Measuring the economic sustainability of Italian farms using FADN data

Coppola A., Amato M., Vistocco D., Verneau F. (2022): Measuring the economic sustainability of Italian farms using FADN data. Agric. Econ. – Czech, 68: 327–337.

supplementary materialdownload PDF

In recent literature, the issue of sustainability and its measure has been addressed with different approaches that depend on the multidimensional nature of the concept and the specific sector and context to which it applies. The present work focuses on the economic sustainability component and suggests an operative measure at the farm level. The measure of economic sustainability has been applied to Italian family farms using Farm Accountancy Data Network (FADN). Based on this data, an efficiency indicator (EI) and two income indicators [a factor profitability indicator (FPI) and a comparable income indicator (CII)] expressing the ability to remunerate the entrepreneur's production factors at their opportunity cost and the farm's income capacity have been used in a principal component analysis (PCA) to build an economic sustainability index (SI). The index was used to describe Italian farms' economic sustainability levels but was also the cue to discuss problems related to identifying economic sustainability thresholds and the trade-off between efficiency and income components.

Arulnathan V., Heidari M.D., Doyon M., Li E., Pelletier N. (2020): Farm-level decision support tools: A review of methodological choices and their consistency with principles of sustainability assessment. Journal of Cleaner Production, 256: 120410.
Baldock D., Hart K. (2021): Pathways Toward a Legislative Framework for Sustainable Food System in the EU. Institute for European Environmental Policy. Available at (accessed June 20, 2022).
Binder C.R., Feola G., Steinberger J.K. (2010): Considering the normative, systemic and procedural dimensions in indicator-based sustainability assessments in agriculture. Environmental Impact Assessment Review, 30: 71–81.
Callens I., Tyteca D. (1999): Towards indicators of sustainable development for firms: A productive efficiency perspective. Ecological Economics, 28: 41–53.
Charnes A., Cooper W.W., Rhodes E. (1978): Measuring the efficiency of decision making units. European Journal of Operational Research, 2: 429–444.
Chopin P., Mubaya C.P., Descheemaeker K., Öborn I., Bergkvist G. (2021): Avenues for improving farming sustainability assessment with upgraded tools, sustainability framing and indicators. A review. Agronomy for Sustainable Development, 41: 19.
Coelli T.J. (1995): Recent developments in frontier modelling and efficiency measurement. Australian Journal of Agricultural Economics, 39: 219–245.
Coppola A., Scardera A., Amato M., Verneau F. (2020): Income levels and farm economic viability in Italian farms: An analysis of FADN data. Sustainability, 12: 4898.
Copus A.K., Crobtree J.R. (1996): Indicators of socio-economic sustainability: An application to remote rural Scotland. Journal of Rural Studies, 12: 41–54.
CREA-PB (2017): Rete di Informazione Contabile Agricola (RICA) BDR Online – FADN data (2015–2017). Consiglio per la ricerca in agricoltura e l'analisi dell'economia agraria – Centro di ricerca in Politiche e Bioeconomia (CREA-PB). Available at (accessed July 30, 2019). (in Italian)
de Olde E.M., Oudshoorn F.W., Sørensen C.A.G., Bokkers E.A.M., de Boer I.J.M. (2016): Assessing sustainability at farm-level: Lessons learned from a comparison of tools in practice. Ecological Indicators, 66: 391–404.
de Otálora X.D., del Prado A., Dragoni F., Estellés F., Amon B. (2021): Evaluating three-pillar sustainability modelling approaches for dairy cattle production systems. Sustainability, 13: 6332.
Dillon E.J., Hennessy T.C., Hynes S., Garnache C., Commins V. (2007): Measuring the sustainability of agriculture. Rural Economy Research Centre (RERC) Working Paper Series 07-WP-RE-01.
FAO (2016): SAFA – Sustainability Assessment of Food and Agriculture Systems for Sustainable Development. Rome, Italy, Food and Agricultural Organization of United Nations (FAO). Available at (accessed Oct 25, 2021).
Farrell A., Hart M. (1998): What does sustainability really mean? The search for useful indicators. Environment, 40: 4–9.
Forleo M.B., Giaccio V., Mastronardi L., Romagnoli L. (2021): Analysing the efficiency of diversified farms: Evidences from Italian FADN data. Journal of Rural Studies, 82: 262–270.
Frawley J.P., Commins P. (1996): The Changing Structure of Irish Farming: Trends and Prospects. Rural Economy Research Series No. 1. Dublin, Ireland, Teagasc: 22.
Gaviglio A., Bertocchi M., Demartini E. (2017): A tool for the sustainability assessment of farms: Selection, adaptation and use of indicators for an Italian case study. Resources, 6: 60.
Gil J.D.B., Reidsma P., Giller K., Todman L., Whitmore A., van Ittersum M. (2019): Sustainable development goal 2: Improved targets and indicators for agriculture and food security. Ambio, 48: 685–698.
Hansen J.W. (1996): Is agricultural sustainability a useful concept? Agricultural Systems, 50: 117–143.
Hennessy T., Shresthra S., Farrell M. (2008): Quantifying the viability of farming in Ireland: Can decoupling address the regional imbalances. Irish Geography, 41: 29–47.
Latruffe L., Desjeux Y., Hanitravelo G.L.J., Hennessy T., Bockstaller C., Dupraz P., Finn J. (2016): Tradeoffs between Economic, Environmental and Social Sustainability: The Case of a Selection of European Farms. FLINT (Farm-Level Indicators for New Topics in policy evaluation), Deliverable 5.2L: 46. Available at (accessed Aug 31, 2020).
Loughrey J., O'Donoghue C., Conneely R. (2022): Alternative measures of Family Farm Viability – Incorporating gap measures. Journal of Rural Studies, 89: 257–274.
Nadaraja D., Lu C., Islam M. (2021): The sustainability assessment of plantation agriculture – A systematic review of sustainability indicators. Sustainable Production and Consumption, 26: 892–910.
O'Donoghue C., Devisme S., Ryan M., Conneely R., Gillespie P., Vrolijk H. (2016): Farm economic sustainability in the European Union: A pilot study. Studies in Agricultural Economics, 118: 163–171.
OECD (2013): OECD Compendium of Agri-environmental Indicators. Paris, France, Organisation for Economic Co-operation and Development (OECD) Publishing: 185.
Reig-Martínez E., Gómez-Limón J.A., Picazo-Tadeo A.J. (2011): Ranking farms with a composite indicator of sustainability. Agricultural Economics, 42: 561–575.
Rigby D., Woodhouse P., Young T., Burton M. (2001): Constructing a farm-level indicator of sustainable agricultural practice. Ecological Economics, 39: 463–478.
Ryan M., Hennessy T., Buckley C., Dillon E.J., Donnellan T., Hanrahan K., Moran B. (2016): Developing farm-level sustainability indicators for Ireland using the Teagasc National Farm Survey. Irish Journal of Agricultural and Food Research, 55: 112–125.
Spicka J., Hlavsa T., Soukupova K., Stolbov M. (2019): Approaches to estimation the farm-level economic viability and sustainability in agriculture: A literature review. Agricultural Economics – Czech, 65: 289–297.
van Cauwenbergh N., Biala K., Bielders C., Brouckaert V., Franchois L., Garcia Cidad V., Hermy M., Mathijs E., Muys B., Reijnders J., Sauvenier X., Valckx J., Vanclooster M., van der Veken B., Wauters E., Peeters A. (2007): SAFE – A hierarchical framework for assessing the sustainability of agricultural systems. Agriculture, Ecosystems and Environment, 120: 229–242.
van der Ploeg J.D., Roep D. (2003): Multifunctionality and rural development: The actual situation in Europe. In: van Huylenbroeck G., Durand G. (eds.): Multifunctional Agriculture: A New Paradigm for European Agriculture and Rural Development. Hampshire, United Kingdom, Ashgate: 37–53.
van Passel S., Nevens F., Mathijs E., van Huylenbroeck G. (2007): Measuring farm sustainability and explaining differences in sustainable efficiency. Ecological Economics, 62: 149–161.
van Passel S., Meul M. (2012): Multilevel and multi-user sustainability assessment of farming systems. Environmental Impact Assessment Review, 32: 170–180.
Vrolijk H.C.J., De Bont C.J.A.M., Blokland P.W., Soboh R.A.M.E. (2010): Farm Viability in the European Union: Assessment of the Impact of Changes in Farm Payments. Report 2010-011. Den Haag, the Netherlands, LEI – Wageningen University and Research Centre (WUR): 69.
Zahm F., Viaux P., Vilain L., Girardin P., Mouchet C. (2008): Assessing farm sustainability with the IDEA method – From the concept of agriculture sustainability to case studies on farms. Sustainable Development, 16: 271–281.
supplementary materialdownload PDF

© 2022 Czech Academy of Agricultural Sciences | Prohlášení o přístupnosti