Segmenting farms in European Union

Abstract

The main objective of this work is to characterize and segment the farms of the twenty-seven Member States of the European Union (EU). For this purpose, the techniques of cluster analysis and cluster of cases segment the farms, based on a sample of farms of the Farm Accountancy and Information Network. The results show the existence of four types of farms in the EU that are distinguishable by their (i) structural characteristics, in particular, for their Utilized Agricultural Area, the total output, by the percentage of contract work and the total work, (ii) by their financial characteristics, i.e., by their total assets and the cash flow of the EU farms, and (iii) by their guidance and the importance of subsidies on these farms. These results thus suggest the definition of the Common Agricultural Policy differentiated and adapted to the existing four clusters of countries. We suggest the development of typologies of farms in the EU, with a more robust database involving different EU regions that constitute the different countries in order to obtain the robust types of farms from different European regions.