ECONOMIC PROFITABILITY ASSESSMENT OF MEDITERRANEAN OLIVE GROWING SYSTEMS

A. I. De Luca, G. Gulisano, G. Falcone, T. Stillitano, A. Strano, E. Spada

Abstract: In Italy, olive cultivation is mainly widespread in southern regions where it constitutes a key element of rural economy. Nevertheless, in such areas olive growing is affected by several critical factors related to farm management, by giving rise to economically unsustainable productions. In particular, olive growing is widely represented by small and medium-scale farms, as well as by traditional olive orchards with low productivity, low level of mechanization and, therefore, high production costs. Hence, more efficient management strategies and farming investments are needed to optimize and improve the olive farm’s profitability, by increasing their productivity and competitiveness for moving towards a real economic sustainability. In this study, different olive production systems located in Southern Italy have been compared in order to assess their economic performance. The economic sustainability evaluation of investments has been carried out through a joint use of Life Cycle Costing (LCC) method and economic indicators. This integrated approach has allowed taking into account all cost and revenue factors of investments incurred throughout the life cycle of production processes. Results showed a suitable level of profitability of all scenarios, also thanks to contribution of public subsidies. Furthermore, our findings highlighted the importance of innovative management strategies, in terms of both olive orchard structure renewing and mechanical equipment adaptation in order to decrease agricultural practices costs and to increase the production yield.

Keywords: economic analysis; Life Cycle Costing (LCC); olive farms; organic and conventional agriculture

Date published: 2017-09-01