The role of farms in rural business development

Abstract

In recent years the rural enterprise has become a key theme in small business research. Despite an extensive and increasingly sophisticated literature analysing rural firms, the research effort has largely excluded agnculture. This exclusion reflects a wider separation of agriculture and industry which is apparent not only in scholarship, but in the political, social and economic institutions which surround the farm sector. Although there have been persuasive arguments for a more multi-disciplinary approach to the analysis of rurality and calls for comparisons to be drawn between farms and other small businesses, few such attempts have been made and the analysis of rural business development remains charactensed by disciplinary polarity. This thesis seeks to redress this by analysing farms using conventional small business paradigms and methodologies. Three specific issues were examined: the extent to which farms conform to small business norms; the engagement of farms in additional business activities; and the differences between farms undertaking additional business activities and those maintaining monoactive approaches. The results reveal similarities between farms and other rural enterpnses and demonstrate the continued importance of farms as creators of employment and wealth in rural areas Importantly, farms are shown to have a hitherto, unrecognized role in accommodating and fostenng rural small firms in non-farm sectors. The study supports the view that multiple business ownership activities may have been under-reported in the small business research literature. Tins analysis suggests that additional business activities are best viewed as a continuum, from the diversification of existing assets to the establishment of independent and separately registered firms. Policy liberalization, demand side changes and shifts in the demographic profile of farm owners are expected to increase the number of faims engaging in additional business activities. These factors are also expected to increase the smulanties between farms and other rural enterprises. The thesis concludes that there are benefits to be gamed from the inclusion of the farm sector in small business analyses. The sector is dominated by family owned, small businesses that have largely survived the transition through generations. As such, the sector offers small business researchers a unique opportunity to analyse issues at the centre of small business debate Moreover, it is argued that a small business approach to the analysis of the farm sector offers a particularly relevant, but hitherto absent, insight into the future development of rural areas.