Profile of the Italian farmer: The main entrepreneurial types

Abstract

The aim of this work was to schematise the main strategic profiles found in Italian farming. In a scenario of widespread structural weakness in Italy's agricultural sector, we found a broad entrepreneurial area where farmers with a high risk of extinction work together with farmers who are able to allocate their family resources efficiently both within and outside their farms. In this context, it would be appropriate to implement a new framework of public intervention in the agricultural sector in Europe, which would consider the overall features belonging to the family's objective function in decision-making, such as the presence of work outside the farm. In Italy, the rationale of the farmers' decision-making process is chiefly consistent with the overall socio-economic environment surrounding the family, as confirmed by our econometric analysis. Although the income level of the different types introduced in the analysis is positively affected by the presence of public support, total aid appears unable to provide a stimulus for farmers, generating considerable farm revenue dependent of off-farm income for their survival.

Keywords:

• Farmers' strategic profile
• entrepreneurial analysis
• rural development

Notes

1. The information gathered concerns about 2000 variables, referring both to physical and structural data and to economic data of the sample farms. The RICA also contains extensive information on the “consumption” of policies on the part of the firm. The survey was conducted annually and is considered representative up to the regional level.

2. The survey used as a reference RICA data for 2006, with a total of 39 discrete and continuous variables. The sample for 2006 includes 14,031 firms.

3. Cluster analysis is a multivariate analysis technique with which the statistical units used may be grouped so as to minimise the “logical distance” within each group and maximise that between the groups. The logical distance is quantified using measurements of similarity/dissimilarity defined between statistical units. This process allows homogeneous groups among the statistical units to be constructed between the statistical units in question so as to identify a lower number of groups such that the elements belonging to a group are more similar to each other than to the elements belonging to other groups.

4. In these cases the marginal benefit associated to the production process is not given by the price received for the product, but by the increase in the family's objective function.

5. We labelled as homologue farmers the company that organises the production factors in the traditional way, i.e. does not differentiate its production and aimed to rely on economies of scale (so that the producer's average cost per unit to fall as the scale of output is increased) and CAP subsidies his competitiveness.

6. We used households revenue instead of households income as collected from the FADN database.

7. The National Statistics Institute estimates that farmers are decreasing 527,000 (–24%) in population from 2000 to 2005.

8. In these cases the marginal benefit associated to the production process is not given by the price received for the product, but by the increase in the family's objective function.