ECONOMIC EVALUATION OF SHORT-TERM DECISIONS IN WINEGROWING FARMS

Abstract

The majority of small sized Sicilian winegrowing farms are placed in the first part of the supply chain. In this way they are subjected to the grapes prices fixed by the wineries, becoming price takers. This situation determines marginal revenues lower than average costs and in short-term a reduction of farmer income that it can allow to farm bankruptcy. In this context farmer should adopt economic strategies in order to obtain higher profit in a more and more competitive market. The aim of this paper is to understand whether, decreasing labor cost in short-term by means of process innovation, average costs of small sized Sicilian winegrowing farm do not exceed marginal revenues.