Economic assessment of sicilian loquat orchards

Abstract

The majority of Italian production of loquat (Eriobotrya japonica) derives from the Palermo province, along the northern Sicilian coast. However, this area is characterized by family orchards, traditional cultural techniques, and inadequate commercial organization. These appear to affect negatively the production costs and reduce the farmers' income, decreasing the competitiveness of Sicilian loquat orchards. This study evaluates the economic viability of Sicilian loquat orchards by means of cost-benefit analysis (CBA). In particular, for the investment assessment some financial indicators have been calculated such as net present value (NPV), discounted payback time (DPBT), and internal rate of return (IRR). The results show a low return of investment due to both the current market conditions and the high labor required.