An assessment of rurality in Italian farms using a quantitative approach

Nicola Galluzzo

Abstract: The Farm Accountancy Data Network (FADN) is a dataset able to investigated in depth the income of farmers, the items of cost and also the impact of the Common Agricultural Policy subsidies in a sample of farms. The core purpose of this research was to assess by a quantitative approach the rurality index in Italian farms part of FADN dataset investigating also if the financial subsidies and land capital endowment have impacted on the rurality. In fact, this quantitative approach has evaluated the cause-effect relationships among different items and endogenous variables correlated to the rurality. The methodology has used a non-parametric approach such as the Partial Least Square Structural Equation Model (PLS-SEM) due to a small numerousness of farms in the sample; furthermore, because of not being a general codified and well consolidated methodology aimed at investigating the rurality the non-parametric approach seems to be quite adequate to the main goal of this study. Findings have pointed out as the endogenous variables cost, financial subsidies allocated by the Common Agricultural Policy and the different endowment in crops or livestock have influenced on the rurality. Drawing the conclusions, the land endowment, payments to farmers and indirect subsidies disbursed by the European Union have acted directly on the level of rurality in all investigated Italian farms.

Keywords: Common Agricultural Policy; PLS-SEM; rural areas; rural development

Date published: 2019-07-31