Economic vs. Non-Economic Determinants of Diversification and Specialisation in Agriculture

Abstract

Empirical evidence from the sugar sector of the UK has revealed that farmers in this sector adjusted to the EU reform of the Sugar Regime either by diversifying production or by specialising in a small number of crops. This article hypothesises that these strategic choices were influenced by a number of economic and non-economic drivers. A probit analysis conducted with a sample of ex-sugar beet farmers was used to test this hypothesis. The result showed that only non-economic drivers (i.e., social-psychological variables) were significant in explaining the strategic choices made by the farmers. This suggests that traditional analyses based purely on economic considerations have to be considered with caution.