The Relationship Between Farm Diversification And Socio-Economic Indicators In Agriculture

The diversification of family farms includes the extension of the basic agricultural activities to value-added products or services as food processing, catering and tourism services as well as educational and demonstration content. The purpose of diversification is to increase the level and stability of farmers' income and, indirectly, to mitigate unfavorable demographic trends in rural areas. The aim of the paper is to identify the diversification factors, their correlation with socioeconomic indicators, and to determine to what extent they are present in Croatian agriculture, based on the examples from EU member states. Taken into account the examples from EU 28 the results show statistically significant correlation (p below 0.05) between the presence of diversifying activities on family farms and agricultural productivity, average farm size, farmers' education and certain types of production. The aforementioned indicators put Croatia in the line of less developed countries of the European Union, thus reducing the potential for diversifying activities in the Croatian rural economy. The results of the paper confirm the assumption that diversification is more present in countries with more developed agriculture. Consequently, its inclusion in the business practice of farmers is an instrument of strengthening Croatian agriculture and rural economy in general.