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Cost-benefit analysis: A comparison between conventional and organic olive growing in the Mediterranean Area

  • Authors: Sgroi, F.; Foderà, M.; Di Trapani, A M.; Tudisca, S.; Testa, R.
  • Publication year: 2015
  • Type: Articolo in rivista (Articolo in rivista)
  • Key words: Biogas olive; CAP subsidy; Financial analysis; Market price; Organic farming; Environmental Engineering; Management, Monitoring, Policy and Law; Nature and Landscape Conservation
  • OA Link: http://hdl.handle.net/10447/159253

Abstract

The conversion from conventional to organic management of olive growing has many benefits, such as increase of biodiversity, reduction of soil erosion and lower environmental impact. Since olive represents a main crop in the Mediterranean area, from a social, economic as well as environmental point of view, the aim of this paper has been to determine if the conversion from conventional to organic olive growing can increase the profitability of the farmer in Sicilian farms. Economic analysis has been carried out by means of cost-benefit analysis and financial indicators (NPV, B0/C0, IRR) show that organic growing would allow a better profitability for organic olive farms respect to conventional ones. This is primarily due to CAP subsidy and to market price of organic olive oil, which is currently 21% higher than the conventional olive oil price.