Farm Diversification and its Role in achieving Safe and Just Outcomes: Insights from German FADN Data - Discussion paper

Abstract This discussion paper examines the role of farm diversification in achieving environmentally “safe” and socially “just” sustainability outcomes in German agriculture. Using Farm Accountancy Data Network (FADN) data from 2014–2021, we develop a novel diversification concept based on the distribution of three key farm resources — land, labour, and capital — across agricultural and non-agricultural activities. Diversification is measured through Shannon-Weaver indices, capturing both the variety and evenness of resource allocation at farm level. The analysis combines diversification trends with indicators linked to the Safe and Just Operating Space (SJOS) framework. Results show that diversification levels remain relatively stable and far below their theoretical potential. Highly diversified farms demonstrate more balanced resource use and achieve more positive sustainability outcomes, including improvements in farm income, wages, fertilizer reduction, and ecological land management. In contrast, farms with low diversification tend to improve economically at the expense of environmental performance. Transition analyses further reveal strong persistence in farm structures, with labour allocation showing particularly limited flexibility. Overall, the findings suggest that farm diversification can contribute to greater resilience and improved safe and just outcomes when implemented across multiple farm resources. However, most farms remain locked into existing specialization patterns, highlighting the need for policies and incentives that support broader and deeper diversification strategies in European agriculture. Keywords: Farm diversification, Resource shift, FADN data, German farms, Safe and Just Outcomes Citation Adenäuer, L., Kuhn, T., & Storm, H. (2026). Farm Diversification and its Role in achieving Safe and Just Outcomes: Insights from German FADN Data - Discussion paper (Version v01). BrightSpace Horizon Europe project Grant Agreement No. 101060075. https://doi.org/10.5281/zenodo.19724673----------------- Funding acknowledgement Funded by the European Union. Grant Agreement No. 101060075. Views and opinions expressed are those of the authors only and do not necessarily reflect those of the European Union or the European Commission. Neither the European Union nor the granting authority can be held responsible for them. Legal notice This document was produced under the terms and conditions of Grant Agreement No. 101060075 for the European Commission. It does not necessary reflect the view of the European Union and in no way anticipates the Commission’s future policy in this area. The European Commission is not liable for any consequence stemming from the reuse of this publication. © BrightSpace, 2026 The reuse of this document is authorised under a Creative Commons Attribution 4.0 International (CCBY 4.0) licence (https://creativecommons.org/licenses/by/4.0/). This means that reuse is allowed provided appropriate credit is given and any changes are indicated. For any use or reproduction of elements that are not owned by the BrightSpace consortium, permission may need to be sought directly from the respective right holders. Project information BrightSpace Horizon Europe project Grant Agreement No. 101060075 https://cordis.europa.eu/project/id/101060075 CALL: Innovative governance, environmental observations and digital solutions in support of the Green Deal WORK PROGRAMME Topic ID: HORIZON-CL6-2021-GOVERNANCE-01-12 EU agriculture within a safe and just operating space and planetary boundaries BrightSpace Project coordination: Wageningen Economic Research, The Hague, NL Contact: brightspace.wser@wur.nl | Website: www.brightspace-project.eu Project duration: 1 November 2022 – 31 October 2027.