ARI Biennial Review for 2018-2019

RURAL DEVELOPMENT The Rural Development Section of the Agricultural Research Institute conducts research aiming towards the sustainable development of the agricultural sector in Cyprus and the improvement of the quality of life of Cypriot farmers. The activities of the Section encompass topics related to agricultural economics, marketing and trade, as well as work on smart agriculture (or smart farming, which includes research on applications of Information and Communication Technologies, Remote Sensing, Internet of Things (IoT) and Robotics in agriculture. The Section collaborates with the Ministry of Agriculture, Rural Development and Environment and undertakes targeted studies and technical reports on agricultural economics, trade and policy, supporting decision-making. Finally, the Section is also actively involved in EU funded projects. AGRICULTURAL ECONOMICS Investigating the sustainability of the Agricultural Production System in Cyprus The ultimate goal of this research project is to examine, for the first time, the environmental, social and economic sustainability of divergent farming systems (FSs) in Cyprus, using as case studies two key agricultural districts, viz. Larnaka and Ammochostos. To achieve this goal, quantitative and qualitative research methods (multi- strategy design) are integrated in order to increase the reliability of the results. The main qualitative outputs were presented in the 2014-2015 biennial review. The objective of the quantitative research is twofold: (a) to identify and characterise the major FSs prevailing in the study area; and (b) to assess their sustainability performance on the basis of the traditional triad: environmental, social and economic sustainability. Within the context of the quantitative approach, a representative sample of 354 farmers was determined using proportionate stratified random sampling method. To obtain the primary data, a well-structured questionnaire was developed, including closed and open-ended questions. The questionnaire was completed through ca. 90- minute face-to-face interviews with farmers, and 324 fully-completed questionnaires were finally collected. To identify the diverse FSs in the study area, Principal Component Analysis and Cluster Analysis (Hierarchical and k-means) were applied in tandem via a six-step methodological procedure. The process led to the identification of six significantly different FSs (FS1-FS6) differentiated by land use, livestock, production orientation, farm, household, labour and economic variables ( Table 7 ). FS1-FS4 were crop-oriented and FS5-FS6 were livestock- oriented, cultivating cereals/fodder crops for livestock feeding. Only FS1 was profitable without subsidies, which were negatively correlated with economic outputs. This brings into question the effectiveness of subsidies in providing the basis for a more profitable agricultural sector. FS3-FS5 households sought off/no-farm income mainly for their survival, but not to cross-subsidise the farm. Small crop-oriented farms (FS4) and medium-sized livestock-oriented farms (FS5) had several weaknesses, such as elderly, low-educated farmers and low profitability; therefore, their viability should be the priority of decision makers. Weak complementarity was also observed between the main system components (crop, livestock, off/non-farm income), which might negatively affect sustainable intensification. The importance of participation in producer groups/organisations for farm sustainability was also underlined. The overall results can be used for a more focused agricultural policy, tailored to the different constraints and opportunities of FSs, but also to inform public decision makers who are responsible to design and implement agricultural policy in Cyprus. The next step of the project is to assess and compare the sustainability performance of the identified FSs using an integrated indicator-based sustainability assessment framework developed by the research team. (A. Stylianou) 58 RURAL DEVELOPMENT