Farmers' strategies in globalization markets: Empirical results from Germany

Today the European agrofood sector is increasingly confronted with the threatsas well as the opportunities of liberalizing markets. Therefore, competitiveness on globalmarkets is becoming of paramount importance for European farmers. The challenges ofglobal markets are accompanied by a growing array of new developments in farmers'economic and political environments, such as accelerating structural changes in the farmand agribusiness sectors, a new EU agricultural policy (decoupling and cross- compliance)and new market opportunities due to the breakthrough of renewable energies. In this paperwe deal with strategic decision- making by German farmers who are confronted with newthreats and opportunities. We develop a theoretical framework of strategic farmmanagement based on the differentiation between different levels of strategicmanagement, namely corporate, competitive, functional, and cooperative strategies. Wepresent the results of a large- scale empirical study in the German state of North Rhine-Westphalia. The empirical results show that farmers employ a broad spectrum of corporate,competitive, functional and cooperative strategies to reposition their farms in the face ofchanging economic and political environments. Factor analysis reveals five dominantstrategic factors and cluster analysis five strategic groups in the region under survey. Theresults of the study allow farmers to benchmark their farms and to identify strategic gapsin the face of globalizing markets.