Re-configuring rural economies – The interplay of institutions in three agri-food production systems

Abstract

Rural economies and agri-food systems are strongly affected by institutions and institutional settings, as evidenced by many scholars exploring the impact of agricultural policies. By contrast, intangible forms of institutions (e.g. routines, conventions) inscribed in economic practices and their interplay with formal institutions are not yet well understood within the field of agri-food studies. We address this gap by exploring the diverse role of both formal and informal institutions for the re-configuration of agri-food chains. For this, we use three examples of crop production (potatoes, rapeseeds, sugar beets) in Lower Saxony, Germany. Drawing on more than 50 qualitative interviews, we will show, among others, that the interplay of formal rules and economic practices is moderated by context-specific institutional patterns, entailing shifts in corporate strategy, focus of production or supplier-customer relations – which together we would label ‘flexible diversification’. Further insights of the study refer to the strengthening of ‘bonding social capital’ or the exertion of ‘collective power’ as specific forms of ‘institutions-in-practice’ in order to adapt to a changing macro-economic environment. A particular focus lies on the way of how (smaller) crop producers deal with sustainability issues and their formal enforcement via regulations/prohibitions or incentive schemes (secured by certified standards), which both seem to undermine the acceptance of sustainability as a guiding principle among upstream actors of the value chains.