Explaining the determinants of on-farm diversification: The case Study of Tuscany Region.

The on-farm diversification toward multifunctional activities is perceived as central in the CAP policy reform and in Horizon 2020 strategies, because it strengthen territorial and social cohesion of the rural areas. While relations between farm-household diversification and rural economies are central into the process of multifunctionality and provision of public goods through agricultural activities, on-farm diversification activities could represent a relevant share of farm income. Agricultural Economics and Rural Sociology literatures have developed models to explain the determinants of on-farm diversification. In this paper the determinants and the motivations to onfarm diversification toward activities different from crops and animal production are investigated The paper applies a count model to explain the amount of on-farm diversification alternatives that are applied in Tuscany farms. Results confirm that location to main touristic areas and closeness to urban markets are strong determinants of on-farm diversification. Results highlight also, a positive contribution of agricultural policies (both first pillar and second pillar policies) in determining diffusion of on-farm diversification activities.