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Abstract
The recent CAP has increasingly supported the process of farm diversification throughout a set
of measures aimed at enhancing alternative forms of incomes. The paper focuses on evaluating
to what extent the diversification strategy enhanced the economic sustainability of different
typologies of farms, ranking from micro farms to traditional conventional ones and to the
diversified and quality-differentiated farm. The paper analyses the evolution a set of indicators
used to assess and compare the performance of these farm typologies over the 2003-09 period.
Results show that a certain level of multifunctionality and diversification is actually featured in
most farms. The majority of farms in the panel is focused on the strategy of differentiation
through quality products, which is key for Italian agriculture performance and competitiveness.
Moreover, the indicators of economic sustainability seem to confirm the complementary role of
rural development policies to the first pillar of the CAP.