2nd Thematic Group meeting on Farm Diversification

In the second meeting of the Thematic Group (TG), members focused on the development of proposals on policies and support mechanisms for farm diversification alongside continued consideration of the CAP and wider policy frameworks for farm diversification.

On the first day, participants were welcomed to Palazzo Valentini by Paolo Caracciolo, General Secretary of the Metropolitan City of Rome Capital; Paolo Ammassari, Head of General Directorate for Rural Development 2 (DISR) Office, Rural Development Planning, Italian Ministry of Agriculture, Food Sovereignty and Forestry; and Roberta Centonze, Lazio Region.

Alex Papakonstantinou, EU CAP Network, outlined the findings of a Managing Authorities (MA) Survey conducted by the EU CAP Network on how Member States (MS) are supporting farm diversification.

The survey collected 20 responses from 19 MS, which show considerable differences in how farm diversification data is collected and monitored. Some authorities use censuses, official statistics or CAP application data; about half of the respondents report limited information or no monitoring systems at all. MAs pointed to a mix of structural, financial, regulatory and social barriers, including land fragmentation, labour shortages, high start‑up costs, complex permitting procedures, an ageing farming population and limited opportunities for women. At the same time, women and younger family members often play a leading role in driving diversification.

The most used CAP tools are investment support for non‑agricultural activities and LEADER, though respondents noted ongoing issues such as bureaucracy, insufficient funding and weak coordination.

Looking ahead, respondents suggest that future CAP priorities should strengthen support for value‑added activities, improve coordination across measures, expand financial instruments, enhance training and advisory services, and provide more recognition for emerging sectors and rural services, including renewable energy.

Umberto Selmi (ISMEA, Italian National Network) offered an overview of farm diversification in Italy. The country is the leader in Europe in terms of added value in agriculture, with about EUR 43 billion (2024), and has the largest share in secondary activities such as renewable energy production. The common framework laws, principles and guidelines for farm diversification are set at national level. Regions and local municipalities across Italy are then responsible for applying their own rules. These layers can sometimes be difficult for farmers to deal with.

Farm diversification in Italy is supported through the CAP across various actions, including in agritourism, social farming, education and processing. Some areas have increased support rates for young farmers and mountain areas in their calls for diversification. Farm diversification in Italy attracts mainly younger farmers and female entrepreneurs across various activities, reinforcing the importance of multifunctional farming.

Roberta Centonze (Lazio Region) shared her insights on the role of regional administrative frameworks in Lazio.

Multi-functionality is related to the acknowledgement of agriculture, not only in terms of products, but also of common goods such as land stewardship, connecting urban people to rural areas, and providing food and services.

Diversification is essentially concerned with how farms use their space, transforming entrepreneurial ideas into income. In Italian law, the guiding principle for farm diversification is the prevalence of agriculture, which has to remain the core of the farm business.

Lazio provides a legal framework giving farmers freedom to interpret what diversification is to them and begin related activities. Farmers can also benefit from an assessment to see whether these proposals are coherent and consistent with the legal requirements. A regional planning law allows farmers to repurpose their buildings for 12 years, giving them enough time to develop shared services and investments.

Lazio has a regional agricultural authorisation system (STAR), which analyses proposals from farms and considers planning limitations, environmental regulations, and landscape limits and requirements. As much as possible, the aim is to foster business innovation and enable diversification.

Francesco Fratto (Italian National Network) provided an overview of Italian agritourism. Agritourism, multifunctionality and diversification offer a model for the protection, development and regeneration of rural areas, through food, hospitality and experiences. Agritourism also encourages the dissemination and adoption of sustainable practices and responsible choices. The model is also protected by a national law that sets out the definition and principles (features, activities and conditions) of agritourism.

Since 2013, agritourism has also benefited from a sector trademark which ensures farms operate in accordance with existing laws and regulations. The sector enjoys continued growth, making a significant contribution to economic growth and tourism across Italy. It is focused on playing a key role in environmental, territorial, and landscape protection, and in food quality, whilst embracing opportunities centred on business structures, new channels, female entrepreneurship, youth entry and big tech. The sector is also engaging with the many policy priorities that impact on the agri-rural arena.

Mario Stipetic (farmer, Soparnik, Croatia) outlined his experience running a family farm and diversifying into the production of the traditional food product ‘soparnik’. His story is based on tradition and familiarity, where over the years the family business has gradually developed and invested in modernisation to expand the business and improve production of Poljički Soparnik, which has a Protected Geographic Indication (PGI). They have successfully combined tradition and innovation, tapping into new market opportunities and reaching consumers – both tourists and local customers – through word of mouth, Google reviews and social media promotion.

Janie Vassallo (MaYa Foundation, Malta) offered a young farmer's perspective on farm diversification and why it is key to the future of farming in Malta. Given the small size of the Maltese islands, agricultural production alone is not sustainable for families or businesses, so diversification is essential. Diversification aids generation renewal by creating value-added products, generating additional income and enabling more people to remain active in agriculture. CAP support plays a crucial role in Malta by financing investments and supporting the installation of young farmers. It is equally vital that the CAP can also support peer learning, training, marketing and supply chain development so that the diversification initiative can succeed.

TG members elaborated on ideas flowing from the first TG meeting and during in-between meetings, placing particular emphasis on the development of proposals on policies and/or support mechanisms for farm diversification. Suggestions were as follows:

TG members then considered what an ideal policy framework for farm diversification should look like. The discussions centred on the need for a clear intervention logic, clear outcomes and a clear strategy to be integrated with other policies, funding and support mechanisms, with a focus on rural resilience and rural places.

TG members recognised that the CAP had to work alongside other EU funds and with national and private funding to ensure diversification succeeds. An inclusive multi-actor approach acting at the appropriate level was also advocated for policy development, implementation and governance.

On the second day, meeting host and business owner Aurelio Ferrazza welcomed everyone to Casale di Martignano. Aurelio also hosted a farm tour, sharing his own journey and offering real insights into the multi-functional nature of his family’s business.

The farm visit at Casale di Martignano also included short contributions from young farmers who have diversified their own businesses in the area. They shared their experiences with diversification and explained how they understand and approach it. A key message was that the real question is not whether diversification matters, but how to undertake farm diversification effectively.

This was the final meeting of this Thematic Group. All the examples highlighted, ideas discussed and proposals developed will feed into a member-led output on farm diversification, available – together with other related resources – on the Thematic Group page.