Exploring Diversification Strategies among Italian Farms

Abstract

The multifunctionality model is receiving more and more attention from policymakers as a result of recent initiatives to build more resilient and sustainable food systems as well as the potential for increased farm revenue. This paper explores the role of multifunctional farming in the Italian agriculture viewed through the lens of an entrepreneurial strategy grounded on-farm diversification. Farm diversification strategies, which broaden the farm’s traditional boundaries to include additional activities at the farm level, help the evolution towards multifunctionality. A policy-driven transition towards multifunctional farming has been noticed in Italy during the past few decades, which has prompted a strategic reconfiguration of the farm’s business models. Drawing on the identified activity of portfolio diversification, this study provides an overview of the analyzed 49,429 Italian farms, by articulating diversification strategies into four entrepreneurial activities, which are related to on/off-farm/farm-related or farm-diverse diversification strategies. This article has attempted to verify the presence of farm types that responded to portfolio diversification management strategies through the use of a cluster analysis on data from the general census of Italian agriculture. Supporting new patterns in the adoption of business models focused on multifunctionality should be considered in European rural development policies.