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The heterogeneity in income variability across Slovenian farms and time is explained by subsidies received by farm, off-farm income received by farm, and farm characteristics. Unbalanced and balanced farm-level panel data from the Slovenian farm accountancy data network are used to estimate coefficients of variation for gross farm revenues in less favoured areas (LFAs) and non-LFAs over the period 2004 to 2013. Gross farm income slightly increased over time with cyclical oscillations and an increase in the role of subsidies. Our estimations suggest that subsidies and off-farm income for non-LFA farms and farm specialisation for both LFA and non-LFA farms reduce farm income risk, whilst subsidies and farm size for LFA farms, and financial immobility for both LFA and non-LFA farms increase farm income risk. There is a non-linear relationship between farm size and income risk for LFA farms.

ASSESSING AND UNDERSTANDING THE DRIVERS OF FARM INCOME RISK: EVIDENCE FROM SLOVENIA