TY - GEN

T1 - Finance and corporate strategies in agriculture

AU - Hansen, Henning Otte

PY - 2020

Y1 - 2020

N2 - Politicians, economists and people in the food value chain often face a dilemma: Aconflict between economic and financial goals, on the one hand, and sustainability and environmental goals, on the other, occurs. Structural development, which is often the result of economic and financial drivers, is rather predictable, follows global trends, and is not significantly influenced by environmental shocks. This implies that it is difficult to change structural development. Therefore, political attempts to limit or change structural development will have a negative effect on farmers’ economic performance. A crucial question is whether structural development is a barrier or a tool - a problem or a solution - for sustainable farming.Organic farming, which is considered a step towards more sustainable food production, seems to follow the same long-term trends as conventional agriculture regarding productivity pressure, real price decreases and large scale production.The mainstream corporate strategy seems to be changing currently with less focus on shareholder value and increased stakeholder value, which leaves room for greater care of the environment and sustainability. However, it is assumed that globalization and the utilization of its comparative benefits will continue.The globalization trend seems to be strong. The vertical integration has become more internationalized, and international trade and investments are increasing. However, also a “localization trend” also appearing, which will become increasingly important in the consumer market. It is assumed that local and global demand can coexist.Several direct or indirect initiatives and regulations are driving corporate responsibility within sustainability. In the paper four such drivers are identified and discussed.Based on trends in agricultural structural development, drivers, changes of corporate strategies, analyzes of transitions, and policy conditions a number of main research questions and topics are identified.

AB - Politicians, economists and people in the food value chain often face a dilemma: Aconflict between economic and financial goals, on the one hand, and sustainability and environmental goals, on the other, occurs. Structural development, which is often the result of economic and financial drivers, is rather predictable, follows global trends, and is not significantly influenced by environmental shocks. This implies that it is difficult to change structural development. Therefore, political attempts to limit or change structural development will have a negative effect on farmers’ economic performance. A crucial question is whether structural development is a barrier or a tool - a problem or a solution - for sustainable farming.Organic farming, which is considered a step towards more sustainable food production, seems to follow the same long-term trends as conventional agriculture regarding productivity pressure, real price decreases and large scale production.The mainstream corporate strategy seems to be changing currently with less focus on shareholder value and increased stakeholder value, which leaves room for greater care of the environment and sustainability. However, it is assumed that globalization and the utilization of its comparative benefits will continue.The globalization trend seems to be strong. The vertical integration has become more internationalized, and international trade and investments are increasing. However, also a “localization trend” also appearing, which will become increasingly important in the consumer market. It is assumed that local and global demand can coexist.Several direct or indirect initiatives and regulations are driving corporate responsibility within sustainability. In the paper four such drivers are identified and discussed.Based on trends in agricultural structural development, drivers, changes of corporate strategies, analyzes of transitions, and policy conditions a number of main research questions and topics are identified.

M3 - Report chapter

SP - 159

EP - 183

BT - Online annexes to “Facts & Figures” reports of the 5th SCAR Foresight Exercise

PB - European Commission

ER -