Sustainability and competitiveness in farms: An evidence of Lazio region agriculture through FADN data analysis

Abstract

The new legislative proposals related to the Common Agricultural Policy (CAP) reform 2021-2027 aim to promote a sustainable and competitive agricultural sector. The new CAP supports agriculture in making a much stronger contribution to climate, biodiversity, environment and improving farms' competitiveness in the agri-food sector, in a European context.The importance of a strong focus on results and performance in the CAP legislation requires a continuous assessment and monitoring of the effectiveness of the measures adopted in the Rural Development Programs (RDP) with respect to the specific goals set during the cap program. In order to assess the progress in improving the competitiveness and sustainability of the agri-food sector in reaching their targets and the objectives of the CAP, the need arises to investigate whether the RDP measures contribute to supporting the transition towards sustainable agriculture, to the competitiveness of the agri-food sector and to a balanced development of the rural areas. In this new legislative framework, where it becomes important to evaluate whether the CAP provides a much stronger contribution to achieving the specific objectives, our paper aims to describe agricultural sector in the Lazio region and to analyze the effects, in terms of sustainability and competitiveness, of the measures approved by RDP 2014-2020, which have almost expired. In particular, we provide a comparative analysis of the data collected by the Farm Accountancy Data Network (FADN), focusing on two different periods: one prior to the last programming and one referring to the latest available data. The collected data refer to farms, regarding their structural, economic, financial and patrimonial characteristics, as well as variables that describe attitudes and behaviour towards the environment. A multivariate analysis (clustering) is applied; it focuses on explorative factor analysis based on principal components, in order to identify homogeneous groups of farms with sustainability and competitiveness and identify similar characteristics and potential for development trajectories. The results found that farms are moving towards more sustainable and multifunctional development paths. The assessment of EU goals for social, environmental, and economic sustainability in agriculture and rural areas are a basis for discussion among public decisionmakers involved in the reforming process of the explanatory measures of the new strategic objectives of the post-2020 CAP.Our results can offer a contribution to meeting the current challenges posed by the EU to ensure a smooth transition to the future CAP program. Major challenges that raise policy debate on the considerable potential of the FADN for assessing sustainability and farm competitiveness in the EU framework which places strong emphasis on results and performance.