IDEAS home Printed from https://ideas.repec.org/a/caa/jnlage/v68y2022i9id169-2022-agricecon.html
   My bibliography  Save this article

Measuring the economic sustainability of Italian farms using FADN data

Author

Listed:
  • Adele Coppola

    (School of Agricultural, Forestry, Food and Environmental Sciences (SAFE), University of Basilicata, Potenza, Italy)

  • Mario Amato

    (Department of Political Sciences, University of Naples Federico II, Napoli, Italy)

  • Domenico Vistocco

    (Department of Political Sciences, University of Naples Federico II, Napoli, Italy)

  • Fabio Verneau

    (Department of Political Sciences, University of Naples Federico II, Napoli, Italy)

Abstract

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.

Suggested Citation

  • Adele Coppola & Mario Amato & Domenico Vistocco & Fabio Verneau, 2022. "Measuring the economic sustainability of Italian farms using FADN data," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 68(9), pages 327-337.
  • Handle: RePEc:caa:jnlage:v:68:y:2022:i:9:id:169-2022-agricecon
    DOI: 10.17221/169/2022-AGRICECON
    as

    Download full text from publisher

    File URL: http://agricecon.agriculturejournals.cz/doi/10.17221/169/2022-AGRICECON.html
    Download Restriction: free of charge

    File URL: http://agricecon.agriculturejournals.cz/doi/10.17221/169/2022-AGRICECON.pdf
    Download Restriction: free of charge

    File URL: https://libkey.io/10.17221/169/2022-AGRICECON?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Tim J. Coelli, 1995. "Recent Developments In Frontier Modelling And Efficiency Measurement," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 39(3), pages 219-245, December.
    2. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    3. Hansen, J. W., 1996. "Is agricultural sustainability a useful concept?," Agricultural Systems, Elsevier, vol. 50(2), pages 117-143.
    4. Frédéric Zahm & Philippe Viaux & Lionel Vilain & Philippe Girardin & Christian Mouchet, 2008. "Assessing farm sustainability with the IDEA method - from the concept of agriculture sustainability to case studies on farms," Sustainable Development, John Wiley & Sons, Ltd., vol. 16(4), pages 271-281.
    5. Anna Gaviglio & Mattia Bertocchi & Eugenio Demartini, 2017. "A Tool for the Sustainability Assessment of Farms: Selection, Adaptation and Use of Indicators for an Italian Case Study," Resources, MDPI, vol. 6(4), pages 1-21, October.
    6. Callens, Isabelle & Tyteca, Daniel, 1999. "Towards indicators of sustainable development for firms: A productive efficiency perspective," Ecological Economics, Elsevier, vol. 28(1), pages 41-53, January.
    7. Jindrich Spicka & Tomas Hlavsa & Katerina Soukupova & Marie Stolbova, 2019. "Approaches to estimation the farm-level economic viability and sustainability in agriculture: A literature review," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 65(6), pages 289-297.
    8. Ernest Reig‐Martínez & José A. Gómez‐Limón & Andrés J. Picazo‐Tadeo, 2011. "Ranking farms with a composite indicator of sustainability," Agricultural Economics, International Association of Agricultural Economists, vol. 42(5), pages 561-575, September.
    9. Adele Coppola & Alfonso Scardera & Mario Amato & Fabio Verneau, 2020. "Income Levels and Farm Economic Viability in Italian Farms: An Analysis of FADN Data," Sustainability, MDPI, vol. 12(12), pages 1-18, June.
    10. Van Passel, Steven & Nevens, Frank & Mathijs, Erik & Van Huylenbroeck, Guido, 2007. "Measuring farm sustainability and explaining differences in sustainable efficiency," Ecological Economics, Elsevier, vol. 62(1), pages 149-161, April.
    11. Xabier Díaz de Otálora & Agustín del Prado & Federico Dragoni & Fernando Estellés & Barbara Amon, 2021. "Evaluating Three-Pillar Sustainability Modelling Approaches for Dairy Cattle Production Systems," Sustainability, MDPI, vol. 13(11), pages 1-14, June.
    12. O'Donoghue, Cathal & Devisme, Simon & Ryan, Mary & Conneely, Ricky & Gillespie, Patrick & Vrolijk, Hans, 2016. "Farm economic sustainability in the European Union: A pilot study," Studies in Agricultural Economics, Research Institute for Agricultural Economics, vol. 118(3), pages 1-9, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. José A. Gómez‐Limón & Sandra Sánchez‐Cañizares & Amalia Hidalgo‐Fernández & Ana M. Castillo‐Canalejo, 2023. "Profit and viability persistence: Evidence from the Spanish agricultural sector," Agribusiness, John Wiley & Sons, Ltd., vol. 39(4), pages 1300-1332, October.
    2. Paola Sau & Brunella Arru & Federica Cisilino & Roberto Furesi & Pietro Pulina & Fabio A. Madau, 2023. "Economic and Environmental Sustainability Trade-Off Analysis in Sheep Farming Using the Farm Accountancy Data Network Database," Sustainability, MDPI, vol. 15(24), pages 1-24, December.
    3. Katarína Novotná & Ľubomír Gurčík & Zuzana Lušňáková, 2023. "Economic determinants of the development and sustainability of family farms in Slovakia," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 69(7), pages 291-299.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ogawa, Keishi & Garrod, Guy & Yagi, Hironori, 2023. "Sustainability strategies and stakeholder management for upland farming," Land Use Policy, Elsevier, vol. 131(C).
    2. Gerdessen, Johanna C. & Pascucci, Stefano, 2013. "Data Envelopment Analysis of sustainability indicators of European agricultural systems at regional level," Agricultural Systems, Elsevier, vol. 118(C), pages 78-90.
    3. Victoria Vicario-Modroño & Rosa Gallardo-Cobos & Pedro Sánchez-Zamora, 2023. "Sustainability evaluation of olive oil mills in Andalusia (Spain): a study based on composite indicators," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(7), pages 6363-6392, July.
    4. Leonidas Sotirios Kyrgiakos & Georgios Kleftodimos & George Vlontzos & Panos M. Pardalos, 2023. "A systematic literature review of data envelopment analysis implementation in agriculture under the prism of sustainability," Operational Research, Springer, vol. 23(1), pages 1-38, March.
    5. Joanna Domagała, 2021. "Economic and Environmental Aspects of Agriculture in the EU Countries," Energies, MDPI, vol. 14(22), pages 1-23, November.
    6. Paolo Cupo & Rinalda Alberta Di Cerbo, 2016. "The determinants of ranking in sustainable efficiency of Italian farms," RIVISTA DI STUDI SULLA SOSTENIBILITA', FrancoAngeli Editore, vol. 2016(2), pages 141-159.
    7. Picazo-Tadeo, Andrés J. & Beltrán-Esteve, Mercedes & Gómez-Limón, José A., 2012. "Assessing eco-efficiency with directional distance functions," European Journal of Operational Research, Elsevier, vol. 220(3), pages 798-809.
    8. Kuosmanen, Timo & Kuosmanen, Natalia, 2009. "How not to measure sustainable value (and how one might)," Ecological Economics, Elsevier, vol. 69(2), pages 235-243, December.
    9. Pedro Sánchez-Zamora & Rosa Gallardo-Cobos, 2020. "Territorial Cohesion in Rural Areas: An Analysis of Determinants in the Post-Economic Crisis Context," Sustainability, MDPI, vol. 12(9), pages 1-20, May.
    10. Victor MOUTINHO & Margarita ROBAINA & Pedro MACEDO, 2018. "Economic-environmental efficiency of European agriculture - a generalized maximum entropy approach," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 64(10), pages 423-435.
    11. Ferrara, Giancarlo & Vidoli, Francesco, 2017. "Semiparametric stochastic frontier models: A generalized additive model approach," European Journal of Operational Research, Elsevier, vol. 258(2), pages 761-777.
    12. Silvia Saravia-Matus & T. S. Amjath-Babu & Sreejith Aravindakshan & Stefan Sieber & Jimmy A. Saravia & Sergio Gomez y Paloma, 2021. "Can Enhancing Efficiency Promote the Economic Viability of Smallholder Farmers? A Case of Sierra Leone," Sustainability, MDPI, vol. 13(8), pages 1-17, April.
    13. van Calker, Klaas Jan & Antink, Rudi H.J. Hooch & Beldman, Alfons C.G. & Mauser, Anniek, 2005. "Caring Dairy: A Sustainable Dairy Farming Initiative in Europe," 15th Congress, Campinas SP, Brazil, August 14-19, 2005 24234, International Farm Management Association.
    14. Anna Gaviglio & Mattia Bertocchi & Maria Elena Marescotti & Eugenio Demartini & Alberto Pirani, 2016. "The social pillar of sustainability: a quantitative approach at the farm level," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 4(1), pages 1-19, December.
    15. Jesús Peiró-Palomino & Andrés J. Picazo-Tadeo, 2018. "Assessing well-being in European regions. Does government quality matter?," Working Papers 2018/06, Economics Department, Universitat Jaume I, Castellón (Spain).
    16. Isabelle Piot-Lepetit, 1998. "Agriculture et environnement : une évaluation de la performance technique et environnementale d'exploitations bovines," Post-Print hal-02290696, HAL.
    17. Ranjan Roy & Ngai Weng Chan, 2012. "An assessment of agricultural sustainability indicators in Bangladesh: review and synthesis," Environment Systems and Decisions, Springer, vol. 32(1), pages 99-110, March.
    18. Imane Bounadi & Khalil Allali & Aziz Fadlaoui & Mohammed Dehhaoui, 2023. "Water Pollution Abatement in Olive Oil Industry in Morocco: Cost Estimates and Policy Implications," Sustainability, MDPI, vol. 15(5), pages 1-19, February.
    19. Andreu, Monica Lopez & Featherstone, Allen M. & Langemeier, Michael R. & Grunewald, Orlen C., 2006. "Impact of Financial Variables on Production in Kansas Farms Efficiencies," 2006 Annual meeting, July 23-26, Long Beach, CA 21406, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    20. Alexandra Sintori & Penelope Gouta & Vasilia Konstantidelli & Irene Tzouramani, 2024. "Eco-Efficiency of Olive Farms across Diversified Ecological Farming Approaches," Land, MDPI, vol. 13(1), pages 1-19, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:caa:jnlage:v:68:y:2022:i:9:id:169-2022-agricecon. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ivo Andrle (email available below). General contact details of provider: https://www.cazv.cz/en/home/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.