Income Levels and Farm Economic Viability in Italian Farms: An Analysis of FADN Data

Adele Coppola, Alfonso Scardera, Mario Amato and Fabio Verneau
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Alfonso Scardera: CREA-Research Centre for Agricultural Policies and Bioeconomy, 00198 Roma, Italy
Mario Amato: Department of Political Sciences, Università degli Studi di Napoli Federico II, 80138 Napoli, Italy
Fabio Verneau: Department of Political Sciences, Università degli Studi di Napoli Federico II, 80138 Napoli, Italy

Sustainability, 2020, vol. 12, issue 12, 1-18

Abstract: In the European Union legislative proposals for the next Common Agricultural Policy (CAP) the income support remains an essential part of the CAP. This paper analyses agricultural income levels, the role of EU aids in ensuring fair levels of income and how different socio-economic and structural characteristics affect farms’ economic viability. Italian Farm Accountancy Data Network (FADN) data have been processed and economic viability has been assessed by comparing Farm Net Income to a reference income and by estimating a profitability index to check whether the agricultural activities remunerate factors owned by the farmer and his/her family. After an explorative analysis, two multinomial logit models have been estimated to evaluate how structural and socio-economic characteristics affect the likelihood of a farm to be viable with and without EU aids. Both structural farm characteristics and farmer’s production strategies explain the likelihood of a farm to be viable in the short and in the medium-long term. Farms are more likely to be viable as the size increases and the higher the capital intensity, while viability likelihood decreases with the farmer’s age, when the holder is a woman, and the farm is localized in Southern Italy. CAP payments do not modify the factors that affect farm viability but can change their weight.

Keywords: farm income; economic viability; FADN; CAP; opportunity cost (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:12:y:2020:i:12:p:4898-:d:372047

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