A methodological approach to assess the contribution of risk management to resilience of EU farming systems
This is a holistic qualitative approach that aims to assess to what extent and how risk management enables/constrains farming system resilience.
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Output Description
The development of this methodological approach was inspired by the need to address the challenges and risks facing the agricultural sector in Europe. Diverse and heterogeneous risks are inherent in European agriculture, especially those concerning environmental factors leading to losses in production, such as extreme climatic conditions, local weather extreme events and crop/animal diseases, most of them exacerbated by global climate warming. But there are also risks related to changes in trade policy, changing social preferences and market behaviours (i.e. volatility of prices, financial and macroeconomic factors, competition and connections to other sectors). Production losses and unfavourable market prices may unfold into a farms’ unfavourable income fluctuations, and as a final consequence, the farm closure. Unpredictable price movements, foremost changes in volatility, also discourage farmers to invest in productivity improvements that, in the long run, might improve the farm profitability and resilience.
Risk management becomes a necessary strategy for improving the ability of farming systems to cope with these economic, social, environmental and institutional challenges. The main assumption is that promoting and applying risk management strategies strengthen farming systems’ resilience.
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SURE-Farm distinguishes three types of resilience for farming systems:
- Robustness: the capacity of a system to resist external perturbations and to maintain previous levels of functionality without major changes to its internal elements and processes.
- Adaptability: the capacity of a system to adjust internal elements and processes in response to changing external circumstances and thereby to continue its development along the previous trajectory while maintaining all important functionalities.
- Transformability: the capacity of a system to develop or incorporate new elements and processes to a degree that changes its operational logic in order to maintain important functionalities when structural changes in the ecological, economic, or social environment make the existing system untenable or dysfunctional.
To achieve these objectives, a multi-stakeholder approach was followed considering two different regional scales:
- at the local level to involve stakeholders with experience and knowledge at the farming system level. For this purpose focus groups were held in 11 case study regions (11 farming systems) across Europe;
- at the European level to engage the participation of the stakeholders with experience and knowledge at the European level. A dedicated virtual co-creation platform was developed to enable the on-line participation of EU stakeholders across Europe.
As a result of this multi-stakeholder approach, more than 600 ideas on improving risk management strategies and 500 ideas explaining the risk management contribution to resilience have been provided by more than 80 stakeholders across Europe. Ideas were coded and categorised to reach conclusions on how to improve risk management and on the role of different actors in this context.
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Focus groups were organised in Belgium, Bulgaria, France, Germany, Italy, Poland, Romania, Spain, Sweden and the United Kingdom. Participants were asked to rank and explain the contribution of the actors involved in risk management (i.e. farmers, associations and cooperatives, financial institutions, value chain actors, research and education institutions, NGOs, consumers and the Media) to farming systems’ resilience capacities (robustness, adaptability, transformability) when implementing risk management strategies.
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Farming systems are characterised by their functions, local conditions, and actors:
- Functions: the functions are the provision of private goods (i.e. the provision of food and reasonable livelihood for people involved in farming) and public goods (i.e. maintaining natural resources in a good condition and ensuring that rural areas are attractive places for residence).
- Local conditions: the locality refers to the local agro-ecological context, climate characteristics, functions of the farming systems, and its identity.
- Actors: not only farmers, but also other stakeholders, who have a close mutual connection to farmers, are considered as relevant actors for farming system’s resilience.
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The platform was developed in two steps. The first step consisted of the selection of the most important strategies to deal with the challenges faced by the EU farming system. In a second step, stakeholders exchanged information via the platform about the strategies’ contribution to resilience capacities. The strategies can enable (positive values) or constrain (negative values) the resilience capacities, from -3 (very capacity constraining) to +3 (very capacity enabling).
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How to improve risk management:
- There are four main pathways to improve risk management in EU farming systems: 'cooperation’, ‘information flow’, ‘training and advice’, and ‘new tailored products and services’. Although many of these proposals are already implemented, stakeholders in farming systems are still calling for their improvement.
- The relative significance of the risk management improvements varies across the cases. ‘Training and advice’ were stated to be a key pathway to improve risk management in farming systems by the stakeholders in Poland and Bulgaria, but less so by stakeholders in the UK and Spain. The stakeholders in the UK and Spain suggest that new financial products tailored to the farmer’s needs would be more useful.
The role of different actors:
- Actors in farming systems enhance the three resilience capacities (robustness, adaptability and transformability). Not every resilience capacity is reinforced to the same extent. Robustness is reinforced by actors involved in risk management to the greatest extent, followed by adaptability. Transformability is reinforced to the lowest extent. This pattern has been found in every case study region.
- Not all the actors engaged in risk management strategies contribute to the resilience capacities to the same extent. Farmers, associations and cooperatives, and financial institutions are the most suitable actors to promote robustness and adaptability. While promoting transformability is primarily the role of research, educational institutions, NGOs, consumers and the media.
Contribution of risk management strategies to resilience capacities:
- Robustness is promoted the most by strategies such as ‘maintaining financial reserves’, ‘having low debts’ and ‘implementing measures to prevent pests and diseases‘. Adaptability is promoted via ‘maintaining financial reserves’ and ‘having low debts’ as well ‘learning about changes in agriculture’.
Relevance for monitoring and evaluation of the CAP
This methodological approach is very relevant for the ex ante and ex post evaluations.
For the ex ante, it can be used to assess the potential effects of risk management strategies on the resilience of farming systems and guide the selection of risk management interventions or the definition of the selection criteria or targeting mechanisms for risk management interventions that can maximise resilience.
For the ex post, it can be used to analyse the actions of different actors involved in risk management activities and how they have influenced resilience. It can help for the reflection of programme implementation and help to assess how risk management activities/tools have contributed to the resilience of farming systems.
The approach is a qualitative holistic approach that can be replicated in any context/region:
- Multi-actor, inclusive of representatives of all relevant stakeholders at the case study level and EU level. It considers the roles and views of farmers, their associations, banks and financial institutions, cooperatives and value-chain actors.
- Offers a heterogeneous view of EU agriculture, including different sectors, Member States, climates and institutional development.
- Addresses policy multi-scales, considering the EU level and the national/regional levels of each case study.
- Combines risk perceptions materialised as long-term pressures with expected shocks, giving the analysis a time dimension.
Relevance of the output per CAP Objectives
- Specific Objective 1 – Ensure a fair income for farmers
Additional output information
Data collection systems used:
- Ad-hoc data collection
Spatial scale:
- Sub-regional / local
- Regional
- National
- EU level
Associated evaluation approaches:
- Impact evaluation ex ante
- Impact evaluation ex post
Type of output:
- Methodology
Project information
Towards SUstainable and REsilient EU FARMing systems
To analyse, assess and improve the resilience and sustainability of farms and farming systems in the EU.
Specific objectives:
- Develop a framework to measure the determinants of the resilience of current and future EU agricultural systems.
- Understand farmers’ risk behavior and risk management decisions in a comprehensive way in order to develop and test a set of effective and usable risk management strategies and decision support tools.
- Develop an improved farm demographic assessment tool.
- Develop a policy resilience assessment tool to evaluate the strengths and weaknesses of the existing policy framework (in particular the CAP).
- Develop an integrated impact assessment tool to make long-term projections towards the effective delivery of private and public goods.
- Identify pathways towards resilience and non-resilience, and synthesise lessons learned to design an enabling environment and construct roadmaps for implementation, co-created with public and private actors.
Project’s timeframe: 2017 – 2021
Contacts of project holder: Miranda Meuwissen, Professor of risk management in food supply chains, Wageningen University & Research miranda.meuwissen@wur.nl
Website: SURE-Farm: https://www.surefarmproject.eu/
CORDIS database : https://cordis.europa.eu/project/id/727520
Territorial coverage: Belgium, Bulgaria, France, Germany, Italy, Poland, Romania, Spain, Sweden, The Netherlands