UNDERSTANDING FARMERS’ INCENTIVES TO INNOVATE IN DIFFERENT BUSINESS ENVIRONMENTS

A number of drivers of innovation in rural areas have been identified by different researchers. However, the robustness of these drivers through different business environments (i.e. stable vs. turbulent business environments) has not fully been explored so far. The objective of this article is to fill this gap by analysing farmers’ incentives to innovate before and after a policy shock referred to as the Sugar Regime reform. For this purpose, a probit econometric model was adopted and run with data obtained from a questionnaire supplied to ex-sugar beet farmers in Shropshire, UK. The results revealed that drivers of innovation may change under different business environments. Based on this result it is proposed in this article that farmers reach a steady state in stable environments where they have few incentives to innovate in order to favour long run goals. In contrast, in turbulent business environments this steady state is broken and short run drives of innovation are triggered