Farm Household Income Diversification as a Survival Strategy

Abstract

The analyses focus on the structural change in agriculture and farm households for the selected hilly and mountainous areas in Slovenia before and after the accession to the European Union, with an emphasis on empirical analysis of a sample of income diversification of rural households in the census years, and the importance of self-employment for farm households’ well-being and food security. A t-test was applied to investigate the differences of arithmetic means between the two municipalities and between the two census years, and an F-test with analysis of variance was used for the differences of arithmetic means between four socioeconomic types of agricultural households (AHs). The number of farm households has declined with heterogeneous patterns according to their socioeconomic type and their location areas according to the level of economic development and natural farming conditions. Farm exits do not necessarily mean discontinuation of other nonfarming activities at a household. While the number of farm households leaving farming has increased, there has also been an increase in farm households engaged in other gainful activity such as supplementary farm activities and in off-farm employment and off-farm incomes. Income from farming for most households is not sufficient for survival, and therefore, diversification of income for households is imminent. Diversification of income from self-employment is important for more than one-third of households that maintain agri-food production for the market. Income from self-employment is an important source of income for household well-being and for investment in agricultural production to improve incomes from farming activities. Expansion of self-employment impacts the lack of time, business risks, and lack of interest of households to expand the business by renting external sources.