)
business enterprise characteristics. The business enterprise characteristics
are then used to identify entrepreneurial diversified businesses from a
sample of 118 agricultural enterprises in England. Some 15 entrepreneurial
farm businesses were identified and their managers interviewed to reflect on
the underlying change processes that they had adopted during 1997–2001;
the effects of diversification in terms of socio-economic benefits at business
and regional levels; and the effectiveness of agricultural business advice
services in supporting entrepreneurial behaviour. Respondents confirmed
the importance of networking processes to managing change in their
businesses. Importantly all had benefited from diversification, through
increased net income, reduced dependence on agricultural subsidies and
greater income stability during the survey period. Regional economic
benefits were more difficult to quantify, although positive employment
generating effects were evident among businesses. Importantly respondents
commented on their disengagement from sectoral extension agencies in
contrast to their enthusiastic use of generic business support. Consequently,
consideration is made of adjustments in extension and advisory provision
to enhance on-farm entrepreneurial diversification.
Keywords: entrepreneurship; diversification; agricultural change

1. Introduction
Ongoing reform of the Common Agricultural Policy (CAP) is seeking to catalyse
change in the outlook and economic behaviours of farmers across the European
Union (EU). In the face of increasing market liberalization, EU enlargement and
growing adherence in member states to neoliberal principles, policy-makers are
aiming to encourage a more entrepreneurial approach to agricultural business
management (Fischler 2004). Such an approach is already apparent among

*Email: j.r.a.clark@bham.ac.uk

ISSN 0898–5626 print/ISSN 1464–5114 online

ß 2009 Taylor & Francis
DOI: 10.1080/08985620802261559
http://www.informaworld.com
214 J. Clark

businesses that are diversifying their production into artisanal products, agro-
tourism, and environmental goods. Indeed these are precisely the activities
encouraged under the CAP’s Rural Development Regulation (RDR), introduced
in 1999 by the then European Agriculture Commissioner Franz Fischler as the
‘second pillar’ of the reformed policy (Commission of the European Communities
[CEC] 1999).
The RDR requires member states to promote the development and diversifica-
tion of rural economies through multi-annual Rural Development Plans (RDPs)
designed to directly address specific regional needs. Central to the success of RDPs in
states is appropriate diversification strategies to encourage generation and
mobilization of innovative ideas by businesses; ideas that offer the potential to
improve their economic prospects and ensure their longer-term viability. Importantly
entrepreneurial forms of on-farm agricultural diversification are regarded as
significantly improving the prospects for sustained economic performance in the
EU’s rural regions, where one-third of farmers are under-employed (CEC 1997). Thus
the policy rationale of RDPs is that potentially they can engender change such that
farmers capitalize more fully on the local/regional contexts within which they operate,
through adding value to products and developing niche markets, creating the conditions
for on-farm entrepreneurial diversification.
However I argue here that there are crucial omissions with this policy approach.
For despite the importance now attached by EU policy-makers to this form of
diversification, little attempt has been made by them to define entrepreneurship in
the agricultural sector, or to assess its opportunities and limitations as a policy
category (Atherton 2004; Meccheri and Pelloni 2006). In particular three issues are
immediately apparent. First, can entrepreneurship on farms be specified in terms of
underlying process and business enterprise characteristics? Second, what are EU
policy-makers seeking to achieve by encouraging entrepreneurial behaviours among
farmers: survival of agricultural businesses, enhanced regional economic perfor-
mance, or both? Third, can agricultural extension services meet the needs of farmers
seeking to become more entrepreneurial?
I contend that the new policy approach needs to focus more explicitly on the role
of social and human capitals if on-farm entrepreneurial diversification is to generate
positive economic benefits.1 A starting point is to define on-farm entrepreneurial
diversification. Hence the first part of this paper briefly reviews the extensive
literatures on agricultural diversification and agricultural innovation to establish
parameters for this concept in terms of (1) change processes, and (2) business
enterprise characteristics. These characteristics are then used to identify entrepre-
neurial businesses from a sample of 118 farms in England. Respondents were
interviewed to reflect on the underlying change processes they had instigated during
1997–2001; the economic effects of on-farm entrepreneurial practice on their
businesses and on regional economies; and to assess the contribution of extension
services to the entrepreneurial process. Critically the study demonstrates that
entrepreneurial behaviours arise from pervasive socio-cultural norms and attributes
of particular localities and from farmers’ own skills and experience, and that, at best,
EU policy initiatives are likely to play a modest supportive role in on-farm
entrepreneurial diversification. Consequently consideration is made of adjustments
in existing local and regional extension services to facilitate support of on-farm
entrepreneurial behaviours.
 Entrepreneurship & Regional Development 215

2. Literature review on agricultural diversification and innovation

2.1. Agricultural diversification
Initial studies identified a raft of explanatory factors including on-farm resources,
age, skills, and expertise of farmers and household succession as causal or contingent
to successful diversification (Robson, Gasson, and Hill 1987; Bromley and Hodge
1990; Fuller 1990; Brun and Fuller 1991). Prevailing agrarian ideologies accounted
for this emphasis, explaining why even in the late-1990s ‘theories of agricultural
diversification . . . had yet to be fully developed’ (Dorsey 1999, 179). So from the
1970s to mid-1980s in Europe diversification was portrayed unreflectively as a static
phenomenon, an adjunct to agricultural commodity production undertaken by a
minority of managers without the resources of land, labour, or capital to excel at
‘farming’ (Morgan and Munton 1971; Tarrant and Rex 1974; Haines and Davies 1987;
Slee 1987).
The increasing use of political-economy approaches in the mid-1980s challenged
this view. Analysis from this perspective demonstrated agriculture’s chronic supply-
demand imbalance within Europe and globally. It also provided a theoretical context
within which diversification could be examined, focused on the sector’s peripherality
to global capital accumulation (Marsden, Munton, and Whatmore 1987; Ilbery
1988). Simultaneously studies were made of the impact upon agricultural
diversification of national and international approaches to de- and re-regulation
(Goodman and Watts 1997). These clarified agriculture’s interrelationships with
other economic sectors, promoting a better understanding of agro-food production
and consumption. However, while much work implicitly referred to the notion of
networks of relations (e.g. consideration of ‘connections’, ‘interconnectedness’,
‘circuits’ among actors and attributes), the underlying process was rarely
foregrounded.
It is only recently that researchers have invoked network theories, including actor
networks (Murdoch, Marsden, and Banks 2000), commodity chains (Bonanno 1994)
and agro-food networks (van der Ploeg et al. 2000; Renting, Marsden, and Banks
2003) to analyse the scope and operation of diversified businesses and their supply
side relations. As in the business literature more generally, the networks metaphor
has attracted attention because it enables studies to move beyond static depiction of
diversification as interaction between spaces and actors ‘internal’ and ‘external’ to
businesses, to more complicit understandings that trace the path of these interactions
among and between actors, agencies, and human-physical attributes (Murdoch 2000;
Kneafsey, Ilbery, and Jenkins 2001). None the less agricultural diversification
research has still to explicitly consider how networks of relations shape the
identification and implementation of entrepreneurial business activities (i.e. process),
or whether specific business characteristics can be adduced to classify entrepreneurial
businesses. To help do so, I turn now to the parallel literature on innovation in
agriculture.

2.2. Innovation
Innovation is the commercialization of a new product, process, or practice (including
technology), or the transposition of a product, process, or practice to a new context
with beneficial commercial results (this distinguishes innovation from invention;
Cooke 1998). As the activity of entrepreneurs, innovation’s importance is as a
216 J. Clark

process instigating economic growth following recession (Schumpeter 1934; Julien

1988; Sundbo 1995, 1998). Virtually all researchers emphasize the commercial
opportunities presented by innovation, for example: ‘innovation starts with the
invention of a new element, leading to the . . . practical development of the element
for commercial use’ (Rogers 2003). A crucial distinction made by Shapiro (2002) is
that ‘real’ innovation is in fact about founding new firms which create new products,
technologies and designs. Irrespective of its cause, the recent upsurge of interest
among national and EU policy-makers in on-farm entrepreneurial diversification is
its alleged capacity to capture these commercial opportunities and their likely
positive effects for business profitability and survival.
Crucially the economics and business science literatures on innovation afford new
insights into the networked processes giving rise to agricultural diversification. Since
the CAP’s introduction almost 50 years ago European agriculture has been driven by
artificial markets seeking to maximize commodity production, with farm businesses
subject to constant interventions and stifling bureaucratic control. This so-called
productivist model of agriculture, based on interlocking national and supranational
agricultural policy structures, has extended a deadening influence over on-farm
innovation processes, making potential entrepreneurial farmers heavily reliant on
their own skills and experience bases. Thus to fashion entrepreneurial diversification
activities, farmers have had to develop networks of relations that span the micro-
and macro-business environments (that is, networks that encompass the agricultural
business’s innate skills, resources, and expertise and the business environment
external to it; Blundel 2002; Johannisson and Monsted 1997; Trott 1998; Burkinshaw
and Hagstrom 2000). These networks shape business diversification choices, such as
problem identification by farmers and their framing of novel solutions; piloting these
solutions as projects; and, if successful, implementing these projects and making
them commercially viable (Gray 2002).
Underpinning innovation thus are farmers’ own tacit understandings (derived
from their skills and experience) and their social integration with other potential
entrepreneurs and local support structures (derived from their social networks).
On this basis Jones (1972) argues that innovative farmers have identifiable
characteristics, including: working experience outside agriculture; interdependence;
educational attainment; and youth. Overall Jones describes innovative managers as
‘venturesome’, more sociable, and willing to take carefully-judged risks. Carter (1998)
and Ilbery (1988) suggest that managers with better business skills will be more able to
recognize and take advantage of an unsatisfied market demand. Gillmor (1995) adds
that personal traits, such as imagination, adaptability, determination, and enthusiasm
are beneficial to both innovation and diversification, as is a positive approach to risk-
taking. Hoy (1983) meanwhile comments that rural entrepreneurs are likely to be
independent, risk-taking, achievement-oriented, self-confident, optimistic, and hard-
working, and that their business aims are likely to focus upon creating new
employment opportunities (Burton, Rigby, and Young 1999; Organisation for
Economic Co-operation and Development [OECD] 2001; Small Business Service
[SBS] 2001; Wortman 1990).
Farmers opting to innovate place agricultural businesses upon a decision
continuum, with evolutionary pathways or trajectories shaped by networked
relations leading to a spectrum of different outcomes (Carter 1998). This suite of
processes may give rise to innovative outcomes, including on-farm entrepreneurial
 Entrepreneurship & Regional Development 217

forms of agricultural diversification, diversification, specialization, or no or little

change in the existing business profile. Active management of decisions taken along
this continuum assumes great importance, and can be both financially draining and
time-consuming (cf. Trott 1998).
As well as individual skills and expertise, entrepreneurial success is also clearly
dependent on particular intangible social and cultural attributes of regions (Bygrave
and Hofer 1991). Some localities have intrinsic qualities which apparently make
entrepreneurial business outcomes more likely, including supportive technological,
policy and institutional environments, and actors who are sympathetic to innovative
outcomes (Cooke 1998). By extension some agricultural regions may be highly
favourable for innovation processes, others receptive to them, others indifferent, and
others resistant (cf. Wiig and Wood 1997). Each of these issues has substantial
implications for EU policy-makers seeking to instil a more entrepreneurial approach
into agriculture, which I return to later.

2.3. Synthesis and identification of entrepreneurial business characteristics

A number of points arise from this brief review. First, a preoccupation in many
agricultural diversification studies is upon outcomes and end-states rather than
change-related processes, unlike the complementary literature on agricultural
innovation. By synthesizing these literatures, I argue that a more holistic view of
on-farm agricultural entrepreneurship can be elicited, focused upon how social and
natural capitals are fused in networks of relations to create new business enterprises
and opportunities. Such a view goes beyond a narrowly-based business management
conception. For importantly both literatures suggest that networks are instrumental
to the collation/evaluation of knowledge by farmers (resulting in behavioural change),
and the conversion of this knowledge into enterprises that alter business structure
(Table 1) (Curry and Winter 2000). This tends to confirm Atherton’s (2004) recent
identification of entrepreneurship both as a behaviour (i.e. being entrepreneurial), and
a state (i.e. being an entrepreneur); and as an activity that takes place ‘in multiple sites
and spaces’ (Steyaert and Katz 2004, 180).
It is reasonable therefore to assume that on-farm entrepreneurial diversification –
defined here as the creative use by farmers of diverse local assets and attributes rather
than ‘imported’ technologies as the basis of alternative activities, leading to financial

Table 1. Selected network characteristics from the agricultural diversification and

agricultural innovation literatures.

. Network type (what flows through the network, e.g. products, services, capital,
information, knowledge, employment) (Clark 2005; Clark and Jones 2006; Murdoch,
Marsden, and Banks 2000; Morris 2006).
. Spatial characteristics (e.g. horizontal (‘in locality’), vertical (‘out of locality’); singular or
multi-nodal) (Murdoch 2000).
. ‘Length’ of networks (Marsden 1998; Chell and Baines 2000; Renting, Marsden, and
Banks 2003).
. Nature of network (e.g. formal, informal, degrees of formality or informality, etc.)
(Johannison and Monsted 1997; van der Ploeg et al. 2000).
. Network cohesiveness/strength, diffuse/ephemeral (Kneafsey, Ilbery, and Jenkins 2001).
218 J. Clark

gain – is a strong reaction against the five decade-old regulatory impositions of the
CAP. Generic characteristics of CAP-supported farming include:
. The sector is no longer a substantive source of employment generation;
. agricultural management is isolated rather than an interdependent socially
cohesive activity. Across the EU, the general perception of the sector is that
it is largely separated from territorial economies;
. the great majority of EU agricultural products remain heavily subsidized.
Consequently agriculture and its associated land use patterns have tended to
fall out-of-step with local, national, and global market demand. There is
also a tendency for agricultural businesses to be relatively poorly networked
with the rest of the agri-food chain (particularly demand-side, i.e.
customers);
. agriculture is highly intensive, steered by productivist goals and dependent
on mass consumption of fossil fuels. Consequently production systems are
often implicated in environmental degradation (agrochemical pollution; soil
erosion; destruction of wildlife habitats);
. business strategy formulation is constrained by previous investment
decisions, ‘sunken capital’, and/or by embedded knowledge that assumes
the continuation of a subsidized productivist agricultural policy.
On-farm entrepreneurial characteristics might therefore include the following.
(1) Novel redeployment of the bases of agricultural production: redeployment of
land, labour and capital by farmers to increase competitiveness (e.g. renting
out of buildings for alternative uses); and/or to increase business income;
and/or sustain employment, and/or generate new employment.
(2) The adoption of a new market orientation: practices, products and processes
that increase business viability by addressing local, regional, national and/or
global demand, and/or which improve access to commercial outlets (e.g.
vente directe/farmers’ markets; niche products, including organic; greater
emphasis on ‘quality’; greater demand for seasonality).
(3) Capitalizing on endogenous resources: practices, products, and processes
which utilize and/or are based upon territorial identity or image, and/or that
mobilize local community resources; which reconnect ‘product with place’.
(4) New forms of governance: the adoption of a collective, rather than an
independent approach to solving business management problems (e.g.
machinery rings; co-operative structures, etc.) (Boekhoelt 1998).
(5) Community involvement/support: active support for new business ventures
from local communities, possibly in the form of partnerships (e.g.
‘community supported agriculture’, Pretty 1998).
(6) Management of space and natural resources: practices, products and processes
which decrease/lessen reliance upon fossil fuels, and/or that provide active
environmental management of land.
Crucially the local socio-cultural context is all-important to entrepreneurial activity, and
not all six characteristics will be equally applicable in EU regions (Labrianidis 2006).
However, this framework does suggest that generic on-farm entrepreneurial diversifi-
cation characteristics can be identified and moreover that this form of entrepreneuri-
alism is multilayered and non-sectoral, transcending traditional agricultural business
 Entrepreneurship & Regional Development 219

management. For importantly both literatures suggest that entrepreneurial activities

are fundamentally based on managers melding their personal skills and experience
with networks that mobilize disparate actors, resources, and assets (cf. Bertuglia,
Lombardo, and Nijkamp 1997; Dinis 2006). This lends some support to the idea that
entrepreneurial agricultural practice could play a more prominent role in regional
economies across Europe, as foreseen by policy-makers. I critically examine these
contentions later.

3. Methodology
In order to examine on-farm forms of entrepreneurial behaviour and potential
linkages with agricultural policy structures and extension services seeking to
encourage innovation, two methods of data collection and analysis were undertaken.
First, farm level work, comprising a survey of 118 agricultural businesses and an
in-depth case study of 15 entrepreneurial farms and their managers and, second,
work focused upon agricultural agencies and support services charged with
responsibility for encouraging on-farm agricultural diversification.
Addresses were obtained from regional offices of the UK Ministry of Agriculture,
Fisheries and Food, and comprised 500 business enterprises. Utilized agricultural
area ranged from four to 400 hectares, and, in declining order of importance, arable,
mixed arable-livestock, and livestock holdings were all represented. A stratified
sampling frame was adopted and 118 (25%) businesses agreed to be surveyed. The
75% non-response compares favourably with other similar studies in England
(Carter 1998) and was probably attributable to lack of time among respondents and
to participation in the survey being considered not relevant to core business interests.
None the less as the great majority of farm businesses in the study area were
relatively similar structurally, the reliability of results is unlikely to have been
affected.
A total of 90% of these farms were family-owned and managed businesses, with
the remainder in corporate ownership. Data was collected through face-to-face
semi-structured interviews with farmers (that is, the person responsible for
administration of the business, including diversified activities, if any), enabling a
very high response to questions to be elicited (non-responses to 55% of
questions). Where responsibility for diversified activities was held by a business
partner or spouse, these individuals were interviewed as well as the manager. Often
spouses (female or male) were instrumental in managing diversification activities on
farms, and in some cases were responsible for formulating innovative ideas behind
diversification and piloting these ideas as projects to establish market demand
and viability. Interviewees were asked to reflect on their business activities during
1997–2001 to identify significant managerial changes, including diversification. The
second part of the survey, relevant only to diversified businesses (79 businesses
or 67% of the parent population), examined economic impact on businesses and
regional economies.
In order to explore the on-farm entrepreneurial business process further, a sub-
sample of these diversified businesses were selected for more detailed case study
analysis (Quinn-Patton 2001; Yin 2003; Flyvbjerg 2006). To be eligible, diversified
businesses had to exhibit three or more of the six entrepreneurial characteristics set
out in 2.3 above, with emphasis given to the first three traits, deemed most likely to
Table 2. Characteristics of the fifteen entrepreneurial businesses.
220

% income
Business manager derived from Entrepreneurial
number (age and Land area and Diversified business diversification On-farm or locally business
educational attainment) main crop enterprise(s) activities Employment creation derived resources used characteristics

1. 45 years old. 23 ha. cereals Production of niche-marketed c. 40 1 job sustained; Market strategy based on 1, 2, 3
Tertiary and field culinary herbs. Nursery 2 part-time jobs network of local contacts
level crops for garden plants. created (horticulture) in restaurants and
retail outlets.
2. 60 years old. 90 ha. cereals Grows willow coppice for ‘about 30’ 1 full-time job Willow is derived from 1, 2, 3
Secondary power station. Has grown created (driver) local rootstocks; inspiration
level miscanthus since 1997. for growing miscanthus came
from farmer’s son.
3. 34 years old. 368 ha. arable Collects locally produced straw 53 4 full-time jobs created Locally-sourced wood 1, 2, 3
Secondary crops and wood shavings to make (1 admin; 3 labourers); shavings. Reutilized
level animal bedding products. 6 part-time farm buildings.
Lets farm cottages and
farm buildings.
4. 56 years old. 60 ha. field Specialises in reintroduction 45 2 full-time jobs created Traditional Lincolnshire 1, 2, 6
J. Clark

Secondary vegetables of traditional varieties of (administrative) varieties grown. Seed

level field vegetables. derived from local horticulture
college.
5. 48 years old. 400 ha. mixed Runs herd of pure bred c. 80 5 full-time jobs created Runs pedigree herd of 1, 2, 3, 4
Secondary arable- Lincolnshire Red Poll cattle; (3 administrative; local breed of livestock.
level. livestock grows organic vegetables; 2 labourers) Capitalized on on-farm
farm set up community archaeology archaeological resource.
site; established rural
training centre.
6. 51 years old. 200 ha. mixed Markets locally produced beer. c. 60 2 part-time jobs created Locally-sourced barley 1, 2, 3
Tertiary farm. Established nature reserves (site wardens) for beer. Nature reserves
level. for public/educational use. for unimproved calcareous
grassland; overwintering
migratory birds.
7. 56 years old. 100 ha. mixed Converting barns into holiday ‘three- 1 full-time job created Reutilized farm buildings. 1, 2, 5
Secondary farm cottages. Experimenting quarters’ (administrative) Through CSA, growing crops
level. with community supported specifically for local consumption.
agriculture (CSA) initiative.
 8. 39 years old. 110 ha. arable Converted barns into 70 1 full-time job created Reutilized farm 1, 2, 3
Secondary crops office space; in process (administrative) buildings.
level. of converting disused
crew yard. Adapted
other property for
use as a bed
and breakfast.
9. 43 years old. 4 ha. Small Produces and sells variety of ‘100%’ 1 job sustained; Relied on local capacity 1, 2, 4
Tertiary holding niche marketed cheeses. 1 full-time building courses to
level. for sheep job created provide all skills and
(administrative) expertise required for
alternative enterprise.
10. 57 years old. 261 ha. arable Markets bottled mineral water c. 60 1 full-time job created Water sourced from 1, 2, 3
Tertiary crops from an on-farm spring. Free (administrative) on-farm spring.
level. range organic poultry unit.
Converted barn to holiday
accommodation.
11. 40 years old. 100 ha. field Converted farmhouse premises ‘roughly 1 job sustained; Reutilized 1, 2
Secondary vegetables and opened a bed and 50%’ 1 part-time farm buildings.
level. breakfast. Converted job created
former stables into (administrative)
self-catering accommodation.
12. 45 years old. 60 ha. Beef Built log cabins for long-stay c. 80 1 part-time job created Cabins designed 1, 2, 3
Secondary cattle holiday lets. Caravan site for (site warden) and built by farmer.
level. short-stay touring caravans.
13. 43 years old. 73 ha. Arable Provision of activity holiday and 67 2 full-time jobs created Moved to current 1, 2, 3
Secondary and day-care facilities for 8 to (child care) location specifically
level. dairying 15 year olds to set up alternative
alongside B&B. enterprise.
14. 60 years old. 28 ha. Arable Converted three barns into c. 90þ 1 full-time job created Reutilized farm buildings. 1, 2, 3
Secondary crops bed and breakfast (labourer) Trained as architect
Entrepreneurship & Regional Development

level. accommodation. and has designed all

Opened a golf course
and is in process of converting
to organic production.
15. 52 years old. 89 ha. Dairy B&B, equestrian stables,
Secondary and beef pick-your-own soft
level. farm fruit, farm shop, restaurant.
Considering direct sale of
free range eggs.
conversions himself.
c. 60 2 full-time jobs created Range of alternative 1, 2, 3
(labourer) activities, all heavily
reliant on on-farm
resources.

Source: Author’s interview survey, 1999–2002.

221
222 J. Clark

influence farm level and regional economic performance. Some 15 ‘entrepreneurial’

diversified businesses were identified on this basis (Table 2) enabling on-farm
entrepreneurialism to be studied closely in its real-life context (Yin 2003; Lamnek
2005). This involved the completion by farmers of business diaries reflecting on the
major diversification initiatives they had undertaken during 1997–2001, which were
the subject of detailed follow-up interviews. Interviewees were asked to reflect further
on the underlying change processes adopted, and the economic effects of
entrepreneurial practice on their businesses and on regional economies; and to
assess the contribution of local extension/advisory services to instigating business
change. These diaries and interviews provided critical case studies, enabling new
insights to be developed not only of the on-farm entrepreneurial process, but also of
the linkages between entrepreneurial farmers and the regional policy interface
(Flyvbjerg 2006). It also enabled Atherton’s (2004) call for researchers to examine
how ‘enterprising activity’ is conducted to improve business performance to be
addressed directly (cf. Carter 1998; De Sousa and Busch 1998; Schmitz and
Knorringa 1999; Chell and Baines 2000).
Finally relations between farm businesses and policy extension services seeking to
promote on-farm entrepreneurial behaviours were examined through 68 semi-
structured interviews with government agencies, small business advice services and
development specialists. Organizations were identified by being cited by farmers
during the business survey. Given the ‘dead hand’ of CAP-sponsored productivist
agriculture already discussed, of particular interest here was establishing the impact
that this policy legacy might have on farmers’ use of these agencies in their
entrepreneurial businesses. While these three interlinked data collection methods
provided a powerful means for verifying the character of on-farm entrepreneurial
diversification, the insights derived do of course only provide a snapshot in time of
what is an elusive, dynamic networked process.
An English empirical study was chosen to analyse on-farm entrepreneurial
activities for three reasons. First, nationally there has been a low rate of this form
of entrepreneurship compared to other EU states, making research particularly
apposite, especially among family-owned and managed enterprises. Second, there is
considerable domestic interest in ‘reconnecting’ English agricultural businesses with
local, regional, national and global markets, and in addressing a perceived
deficiency among farmers in the business skills and ‘know-how’ necessary to
innovate (Farming and Food Commission [FFC] 2002). Third, while the English
agricultural sector has traditionally been regarded as exceptional in terms of its size
structure this has lessened with a gradual increase in the average size of operations
across the EU since 1993 (Eurostat 2007). Naturally other characteristics (e.g.
greater prevalence of agri-businesses and particular urban and rural dynamics)
remain atypical of European agriculture, but as discussed above all studies of
innovation and entrepreneurship inevitably have their own distinctive socio-cultural
and behavioural contexts, preventing any from being truly representative of
Europe.
Fieldwork was conducted in England’s East Midlands during 2001–2002. This
region was selected for its strong agricultural heritage and its track record of
diversifying (Farming and Rual Conservation Agency [FRCA] 1999). Conditions
were therefore considered favourable for examining underlying entrepreneurial
 Entrepreneurship & Regional Development 223

business processes and their effects on farm level and regional economic
performance.

4. Case study: The English East Midlands

4.1. Description of surveyed agricultural businesses
Businesses were mainly arable enterprises, virtually all (95% of the sample) family-
owned and managed, comprising a mix of rented and owned land. The only
characteristic that discriminated diversified from non-diversified businesses was that
the former were almost three times less likely to rent land than the latter. This may
reflect the difficulty tenant farmers had in diversifying, arising from legal stipulations
in farm business leasehold agreements used in England preventing use of land as
collateral and making material changes to buildings. In demographic terms, too,
there was no clear difference between managers of diversified and non-diversified
businesses. The age distribution of both groups was the same, they had similar family
compositions, and they had farmed for similar lengths of time.
Likewise there were few significant differences in levels of educational
attainment. However, a greater proportion of non-diversifiers had tertiary level
qualifications, and they were more likely to have had an agrarian education.
Amongst 35 to 45 year olds, 90% of non-diversifiers had a tertiary education,
compared to 69% of diversifiers. A total of 77% of all non-diversifiers also had an
agrarian education compared with 55% of all diversifiers. This would seem to
suggest that a tertiary level agrarian education lessened the impetus to diversify.
Some 79 businesses (67% of the sample) had diversified or were in the process of
doing so. Among this parent population of diversifiers from which the entrepreneurial
sub-set was drawn, diversification was broadly defined as any gainful on-farm activity
other than commodity production. There were 152 diversified activities distributed
among these businesses, the most common being agri-tourism, recreation, accom-
modation, and catering. The most frequently cited reasons for diversifying were:
financial (19% of respondents); employment retention or creation (18% of
respondents); exploiting new market opportunities (16%); and ensuring survival of
the business (16%; diversifiers were more strongly motivated by succession than non-
diversifiers). Diversification thus addressed a wide range of objectives, including
survival, expansion and business exit strategies.
Data also suggest some diversifications were introduced to address short-term
needs, such as selling land to improve financial liquidity, while others were indicative
of longer-term business planning. Some 86% of all respondents used existing capital
or commercial loans to finance diversification, rather than grant aid from dedicated
extension/advisory organizations.
Only 10 out of the 118 farmers had ‘never’ considered diversification and had ‘no
plans’ to do so. In order to realize on-farm diversification, respondents had, variously,
adjusted their deployment of land, labour and their use of knowledge and finance.
During 1997–2001, 10% of diversified businesses increased their land in agriculture,
while 7% decreased their holding size, possibly reflecting the instability in agricultural
land markets at this time and the variable trends among farms to consolidate or
liquidate their land asset. Some 16% of diversifiers made significant changes in their
level of on-farm employment (i.e. taking on more than 1 person in addition to family
224 J. Clark

members); 11% carried out major overhaul of their marketing systems, and 11%
altered their cropping patterns in response to changing markets. Diversified
businesses were five times more likely to have replaced or refurbished buildings
than non-diversifiers during 1997–2001, usually to improve tourist accommodation.
Significantly, off-farm employment provided an extremely minor component of
income in comparison to that contributed by on-farm diversification, chiefly because
in most cases spouses had responsibility for diversification activities.

5. Agricultural diversification, networks and economic performance

Interviews sought to elucidate the processes underpinning diversification and its
effects on business performance and the regional economy. Responses showed that
networks of relations were causal in two areas, as follows.

5.1. ‘Clarifying the local context’: identifying and developing alternative business
activities
A total of 27% of managers of diversified enterprises had previous working
experience beyond agriculture, compared to just 13% of non-diversifiers, suggesting
that diversified businesses had used existing ‘out of sector’ networks to identify
potential alternative activities. This interpretation was corroborated by the finding
that 44% of non-diversifiers cited ‘obstacles to networking’ as the main reason for
their failure to proceed. At the same time, 41% of the diversified sample had
developed services and/or production wholly unrelated to agriculture, again
suggesting the importance of ‘out of sector’ relations.

5.2. ‘From ideas to a project’: Mobilizing knowledge and resources for agricultural
diversification
Some 76% of managers of diversified businesses stated that networks of professional
and/or informal contacts were ‘essential’ to some or all aspects of their diversification
(e.g. to provide specialist advice, finance or regulatory guidance). Of these
respondents, 44% used networks to establish business opportunities or exploit new
market opportunities, confirming the importance of relations with other businesses
and potential consumers in taking diversification forward. A total of 16% also
reported that they had developed new skills and/or gained new qualifications as a
direct result of networking, while 13% had realized personal goals. This implies
networks for agricultural diversification offered significant learning opportunities for
some respondents. These networks appear to be used by diversifying managers to
mobilize resources which were not obtainable on-farm or in the immediate locality,
and hence to sustain diversification, with 43% of all diversifiers noting that their
activities had broadened their network of social contacts.

5.3. The socio-economic impact of agricultural diversification on business

performance
Over the 5-year survey period, 13% of diversified businesses reported significant
improvement in net business income from their alternative enterprises, and 60%
 Entrepreneurship & Regional Development 225

stated their income had remained constant or increased slightly, compared to just
4% and 37%, respectively, of non-diversified businesses. There were also employ-
ment gains with 54% of diversified businesses employing one or more full-time
workers and 49% employing one or more part-time workers during 1997–2001.
Another economic benefit was that these businesses were less dependent on CAP
production subsidies; 58% of diversifiers described their business as highly or very
highly subsidy dependent, compared with 94% of non-diversifiers.
The survey also revealed interesting contrasts between net business incomes and
future prospects of diversified and non-diversified businesses. Diversified farms were
better off financially than non-diversified, with 47% earning in excess of £21,000 per
year, compared with 36% of non-diversified holdings; 64% of non-diversifiers
earned less than £21,000 per year, compared with 53% of diversifiers. On the other
hand 60% of diversifiers witnessed their net business income staying the same or
improving during 1997–2001, compared with 69% of non-diversifiers over the same
period. Roughly one-third of all diversifiers and one-third of all non-diversifiers saw
their level of borrowing increasing slightly or significantly during 1997–2001.
Overall, net business income of both diversified and non-diversified businesses
was difficult to assess, for three reasons. First, some alternative business activities
were ‘one-off’, producing only a temporary benefit (for example, selling land or
converting and selling a redundant building). Second, many diversifications had only
been established for a short period; formation costs had been met, but income flows
were only beginning to rise at the time of interview. Third, some diversifications were
effectively outside the business – indeed, there were cases in which they had effectively
succeeded it. None the less, the data strongly suggests diversified businesses
experienced greater financial stability during the survey period, and had become
less dependent on CAP subsidies to support their core business activities.

5.4. Impact on the regional economy

Two barriers significantly reduced the contribution made by diversified agriculture
to the East Midlands economy. These were other micro-level changes within
businesses, and the public policy support structure facilitating diversification.
Where diversification created employment, this tended to offset jobs lost through
contraction elsewhere in the business, i.e. diversification led to job-preservation
rather than job-creation. Calculating new labour demand also proved difficult
because of the varied and complex structure of employment on surveyed farms,
many of which employed full- and/or part-time and/or casual workers, as well as
seasonal gang labour. Overall, relatively few diversifications actually created new
jobs. Moreover, diversification often led to more onerous responsibilities for
farmers: 54% noted that, once implemented, their alternative enterprises resulted in
‘much longer working hours’ than the pre-existing situation. As surveyed non-
diversified businesses put in on average 547 hours more per year into agricultural
activities than diversified businesses, this suggests that managers of diversified
businesses were spending possibly 15 to 20 hours per week on diversification.
Second, diversifiers across the region engaged in a very limited way with
agricultural extension agencies.2 Thus while 43% of diversifiers sought help from
these agencies, only 18% joined dedicated schemes set up specifically to assist them.
Part of the explanation appeared to be that managers did not consider these
226 J. Clark

organizations could offer appropriate help; 54% of all diversifiers said they needed
more comprehensive advice and information than that routinely available. There was
also a marked reluctance to seek external sources of financial investment. Thus 86%
of diversifiers relied on diverting finance from core farm business activities or on
commercial loans to underwrite projects. Only 14% of diversifiers were in receipt of
grant aid from external agencies or other funding bodies.
Again, only 30% of all diversifiers conducted market research before establishing
their diversified enterprise, while just 28% produced a business plan before
proceeding to diversify. This raises the question of how far extension and advisory
organizations provided the business management and administration skills needed
by farmers to diversify successfully.

6. The entrepreneurial business process

The survey data identified possible entrepreneurial characteristics among
diversified businesses, and demonstrated the importance of networks in empowering
on-farm entrepreneurialism, but crucially details of the process remain opaque. For
example, how do business enterprise characteristics help to underwrite entrepreneur-
ial networking? The survey also strongly indicated that on-farm agricultural
extension services and the CAP policy apparatus were viewed as inhibiting
innovation and consequently were not used by farmers because they were imbued
with productivist agricultural associations. This of course has substantial implica-
tions for EU policy initiatives seeking to encourage on-farm entrepreneurial
diversification.
To examine these two issues in more detail, 15 ‘entrepreneurial’ farmers were
identified and asked to reflect on their on-farm innovative activities during 1997–
2001 (Table 2). Significantly their farms were all family-owned and managed. To
assist their reflection managers were asked to keep business diaries in which they set
down how they had initiated their entrepreneurial activities and how these had
evolved over the 5-year period. These diaries were the focus of subsequent interviews
to tease out the complexities of on-farm entrepreneurialism.

6.1. Business change processes and business enterprise characteristics

Although there was no such thing as a ‘typical’ network, certain structural
similarities did emerge among this subset. Broadly three types of networks were
particularly important to entrepreneurial activities: those bringing farmers and
consumers together sometimes over large distances to develop diversification; those
bringing managers and regulatory bodies into contact fostering greater interdepen-
dence; and those blending together human-physical attributes. These are briefly
discussed below.
Networks bringing diverse ‘outside’ actors and knowledge ‘in’ to businesses were
identified as very important by all managers. These enabled comparison of business
resources, contexts and situations with others who had already embarked on
diversification, allowing managers to appraise whether they were well placed to
succeed and to build trust and reciprocity with external actors. As Table 1 suggests,
such networks can have considerable ‘reach’, demonstrated in the following
 Entrepreneurship & Regional Development 227

comments from a farmer reflecting on how he started his spring water bottling
enterprise:
If you listen you can normally pick up a name, and often one name leads to another.
I’ve spoken to a local farmer who’s also got a spring. And he told me about this guy up
in Scotland who’s now set up a bottling plant. And basically I went up to see him to pick
his brains. I got advice on how he’d done it, and obviously that’s better than trying to
avoid the pitfalls yourself.
Importantly this implies that entrepreneurial farmers are more receptive to joint
working than their peers and more likely to respond positively to collaborative
projects from others seeking to innovate. Certainly in this case, network construction
required the respondent to draw down knowledge from multiple sources, confirming
Marsden, Banks, and Bristow (2002, 814) contention that ‘new skills, new relation-
ships and new entrepreneurialism [are] required by managers’ for successful
diversification. Only when networks are structured can mobilization of relations
among actors and attributes begin, which in itself is highly demanding. Managers need
to combine what are often diverse regulatory, market and natural assets. In particular,
it requires them to ‘optimis[e] new social networks [with those] significant regional and
local actors who are able to facilitate [diversification]’ (Marsden, Banks, and Bristow
2002, 816); i.e. it is an intensive time-consuming process, often targeted at specific
persons within organizations. This is well conveyed by another respondent’s
description of how he sought planning approval for reutilizing farm buildings. Tact,
persuasion, negotiation and strategic design emerge as crucial in developing close
relations with regulatory actors:
best is, to use your contacts, go to someone in the planning Department you know - or
someone a friend knows. Take it [planning application] along informally; they’ll have a
look at it. They’ll tell you if it’s more or less OK: if it’s not OK, then it’s because of this,
and if you change this, then it’ll be OK. Then you go back, and you rewrite your
application. You include their thoughts, ideas – it makes it harder for them to fail you.
And when you meet again hopefully they’ll say ‘yeah, that should work’. Then there’s a
formal planning meeting but, well, you’re up and running by then.
Entrepreneurial farmers are therefore acutely aware of the regulatory context within
which their businesses are embedded, and if this instance is representative develop
sophisticated means of extracting maximum advantage from these contexts. All 15
respondents showed aptitude for combining resource assets and attributes in this way
to ensure successful diversification. However, arguably the most skilfully judged
cases were where managers used natural phenomena and the resonances they
provoke as an integral feature of their entrepreneurial activities. One interviewee
noted:
market it with their blessing, or even under their name, that’d bring the landscape and
the ridge you see there, well it dominates the holding. It’s rich in different grasses
and shrubs and wildlife and it’s where the spring originates. It’s called Bluestone Heath,
and I remember thinking that’s a promising name for [the bottled mineral water he now
sells]. And I knew Derbyshire Wildlife Trust were interested in the idea. And I thought if
I could market it with their blessing, or even under their name, that’d bring the
landscape and the nature and the economy of the business together, wouldn’t it, it’d
make for a real selling point.
This melding of man-made and natural attributes also provides a means of
reconnecting place through time. For example, one respondent’s land was adjacent
228 J. Clark

to a ruined monastery, creating a powerful sense of place that helped to crystallize his
alternative business:
the sheep graze over the ruins of Thornton Abbey and that building’s always held a
strong association for us. And early on I did some reading and found that sheep’s
cheese was last made in this county at the time of the dissolution of the monasteries.
And, chances are, one of the last places was right here. So I chose Thornton as the name
of the hard cheese.
This confirms the subtleties of entrepreneurial behaviour among the sub-sample.
Here maximum benefit has been made of physical resources within agricultural
landscapes by drawing upon historical associations to create new opportunities for
niche marketing and for adding value to conventional products. By doing so the
diversified activities of all 15 businesses had made a substantial contribution to net
business income, ranging from 30% to 100% (Table 2). Contribution to local
economies is more difficult to determine, but on average, each entrepreneurial
business created 1.4 full-time jobs (Table 2).
The sub-sample demonstrates that entrepreneurial managers use networks of
relations not only to identify and to implement innovative enterprises, but also to
engender trust with others and to constantly reappraise their business strengths,
weaknesses and marketing opportunities within wider societal and institutional
contexts. The entrepreneurial farmer thus emerges not as an isolated struggling
individual, but a member of often extensive social networks which are of decisive
significance in determining innovative success. Among the sub-sample, evidence of
the impact of age, previous work patterns, and educational attainments on
entrepreneurial behaviour was inconclusive (cf. Meccheri and Pelloni 2006). Only
three of the sub-sample had previous work experience, and educational attainment
did not appear to be a precondition for innovation. More significant was the clear
evidence of networked relations with local and ‘at a distance’ actors and agents to
micro-business development, a process crucial to successful entrepreneurship.

6.2. Contribution of local extension/advisory services to entrepreneurial business

change
Promotional work by extension agencies regionally comprised six dedicated
mechanisms for disseminating information on diversification (Table 3). In order to
judge the effectiveness of these mechanisms, managers of the 15 businesses were
asked which, if any, they had used to initiate or establish their alternative business
activities.
As Table 3 demonstrates, use of the six mechanisms was quite widespread; just
four respondents had not used them. Ten had drawn on two or more mechanisms at
some stage to assist the development of their alternative enterprise. This suggested
that promotional activities had been generally quite successful in attracting the
attention of farmers and in informing their subsequent decision-making. Table 3
shows that ‘signposting’ and incentive scheme services had been used by nine
respondents, with one-quarter participating in capacity building measures to enhance
their existing skills and capabilities in order to establish their new business ventures.
This represented an unusually high proportion when compared to all diversifiers in
the total sample whom seldom participated in training sessions. This provided
further evidence of the independence and self-reliance of entrepreneurial farmers
 Entrepreneurship & Regional Development 229

Table 3. Use made of dedicated communication mechanisms by entrepreneurial businesses*.

Business manager number 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Information provision X x X x X x x x x x x
‘Signposting’ x x x x
Incentive schemes X X x X x x
Capacity building X x x x
‘Bespoke’ assistance x
‘Best practice’ examples x
Instrumentality No No No No n.a. No No No No No No No No No No
Overall rating of all n.a. n.a. 3 2 n.a. 1 2 2 1 2 3 2 2 4 n.a.
mechanisms used
(1 ¼ poor, 4 ¼ very good)
Source: Author’s interview survey, 1999–2002.
*Defined as follows: (1) basic information provision by extension agencies on the existence
and availability of business skills advice and training regionally, delivered to businesses either
face-to-face, or via I.C.T.; (2) ‘signposting’ of agricultural business managers by extension
agencies to other agencies which might more appropriately advise them; (3) information on/
participation in incentive schemes by businesses targeting linkages with local or regional
economies; (4) the provision by extension agencies of capacity building measures for
agricultural business managers, including retraining schemes; (5) ‘bespoke’ assistance to help
agricultural businesses to start up their own business activities; and (6) the dissemination by
extension agencies of regional ‘best practice’ examples to encourage the adoption of a more
entrepreneurial approach, including demonstration farms, interactive web-based case studies,
and on-line directories of diversified agricultural businesses.

when compared with their peers, and that the more innovative were more willing to
co-operate.
Respondents were also asked to rank from 1 to 4 (1 ¼ inappropriate, 4 ¼ very
appropriate) the suitability and appropriateness of the information, advice or other
knowledge/resource they received via the relevant communication mechanism(s).
The mean score of the 11 respondents was 2.18, or a 54% (2.18/4) approval rating.
These data suggest that entrepreneurial managers had comparatively well developed
linkages with extension agencies, and that, while the effectiveness of the existing suite
of communication mechanisms is reasonably high already, there is scope for
improvement.
Crucially however, perhaps the most important finding was that none of the
respondents felt the information/resources provided were ‘instrumental’ in their
decision to take forward their entrepreneurial business activity (Table 3). Again, this
confirms that entrepreneurial managers were using sources of advice and
information in their decision-making outside the formalized agricultural extension/
support structure. Furthermore, interviews revealed sharply polarized opinions
among respondents regarding the effectiveness of particular advisory services,
specifically the comparative success, on the one hand, of generic business
organizations introduced to promote entrepreneurial approaches in agriculture,
such as the Farm Business Advisory Service (FBAS); and, on the other, the relative
failure of agricultural organizations and extension agencies, including the
Department of Environment Food and Rural Affairs (Defra) and the recently
privatised Agricultural Development and Advisory Service (ADAS).
230 J. Clark

In particular, respondents expressed frustration with the inadequate advice

available from these sectoral agencies and their lack of engagement with
entrepreneurial farmers, as the following comments reveal:
I rang the [ADAS] regional office which is a long way from here. We’re on the
southernmost edge of the north-eastern region, and that’s monitored from
Northallerton. I duly got a man from ADAS who’s based in Wales to contact me, so
that’s somewhat indicative of the difficulty of communication. And they’re talking
about cutting back on these regional centres even more. So I think the problem ADAS
has is there isn’t the infrastructure to develop this new vision for farming, if you like,
and ease the industry through the changes it’s going through at the moment.
This respondent demonstrates the need for more face-to-face contact with advisers
prior to setting up new business initiatives, and for this dialogue to continue over an
extended period, confirming contentions made in the literature that personal contact
is critically important in encouraging entrepreneurship (Howells 1999). Seven out of
the 15 interviewees said that agricultural extension organizations often did not have
the specialist knowledge and advice they needed to establish their alternative
enterprise. This opinion was trenchantly expressed by one manager:
ADAS, them are just doing a runner they are. We had two of them often in our training
group. They’d drive in for the day, stay in a nice hotel, we’d meet, one of them’d get us
lunch, and then they’d clear off. They were on a fortune for what they were actually
doing. I mean, they didn’t know their subjects. I was asking the questions, and I knew
three-quarters of the answer, and they didn’t even know the first bit. They had no depth
of knowledge.
By contrast, generic business support agencies met with a far more positive reaction,
particularly FBAS, with its provision of consultancy advice carried out on-farm.
On this point, one manager reflected:
I’ve got an EU-funded business adviser in Lincoln [from FBAS] who came in and saw
me yesterday, and I’ve got him for 12 months. So I’m actually going to use him quite
heavily, because I don’t really understand all the legislation and stuff about what we’ve
got to do. So he’s going to help a lot on those things. To be honest, he’s probably the
best bloke I’ve ever come across, because he’s actually talked to us.
Thus it appears that agricultural extension agencies are held back by their
productivist legacies from being truly effective in advising businesses on the skills
sets and entrepreneurial behaviours needed. This has major implications for the
proposed step change to a more entrepreneurial agriculture proposed by the EU,
as it is precisely these agencies that have responsibility for the dissemination of the
new policy.

7. Analysis and consequences for support of on-farm entrepreneurial diversification

While the case study suggests that entrepreneurial diversified businesses do derive
economic benefits (although regional effects are more difficult to gauge), it also
highlights two critically important interlinked issues which militate against an EU
policy seeking to encourage entrepreneurialism among farmers. First, on-farm
innovative activities depend upon informal networks and supportive social-cultural
contexts rather than formal policy networks for success, suggesting that entrepre-
neurialism is not something that can be ‘taught’ or ‘imported’ to businesses. Second,
CAP structures and associated organizations and agencies are viewed unfavourably
 Entrepreneurship & Regional Development 231

by entrepreneurial farmers. This disengagement and distrust between managers and

agricultural extension agencies may have contributed to lessening the regional
economic benefits arising from diversification.
As the Commission of the European Communities [CEC] observed in its 2003
Green Paper, to be successful ‘Entrepreneurship requires a coordinated
approach . . . Policy should embrace all the influential elements within the relevant
policy areas, to allow these to act in a mutually reinforcing way’ (CEC 2003, 22).
To examine this further, 68 semi-structured interviews were conducted with agencies,
small business advice services and development specialists in the region.
Organizations were identified by being cited by farmers during the business survey
interviews.
Based on their responses, and the theoretical approach adopted here of
understanding entrepreneurial diversification as a ‘networked’ process, two
organizational roles are identified that policy structures need to play regionally if
the new policy approach is to succeed.

7.1. Policy co-ordination

Most respondents agreed that the introduction of a regional strategy for agricultural
diversification would be beneficial. One commented:
I’m not aware of any agency that’s tasked with making diversification work in the east
Midlands. And that, of course, comes back to there being no strategy to encourage
diversification in these parts. I’m sure if you asked Defra they could produce all sorts of
bits of paper, but in practice there is very little, there is no real strategy to encourage
change in this area.
Ideally such a strategy needs to be developed by a prominent existing
organization. This would offer a bridge between the differing aims and aspirations
for diversification held by businesses, agricultural extension services, and actors
involved in regional economic development. A prime objective would be to prioritize
forms of diversification that maintain or generate jobs in the regional economy.
Certain diversification activities are better suited to this than others. As one
interviewee observed:
at present, with the economic downturn, we’ve got farmers providing contracting
services, but not setting up new businesses, and the money is really being kept in the
agricultural sector, it’s not seeping out into the local economy, not creating new jobs.
Particular diversification activities should be identified that advance economic
development goals, and that do not lead to over-representation, leading to market
saturation. A second role for the ‘policy co-ordinator’ would be to ensure much
greater integration of existing advisory and extension services. As the entrepreneurial
subset indicated, while sectoral and territorial actors play important roles in
diversification generally, the involvement of both actor sets is critical to initiating and
supporting forms of entrepreneurial diversification with employment generating
effects. Thus some phases of entrepreneurial diversification cannot proceed without
the involvement of policy practitioners closely associated with agriculture; other
phases depend on the involvement of more informal non-sectoral contacts made
socially; and some phases are reliant on both sectoral and social/territorial
involvement to ensure success.
232 J. Clark

7.2. Generic and specific business advice support

There is also a pressing need for one or a number of organizations to have an explicit
front line role in facilitating diversification, by guiding farmers through the existing
complex and often highly bureaucratic policy and administrative structure that
supports it. Guidance should not be prescriptive but instead tailored to the needs of
diversifiers depending on their progress within a networked process with
different stages. An important role for these ‘supporter’ organizations would be to
explain and facilitate policy-making and planning structures to diversifiers. The
survey found that just 14% of diversifiers were in receipt of grant aid, and only 14%
had joined relevant grant-aided schemes. Of those joining such schemes, 64% did not
find useful the advice provided by grant aid organizations.
While there are a range of communication technologies to disseminate this
information, the goal for ‘supporters’ would be to create a strong on-farm presence
(the survey reported a lack of ‘aftercare’ support – with only one in eight diversifiers
receiving a personal visit from agencies). By gaining the trust of managers,
‘supporters’ would be strongly placed to identify the diversification activity(-ies)
most appropriate to businesses in particular localities. Another important function
would be to identify potential partners for agricultural businesses from among
downstream suppliers (the survey showed only 1% of diversification has external
business partners). Supporter organizations could also elicit feedback from
diversifiers on the transparency, administrative simplicity, and usefulness of existing
policy structures and programmes, thereby ensuring their needs are reflected in the
regional strategy.
Finally, organizational support would be even more effective if resources were
available to promote diversification as a priority issue to farmers. ‘Supporters’ would
be well placed to put diversifiers in touch with other businesses that diversified into
similar activities, thus facilitating network building and the transfer of knowledge.
They would thus act more effectively as providers and disseminators of advice, and
would be well placed to encourage farmers to collaborate and possibly create
partnerships, which many interviewees cited as a factor underlying diversification
success.

8. Conclusions
This paper has considered the opportunities and limitations inherent in the EU’s
advocacy of a more entrepreneurial approach within European agriculture.
Specifically three challenges to the use of entrepreneurship in this way have been
considered. First, little attempt has been made by European policy-makers to define
what entrepreneurship means sectorally, or what characteristics an entrepreneurial
agricultural business might have. Second, no assessment has been made of the likely
impact of entrepreneurial behaviour in agriculture upon regional economic
performance. Third, the co-ordination and capacity of existing extension and support
services to address the needs of farmers seeking to become more entrepreneurial needs
more detailed consideration.
The case study offers important lessons for national and EU policy-makers
seeking to instil a more entrepreneurial outlook among farmers. First, entrepreneur-
ial characteristics can be discerned from extant business diversification and
innovation literatures which, with further refinement and attuning to local
 Entrepreneurship & Regional Development 233

circumstance, could be used to target public policy efforts to particular businesses.

Crucially however any policy directed at on farm entrepreneurship must recognize
that this process relies on pervasive socio-cultural attributes within localities,
informal networking, and the particular skills and experiences of individuals for
success. Relations between entrepreneurial farmers and agricultural policy structures
and agencies tend to be poorly developed, and traditional forms of agricultural
extension may even impede on-farm entrepreneurial diversification. Clearly therefore
a much more co-ordinated and sophisticated approach is needed seeking to facilitate
and support (as opposed to ‘teach’) on-farm entrepreneurialism. Second, the study
demonstrates that beneficial economic effects do derive from entrepreneurial
business activities. While those at the business level were readily apparent, capturing
these benefits locally and regionally is more difficult. Within the sub-sample, positive
employment generation effects were evident but the extent to which this might be
replicated regionally was not possible to quantify with certainty.
Clearly, there are important caveats in generalizing from this English study to
other European regions. The variability of EU regions, their agricultural sectors, and
the priorities of national state level policy-makers all mediate innovation processes
and entrepreneurial outcomes, chiefly by altering risk perception by business
managers (Clark 2003; Dinis 2006; Labrianidis 2006). In each case, managers will be
responding to a unique set of stimuli emerging from interaction between the micro-
and macro-business environments that they see as particularly important. Similarly,
some entrepreneurial activities may be further advanced along the decision
continuum than others, making them more ‘evolved’, and hence more easily labelled
as ‘entrepreneurial’. Likewise, businesses may be entrepreneurial for long periods,
and then enter a less innovative or dormant phase. This emphasizes the need for
further complementary work in different regulatory settings across the EU.
None the less what is abundantly clear is the need for EU and national policy-
makers to contextualize the aims of entrepreneurial businesses in an era of increased
market liberalization. Should farmers seek to valorize their own products, build
more effective links with other actors/agents within agro-food chains, contribute to
local/regional development strategies, or somehow to address all three aims? The
intrinsic nature of regions will of course shape such goals directly and indirectly, but
whatever their diversification goals farmers will need more sophisticated assistance
from advisory services than is currently available.

Notes
1. Applying the literature on industrial districts might provide a fruitful way to examine the
territorial connections between social and human capitals in agriculture; see for example
Sweeney (2001).
2. No comparison with non-diversifiers is avalable as this question was asked only of the
diversified sample.

References

Atherton, A. 2004. Unbundling enterprise and entrepreneurship: From perceptions and

preconceptions to concept and practice. The International Journal of Entrepreneurship
and Innovation 5: 121–7.
234 J. Clark

Bertuglia, C., S. Lombardo, and P. Nijkamp., eds. 1997. Innovative behaviour in space and
time. Berlin: Springer-Verlag.
Birkinshaw, J., and P. Hagstrom. 2000. The flexible firm. Oxford: Oxford University Press.
Blundel, R. 2002. Network evolution and the growth of artisanal firms: A tale of two regional
cheese makers. Entrepreneurship & Regional Development 14, no. 1: 1–30.
Boekhoelt, P. 1998. South-east Brabant as a system of innovation. In Regional innovation
systems, ed. H.-J. Braczyk, P. Cooke, and M. Heidenreich. 322–38. London: UCL Press.
Bonnano, A. 1994. The locus of policy action in a global setting. In From Columbus to Con-
Agra: The globalization of agriculture and food, ed. A. Bonnano, L. Busch,
W. Friedland, L. Gouveia, and E. Mingione. Lawrence, KA: University of Kansas
Press.
Bromley, D., and I. Hodge. 1990. Private property rights and presumptive policy entitlements:
Reconsidering the premises of rural policy. European Review of Agricultural Economics
17: 197–214.
Brun, A.H., and A.M. Fuller. 1991. Socio-economic aspects of pluriactivity in Western Europe,
Enstone: Arkleton Trust (Research).
Burton, M., D. Rigby, and T. Young. 1999. Analysis of the determinants of adoption of
organic horticultural techniques in the UK. Journal of Agricultural Economics 50: 48–63.
Bygrave, W.D., and C.W. Hofer. 1991. Entrepreneurial networks: Their emergence in Ireland
and overseas. International Small Business Journal 9: 56–74.
Carter, S. 1998. Portfolio entrepreneurship in the farm sector: Indigenous growth in rural
areas? Entrepreneurship & Regional Development 10: 17–32.
Chell, E., and S. Baines. 2000. Networking, entrepreneurship and microbusiness behaviour.
Entrepreneurship & Regional Development 12: 195–215.
Clark, J.R.A. 2003. Regional innovation systems and economic development: the promotion of
multifunctional agriculture in the English east Midlands. Unpublished PhD Thesis,
Department of Geography, University College London, UK.
Clark, J.R.A. 2005. Examining the ’New Associationalism’ in agriculture: Agro-food
diversification and multifunctional production logics. Journal of Economic Geography
5: 475–98.
Clark, J.R.A. 2006. The institutional limits to multifunctional agriculture: Sub-national
Governance and regional systems of innovation. Environment and Planning C:
Government and Policy 24: 331–49.
Commission of the European Communities [CEC]. 1997. Innovation and rural development.
LEADER observatory research report. Brussels: Commission of the European
Communities.
Commission of the European Communities [CEC]. 1999. The new rural development
policy. Elements of the political agreement of the Agriculture Council, February 22–
March 11. DG Agri Press Notice, 11 March. Brussels: Commission of the European
Communities.
Commission of the European Communities [CEC]. 2003. Green Paper: Entrepreneurship in
Europe. Based on COM (2003) 27 Final. Brussels: Commission of the European
Communities.
Cooke, P. 1998. Introduction: Origins of the concept. In Regional innovation systems, ed.
H.-J. Braczyk, P. Cooke, and M. Heidenreich. London: UCL Press.
Curry, N., and D.M. Winter. 2000. The transition to environmental agriculture in Europe:
Learning processes and knowledge networks. European Planning Studies 8: 107–21.
De Sousa, I.S.F., and L. Busch. 1998. Networks and agricultural development: The case of
soybean production and consumption in Brazil. Rural Sociology 63: 349–71.
Dinis, A. 2006. Marketing and innovation: Useful tools for competitiveness in rural and
peripheral areas. European Planning Studies 14: 9–21.
Dorsey, B. 1999. Agricultural intensification, diversification and commercial production
among small coffee growers in central Kenya. Economic Geography 75: 178–95.
 Entrepreneurship & Regional Development 235

Eurostat. 2007. Key variables by legal status of holding, size of farm (UAA) and region.
http://epp.eurostat.ec.europa.eu
Farming and Food Commission [FFC]. 2002. Farming and food: A sustainable future. Report
of the Policy Commission on the Future of Farming and Food. The Stationery Office,
London.
Farming and Rural Conservation Agency [FRCA]. 1999. East Midlands agricultural issues:
How they affect the rural economy. Lincoln: FRCA.
Fischler, F. 2004. Farming for the future: CAP reform, enlargement and the WTO. Speech to
the joint meeting event on agriculture and food at the Irish Parliament, May 11.
Flyvbjerg, B. 2006. Five misunderstandings about case study research. Qualitative Inquiry 12:
219–45.
Fuller, A.M. 1990. From part-time farming to pluriactivity: A decade of change in rural
Europe. Journal of Rural Studies 6: 361–73.
Gillmor, D.A. 1995. Diversification on farms in the development of marginal regions:
Potential opportunities and constraints. In Economic futures on the North Atlantic
Margin: Selected contributions to the Twelfth International Seminar on Marginal
Regions, ed. D.A. Gillmor, and R. Byron. 163–81. Aldershot: Avebury.
Goodman, D.E. and M. Watts., eds. 1997. Agrarian questions and global restructuring.
London: Routledge.
Gray, C. 2002. Entrepreneurship, resistance to change and growth in small firms. Journal of
Small Business and Entrepreneurship Development 9: 61–72.
Haines, M., and R. Davies. 1987. Diversifying the farm business. Oxford: BSP Professional
Books.
Howells, J. 1999. Regional systems of innovation? In Innovation policy in a global economy, ed.
D. Archibugi, J. Howells, and J. Michie. 67–93. Cambridge: Cambridge University
Press.
Hoy, F. 1983. A program for rural development from inception through implementation.
Journal of Community Development 14: 33–49.
Ilbery, B.W. 1988. Farm diversification and the restructuring of agriculture. Outlook on
Agriculture 17: 35–9.
Johannisson, B. 1995. Entrepreneurial networking in the Scandinavian context: Theoretical
and empirical positioning. Entrepreneurship & Regional Development 7: 189–92.
Johannisson, B., and M. Monsted. 1997. Contextualizing entrepreneurial networking.
International Studies of Management and Organization 27: 109–36.
Jones, G. 1972. Agricultural innovation and farmer decision-making. Decision making in
Britain: Agriculture. Bletchley: Open University.
Julien, P.A. 1988. The entrepreneur and economic theory. International Journal of Small
Business 7: 29–38.
Kneafsey, M., B. Ilbery, and T. Jenkins. 2001. Exploring the dimensions of culture economies
in rural west Wales. Sociologia Ruralis 41: 296–310.
Labrianidis, L. 2006. Fostering entrepreneurship as a means to overcome barriers to
development of rural peripheral areas of Europe. European Planning Studies 14: 3–8.
Lamnek, S. 2005. Qualitative sozialforschung. Lehrbuch. 4. Auflage. Basle: Beltz Verlag.
Marsden, T.K. 1998. New rural territories: Regulating the differentiated rural spaces. Journal
of Rural Studies 14: 107–17.
Marsden, T.K., J. Banks, and G. Bristow. 2002. The social management of rural nature:
Understanding agrarian-based rural development. Environment and Planning A 34:
809–25.
Marsden, T.K., A.R.S. Munton, and S. Whatmore. 1987. Uneven development and the
restructuring process in British agriculture. Journal of Rural Studies 3: 297–308.
Meccheri, N., and G. Pelloni. 2006. Rural entrepreneurs and institutional assistance: An
empirical study from mountainous Italy. Entrepreneurship & Regional Development 18:
371–92.
236 J. Clark

Morgan, W.B., and A.R.S. Munton. 1971. Agricultural geography. London: Methuen.
Morris, C. 2006. Negotiating the boundary between state-led and farmer approaches to
knowing nature: An analysis of UK agri-environment schemes. Geoforum 37: 113–27.
Murdoch, J. 2000. Networks – a new paradigm of rural development? Journal of Rural Studies
16: 407–19.
Murdoch, J., T.K. Marsden, and J. Banks. 2000. Quality, nature and embeddedness: Some
theoretical considerations in the context of the food sector. Economic Geography 76:
107–25.
Organization for Economic Co-operation & Development [OECD]. 2001. Best practices in
local development. Paris: OECD.
Pretty, J. 1998. The living land. London: Earthscan.
Patton, M.Q. 2001. Qualitative research and evaluation methods. 3rd ed. New York: Sage.
Renting, H., T.K. Marsden, and J. Banks. 2003. Understanding alternative food networks:
Exploring the role of short food supply chains in rural development. Environment and
Planning A 35: 393–411.
Robson, N., R. Gasson, and B. Hill. 1987. Part-time farming: Implications for farm family
income. Journal of Agricultural Economics 38: 167–91.
Rogers, E.M. 2003. Diffusion of innovations. 5th ed. New York: Simon & Schuster.
Schmitz, H. and P. Knorringa. 1999. Learning from global buyers. IDS Working Paper 100,
Institute of Development Studies, University of Sussex, Brighton.
Schumpeter, J. 1934. The theory of economic development. Cambridge, MA: Harvard
University Press.
Shapiro, C. 2002. Competition policy and innovation. OECD Science Technology and
Industries Working Paper 2002/11. OECD Directorate for Science, Technology and
Industries. Paris: OECD.
Slee, B. 1987. Alternative farm enterprises. Ipswich: Farming Press.
Small Business Service [SBS]. 2001. UK paper: Enterprise for all. London: Small Business
Centre.
Steyaert, C., and J. Katz. 2004. Reclaiming the space of entrepreneurship in society:
Geographical, discursive and social dimensions. Entrepreneurship & Regional
Development 16: 179–96.
Sundbo, J. 1995. Innovation theory: Three paradigms. Science and Public Policy 22: 399–410.
Sundbo, J. 1998. The theory of innovation: Entrepreneurs, technology and strategy.
Cheltenham: Edward Elgar.
Sweeney, G. 2001. Innovation, economic progress and the quality of life. Cheltenham: Edward
Elgar.
Tarrant, J.R., and J. Rex. 1974. Agricultural geography. Newton Abbott: David & Charles.
Trott, P. 1998. Innovation management and new product development. London: FT/Pitman.
van der Ploeg, J.D., H. Renting, G. Brunori, K. Knickel, J. Mannion, T.K. Marsden,
K. Roest, E. Sevilla-Guzman, and F. Ventura. 2000. Rural development: from
practices and policies towards theory. Sociologia Ruralis 40: 391–408.
Wiig, H., and M. Wood. 1997. What comprises a regional innovation system? Theoretical base
and indicators. In Innovation, networks and learning regions? ed. J. Simmie. London:
Regional Studies Association/Jessica Kingsley Publishers.
Wortman, M.S. 1990. Rural entrepreneurship research: An integration into the entrepreneur-
ship field. Agribusiness 6: 329–44.
Yin, R.K. 2002. Applied social research method series, Vol. 5. Case study research. Design and
methods. 3rd ed. Thousand Oaks, CA: Sage.
Yin, R.K. 2003. Applied social research method series, Vol. 5. Case study research. Design and
methods. 3rd ed. Thousand Oaks, CA: Sage.