2nd meeting of the Thematic Group on Farm Diversification

The Thematic Group on Farm Diversification explores the opportunities and challenges for farm diversification in the EU, shares examples that illustrate the success factors for effective farm diversification, and assesses the effectiveness of current CAP interventions and wider policy frameworks for supporting farm diversification.

A significant number of European farmers are facing challenges in sustaining their livelihoods due to income instability, natural disasters, extreme weather events, environmental degradation, geopolitics, cost-price pressures, and increased market competition. The degree of economic vulnerability increases significantly, particularly for smaller farms, farms in certain sectors and farms located in economically disadvantaged or geographically challenging regions. For these farmers, one way of stabilising or increasing their income is to use their assets (land, buildings, equipment) to diversify into non-agricultural activities, thus creating sources of income that are independent from an agricultural income which is inherently unstable.

Diversification can help farmers by means of stabilising or increasing their on-farm incomes, creating employment and contributing to the local economy through non-agricultural activities such as leisure, tourism, value-added processing, retailing, house and land rentals, renewables, and others. Farm resilience through diversification can be hampered by weak property markets, lower market opportunities due to remoteness, lower levels of tourism, farm size, financing, organisational readiness, labour, seasonality, or conflict with the core farming activity, all of which may impact what individual businesses can do.

The CAP can play a role in supporting diversification through productive (agricultural production and processing, forestry, promoting other non-agricultural activities) and non-productive farm investments, including in the development of short supply chains and local food systems. The CAP also supports the strengthening of business competitiveness and diversification in other ways, including through cooperation actions, including LEADER and EIP. Business development may also be supported through farm advisory services or differentiated support rates for investments made by small-sized farms. Many Member States foresee higher support rates for small farms, mostly for productive and non-productive farm investments, as well as investments for processing/marketing agricultural products and for non-agricultural diversification.

Aims of the second TG meeting