EU farmers' intentions to invest in 2014-2020: complementarity between asset classes

This article aims to analyse the determinants of EU farmers' intentions to invest in the period 2014-2020. It analysed data of a survey of 780 farmers interviewed in spring 2013, covering 6 EU countries (Czech Republic, Germany, Spain, France, Italy, Poland) and four different farm types (arable crops, livestock, perennial crops and mixed farms). A multivariate probit model is used in order to determine the factors explaining the willingness to invest or not to invest in various farm asset classes (land, building, machinery, training) by the surveyed farmers. The multivariate probit allows taking into account the possibility of simultaneous investments and the potential correlations among these investment decisions. We find that investments in different asset classes are complementary. Farmers willing to invest in one asset class are also willing to invest in other asset classes, after controlling for observable characteristics such as farm size, specialization, farmer's age. This paper contributes to the limited literature on farmers' investment decisions at EU-level. Future versions of the paper will include the marginal effects, as well as improved justification of the methodology and interpretation of the results.