Investments financing at farm level: A regional assessment using FADN data

Abstract

This article presents the results of an ex-ante evaluation exercise on the financial instruments adopted under the rural development policy. Using fad n data, during a ten-year time span, the study estimates the investments and their financial covertures made by a sample of farms in the Abruzzo region.The balance sheets of the farms were analysed in order to quantify the investments made by the farms in one year and the related financial coverage. The main results show that the propensity to invest is, on average, of 0.27 and it varies according to the characteristics of the farms; while on average 90% of farm investment value is self-financed. These results provided some interesting policy implications, highlighting either or both, a latent need for farms for external financial funds and/or an ineffective financial management of the business activity.