Survey evidence from three Central European Countries (Czech Republic, Hungary and Poland) is analysed to identify the degree of non-agricultural farm diversification and the factors facilitating or impeding it in individual and corporate farms. The effect of diversification on rural job creation and household incomes is investigated. The results indicate that the level of diversification is relatively small and enterprise diversification by farmers is unlikely to generate sufficient new jobs to solve the problem of high rural unemployment. The attempt to transpose the West European model of agricultural diversification to the associated countries via the SAPARD programme is questionable, as non-farm centric rural policies appear to be more appropriate.