The value of farm diversification is unquestionable especially in terms of additional income generation, income stability and easing the employment difficulties of agricultural producers; its importance has recently been in the focus of agricultural and rural policies. The research purpose was to describe the situation of farm diversification in Hungary and to analyse the characteristics of diversified farms, as well as to determine which factors influence the extent and direction of diversification. The research method is based on statistical data analysing and questionnaire survey. Contrary to the above my analyses showed that the share of diversified farms is rather low in the small-scale, semi-commercial and part-time farms; its wide scale distribution is hindered by several factors. Based on the analyses I found that in private farms and in corporate farms it is characteristic that farm diversification activities are closely connected to the main activity of the farm, but they are of different type. I could state that the share of diversified farms is more significant in the labour-intensive farms and primarily in commercial farms. The share of young farmers and farmers in active age, qualified and with a full-time job is higher in the diversified and organic farms.

The impacts of agricultural policies are decisive on the agricultural sector, especially in the case of the European Union’s (EU) Common Agricultural Policy (CAP). The 2013 CAP reform introduced several new measures. In budgetary terms, basic payment and greening were the most significant ones. Besides, coupled supports, young farmer and small farmers scheme should be mentioned. To reveal the changes caused by these measures, the time horizon of the study is 2013−2017. Since the subsidies represent a significant part of the income generated in the agricultural sector, the basic hypothesis of the study is that the production units concerned (individual farms, private enterprises) gave economically rational answers. In practice, this means trying to fully adapt to the changes to maximize support. Based on the analysed datasets (Hungarian Central Statistical Office and Hungarian State Treasury), it became evident that farmers responded rationally: splitting up farms against capping, moving towards the lowest resistance to comply with greening, plus associating them with the extra support of coupled payments. Generational renewal is a key issue; however, the present form of young farmers’ scheme needs to be refined to be more effective. Small farmers scheme is a good opportunity for farmers with less than 5.5 ha and most of the concerned farmers chose well. However, there are about 6,000 farms that are too small for the standard system, while 772 farms that are too large for the small farmers scheme.