Farm economic sustainability in the European Union: A pilot study

The measurement of farm economic sustainability has received intermittent academic interest in recent times, while the conceptual discussions are often quite limited. Moreover, this concept receives more attention at periods of difficulty for the sector. The measurement of farm viability is an important precondition to enrich these discussions. Therefore, it is necessary to develop more comprehensive and detailed measurement techniques to provide more clarity on viability and vulnerability levels in the sector. This paper refocuses attention on this issue, using a pilot dataset collected at farm level across a range of EU Member States which facilitates the assessment of an additional category of viability, namely that of economically sustainable farms, i.e. farms that are economically vulnerable but which are deemed sustainable by the presence of off-farm income. Differences in viability and economic sustainability across the eight surveyed Member States are shown. The analysis is sensitive to the factors included in the measurement of viability as well as to the threshold income used to define viability. Although this is a pilot study, it enhances our understanding of the factors affecting cross-country evaluation of viability and sustainability, and the policy instruments that could improve viability levels.