Objective of this work is to investigate the structural change and economic dynamics of farms pursuing diversification and differentiation strategies in Italy. The analysis was performed on a panel of data built on the basis of information collected by the Italian FADN between 2003-2009. For the purpose of the analysis, we divided the population of commercial Italian farms into a five-fold farm typology based on size and the extent of diversification and differentiation strategies adopted by the farms. In detail, farms are defined as differentiated when they make use of a system of quality certification, while they are defined as diversified when they take up non farming activities (agritourism, social farms etc.). The findings show that conventional farms remain by far the largest category within the population of Italian commercial farms, while only 13% of the total commercial farms are classified as differentiated and/or diversified. Farms adopting product differentiation strategies are found to have an income growth path similar to that of conventional farms. Yet the category of diversified farms is the only one showing an upward trend with regard to income per worker in the observed years, while farms relying entirely on agricultural products appear to perform poorly in terms of labour productivity.
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