CHALLENGES FOR AGRICULTURAL POLICY IN THE SERVICE-DRIVEN ECONOMIC SYSTEM
DOI:
https://doi.org/10.5937/ekoPolj1804545VKeywords:
Service-driven economic system, servitization, business model, post-industrial stage, agrarian and rural development policyAbstract
During last decades the essential shift occurred in the structure of the economy from industrial product-driven to the post-industrial service-driven economic system. A growing number of manufacturing firms throughout the world are shifting from selling goods to offering more and more services alongside their products. This movement is termed the "servitization". The movement is pervading almost all industries but still is weak in agriculture. The aim of the paper is to draw an agricultural sector-specific picture of servitization and discuss the differences between the business models of product-driven and service-driven farms. Servitization of farming is a transformational process that requires rethinking all aspects of the business: production structure and methods, marketing, pricing, service delivery infrastructure and financial management. The aims and means of current agricultural policy should be transformed in accordance with the emerging new business vision of the post-industrial farmers generation. The article analyses the needs and perspectives to develop agricultural policy in line with the success factors of the service-driven economic system and highlights the main new post-industrial rural policy trends, which corresponds to the needs of new farmers generation oriented towards servitization of farming in the new programming period after 2020.
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References
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31. Vidickiene, D., Melnikiene, R. (2014). Evolution of rural policy: monograph. – Vilnius: Lithuanian Institute of Agrarian Economics. 272 p. ISBN 978-9955-481-44-7.
2. Baluch, N., Ariffn, A. S., Abas, Z., Mohtar, S. (2017) Servitization in Malaysian poultry contract farming: a critical overview, International Journal of Supply Chain Management, 6(1), 259–265.
3. Barbieri, C., Mahoney, E. (2009). Why is diversifcation an attractive farm adjustment strategy? Insights from Texas farmers and ranchers, Journal of rural studies, 25(1), 58–66.
4. Chiswell, H. M. (2014). The importance of next generation farmers: a conceptual framework to bring the potential successor into focus, Geography Compass, 8(5), 300–312.
5. Clunies-Ross, T., Hildyard, N. (2013). The politics of industrial agriculture. Routledge.
6. Cochrane, W. W. (1979). The development of American agriculture: a historical analysis. Minnesota Press.
7. Corti, D., Granados, M. H., Macchi, M., Canetta, L. (2013). Service-oriented business models for agricultural machinery manufacturers: looking forward to improving sustainability. In Engineering, Technology and Innovation (ICE) & IEEE International Technology Management Conference, June, 2013, 1–8.
8. Coster, M. (2004). Report on the role of "new generation" farmers markets. Department of Primary Industries, Bendigo, Victoria, Australia.
9. Coster, M., Kennon, N. (2005). The role of new generation farmers markets in rural communities. Rural Industries Research and Development Corporation, Australia.
10. Crozet, M., Milet E. (2017). The servitization of French manufacturing firms. In L. Fontagné and A. Harrison (eds.), The Factory-Free Economy. Outsourcing, Servitization, and the Future of Industry, Oxford University Press.
11. Fairbairn, M., Fox, J., Isakson, S.R. (2014). Introduction: new directions in agrarian political economy, Journal of Peasant Studies, 41(5), 653–666.
12. Foss, N. J., Saebi, T. (2017). Fifteen years of research on business model innovation: How far have we come, and where should we go?, Journal of Management, 43(1), 200–227.
13. Gedminaite-Raudone, Z., Vidickiene, D. Agricultural policy in the servicedriven economic system, Lithuanian Institute of Agrarian Economics. Conference "The CAP and national priorities within the EU budget after 2020", 12 June 2018, Lidzbark Warmiński, Poland.
14. Guthrie, J., Guthrie, A., Lawson, R., Cameron, A. (2006). Farmers markets: the small business counter-revolution in food production and retailing, British Food Journal, 108(7), 560–573.
15. Hamilton, N. D. (2011). Americas new agrarians: policy opportunities and legal innovations to support new farmers, Fordham Environmental Law Review, 22, 523–562.
16. Kindström, D. (2010). Towards a service-based business model – key aspects for future competitive advantage, European Management Journal, 28(6), 479–490. 17. Lightfoot, H., Baines, T., Smart, P. (2013). The servitization of manufacturing: A systematic literature review of interdependent trends, International Journal of Operations & Production Management, 33(11/12), 1408–1434.
18. Mazoyer, M., Roudart, L. A. (2006). History of world agriculture: from the Neolithic age to the current crisis. Eartscan, London/Sterling VA.
19. Organization for Economic Cooperation and Development (OECD). (2006). Rural Policy Reviews. The New Rural Paradigm: Policies and Governance. Paris, OECD.
20. Pereira, A., Carballo-Penela, A., Gonzalez-Lopez, M. I., Vence, X. (2016). A case study of servicizing in the farming-livestock sector: organisational change and potential environmental improvement, Journal of Cleaner production, 124, 84–93.
21. Pereira, A., Carballo-Penela, A., Guerra, A., Vence, X. (2018). Designing a policy package for the promotion of servicising: A case study of vineyard crop protection in Galicia (Spain), Journal of Environmental Planning and Management, 61(2), 348–369.
22. Ramaswamy, V., Ozcan, K. (2014). The co-creation paradigm. Stanford University Press.
23. Reim, W., Parida, V., Örtqvist, D. (2015). Product-service systems (PSS) business models and tactics – a systematic literature review, Journal of Cleaner Production, 97, 61–75.
24. Renting, H., Marsden, T. K., Banks, J. (2003). Understanding alternative food networks: exploring the role of short food supply chains in rural development, Environment and planning, 35(3), 393–411.
25. Suwan, P., Opatpatanakit, A. (2015). Motivations and achievements for midcareer change into farming occupation, International Journal of Agricultural Technology, 11(5), 1059–1073.
26. Uchiyama, T., Lobley, M., Errington, A., Yanagimura, S. (2008). Dimensions of intergenerational farm business transfers in Canada, England, the USA and Japan, Japanese Journal of Rural Economics, 10, 33–48.
27. Ulvenblad, P., Hoveskog, M., Tell, J. et al. (2014). Agricultural business model innovation in Swedish food production: the influence of self-leadership and lean innovation. In: Proceedings of the DRUID Society Conference on Entrepreneurship-Organization-Innovation, Copenhagen Business School.
28. Van der Ploeg, J. D., Renting, H., Brunori, G. (2000). Rural development: from practices and policies towards theory, Sociologia Ruralis, 40(4), 391–408.
29. Vandermerwe, S., Rada, J. (1988). Servitization of business: adding value by adding services, European Management Journal, 6(4), 314–324.
30. Vidickiene, D. (2018). Adapting to the needs of new farmers generation: theoretical foundations for rural policy, Public Policy and Administration, 17(1), 54–67.
31. Vidickiene, D., Melnikiene, R. (2014). Evolution of rural policy: monograph. – Vilnius: Lithuanian Institute of Agrarian Economics. 272 p. ISBN 978-9955-481-44-7.
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Published
2018-12-28
How to Cite
Vidickiene, D., & Gedminaite-Raudone, Z. (2018). CHALLENGES FOR AGRICULTURAL POLICY IN THE SERVICE-DRIVEN ECONOMIC SYSTEM. Ekonomika Poljoprivrede, 65(4), 1545–1555. https://doi.org/10.5937/ekoPolj1804545V
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Original scientific papers
