Socio-Economic Viability of the High Nature Value Farmland under the CAP 2023–2027: The Case of a Sub-Mediterranean Region in Slovenia

Our study aimed to analyse socio-economic sustainability and the drivers of land abandonment in the Kras region of Slovenia, a representative eastern Mediterranean farmland area. We also sought to provide policy recommendations for supporting biodiversity conservation and facilitating the sustainable transition of similar High Nature Value (HNV) farming systems across Europe. The Slovenian Typical Farm Model (SiTFarm) was used to assess the economic performance of representative livestock and wine-growing farm types. Additionally, in-depth interviews with farmers were conducted to understand their perspectives on these farming systems and their preferences for alternative management strategies and policy instruments. Our findings indicate that, due to the introduction of basic income support for sustainability and complementary voluntary coupled payments, budgetary support for the livestock sector in the region is projected to increase by 27–55% in estimated gross margins during the 2023–2027 Common Agricultural Policy (CAP) period, depending on the farm type. Furthermore, farms can enhance their economic performance by converting to organic farming and enrolling in agri-environmental schemes that promote extensive grasslands management, which is crucial for biodiversity conservation. This suggests that Slovenia’s current CAP strategic plan adequately addresses the maintenance of the existing farming systems. However, the region faces significant challenges, particularly in restructuring small farms and adding value to primary farm products. These issues appear to be insufficiently addressed by the current CAP strategic plan, implying that limited progress is expected in mitigating land abandonment in the long term. Comprehensive strategies for the development of feasible HNV farming systems, aligned with biodiversity conservation recommendations, and a well-managed system of supporting institutions and policy instruments is needed to facilitate more market-oriented and sustainable development of agriculture at the local level.