Thematic Group on Farm Diversification
This Thematic Group (TG) explored the opportunities and challenges for farm diversification in the EU, share examples that illustrate the success factors for effective farm diversification, and assessed the effectiveness of current CAP interventions and wider policy frameworks for supporting farm diversification.
Many European farmers are facing challenges in sustaining their livelihoods. 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, such as leisure, tourism, value-added processing, retailing, land rentals, renewables, and others.
The CAP can play a role in strengthening business competitiveness and diversification in various ways through productive (agricultural production and processing, forestry, promoting other non-agricultural activities) and non-productive farm investments, including the development of short supply chains and local food systems.
The main goal of this TG was to identify what lessons can be learned from current approaches, and how policies and support mechanisms can be better tailored to improve farm resilience and economic sustainability through diversification.
Objectives
The objectives of this TG were to:
- Explore the opportunities and challenges for farm diversification in the EU;
- Share examples that illustrate the success factors for effective farm diversification;
- Assess the effectiveness of current CAP interventions and wider policy frameworks for supporting farm diversification; and
Activities
Two TG meetings were organised. The first meeting (Brussels, 4 February 2026) focused on business opportunities for farm diversification, Member States’ support for diversification, and the effectiveness of the CAP interventions in unlocking the potential of farm diversification. At the second meeting (Rome, 6-7 May 2026), members continued to assess the effectiveness of the CAP and wider policy frameworks for farm diversification. A significant part of the session was devoted to the development of proposals and support mechanisms for farm diversification.
Key findings
TG members developed several proposals for farm diversification. Suggestions were as follows:
- Developing a common understanding of farm diversification that is adaptable to national and regional settings
- Having a definition of farm diversification that is location-specific and relevant to local areas and businesses
- Having a flexible regulatory framework at EU and MS level
- Introducing simpler mechanisms to enable and support farm diversification
- Incentivising farm diversification through clusters, tax benefits and grants
- Driving innovation through the provision of professional services, e.g. innovation hubs.
- Using clusters as drivers of smart specialisation for farm diversification
- Promoting the use of mixed funding options for farm diversification
- Developing targeted territorial, community-driven approaches to farm diversification (e.g. near urban areas, areas suffering from depopulation, shifting demographics, etc.)
- Developing dedicated networking, advisory services, skills development, knowledge exchange and innovation support for farm diversification, e.g. peer learning, demonstration farms, mentoring and coaching.
TG members also reflected on what an ideal policy framework for farm diversification should look like, centring on the need for policies to have a clear intervention logic, clear outcomes and a clear strategy that can be integrated with other policies, funding and support mechanisms. Everyone recognised that the CAP had to work alongside other EU funds and with national and private funding to ensure farm diversification succeeds. An inclusive multi-actor approach acting at the appropriate level was also advocated for policy development, implementation and governance.
Scroll down this page to find all the outputs of this Thematic Group and relevant resources related to this topic.
Learn more
You can find other useful resources about this theme in our Publications section and in our Good Practice database.
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