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Abstract
On-farm diversification towards multifunctional activities is perceived as
central in the Common Agricultural Policy (CAP) reform and in the Horizon 2020
strategies, because it strengthens territorial and social cohesion of rural areas.
While from a “macro” point of view relations between farm-household diversification
and rural economies are central in the process of multi-functionality and in the provision
of public goods through agricultural activities, from a “micro” point of view onfarm
diversification activities can represent a relevant share of farm income.
Agricultural Economics and Rural Sociology have developed models aiming to
explain the determinants of on-farm diversification thus providing a set of variables
potentially influencing on-farm diversification. The paper applies a count model
to explain the number of on-farm diversification activities that are implemented by
farms in Tuscany. Since the high number of agricultural holdings that do not apply
any diversification activity, we propose a two-step model where, firstly a simulation of
adoption of diversified strategy as binary variable is considered and secondly, a model
analysing the determinants of diversification intensity among the farms that have
decided to diversify is implemented. Results confirm that location near main touristic
areas and vicinity to urban markets are important determinants of on-farm diversification
intensity. Results highlight a positive contribution of the Pillar 2 agricultural
policies both in determining the diffusion of on-farm diversification activities and in
influencing the intensity of adoption, while high per hectare Single Farm Payments
have a negative influence on diversification intensity.