Small Farms in Italy: What Is Their Impact on the Sustainability of Rural Areas?

Abstract

Small farms are gaining space and importance within the agricultural policies implemented by the European Union, mainly for the role that they play for the preservation of the territory and for the economic development of local rural areas. Small farms represent a new opportunity to guarantee the permanence of populations and agricultural workers in rural areas, contributing to the formation of the income of farming families. Therefore, in this study, after identifying small farms as those farms that have a Standard Output (SO) of less than EUR 25,000, their structural characteristics were defined, as well as their economic and financial situation. The analysis was performed using the Italian FADN data for the years 2018–2020 and using a set of structural and economic–financial indicators. Furthermore, the study analyzes the relationship between farm performance and agricultural resources and also with farmer demographics and farm size. The principal Component analysis was used to reduce the number of variables used in the Ordinary Least Square (OLS) regression model which was applied to identify the factors contributing to the small farms’ profitability. The territorial distribution of small farms shows a polarization: 37% of them are in Southern Italy, and more than 34% of them are in Northern Italy. The analysis also reveals that about 67% of the Italian small farms are specialized, in particular, in arable land (37.6%) and herbivores (16.8%). They are mainly conducted by men with a high school education level and with an age that is between 40 and 65 years. The economic results also show a good performance, however, there is a wide district differentiation: while the Northern regions have the best results in terms of farm net income, those of Southern Italy are more dependent on the public support they receive. The results of the multiple linear regression analysis revealed which variables (e.g., land size, labor, public aid, etc.) had a direct relationship with the profitability of small farms. The research provides interesting insights to stakeholders on the public support (specific measures) that needs to be designed and implemented to favor the survival of small farms in rural areas.

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