Sensemaking and the influencing factors on farmer decision-making

The budget for the Common Agricultural Policy (CAP) is €365bn (European Commission, 2018) for 2021-2027, with the majority allocated to farmers through direct payments. Given the economic vulnerability of many farm enterprises, and the concern about the sustainability of food supply for a growing worldwide population, these payments are provided to encourage food production. Despite this economic vulnerability, many farmers do not appear to run their business with the sole intention of profit maximisation. This paper explores various financial and non-financial influencing factors on the strategic farm expansion decision-making process of farmers with the aim of assisting policymakers and farm advisors to develop a deeper understanding of that process. As a result, agricultural policy may be more effectively formulated and advisory services to farmers may be improved. Semi-structured interviews were undertaken with 27 farmers who have undertaken strategic farm expansion decisions. Subsequently, the interview findings were presented to a focus group to probe them in more detail. A wide range of financial and non-financial influencing factors on the strategic farm expansion decision-making process of farmers emerge. Analysis of the influencing factors by the specific type of farm expansion decision undertaken and by farm type provides further insights. It is proposed that these influencing factors act as a cue which trigger a sensebreaking activity and cause the farmer to enter a process of sensemaking, culminating in a strategic farm expansion decision being undertaken.