Strategy to increase the farm competitiveness

Abstract

Italy’s wine-growing production structure is highly pulverized. So, for many wine-growing farms lowering the production cost represents the only way of gaining a competitive advantage. Production at average unit costs lower than competitors allows to improve profitability. Among farming operations, winter pruning and tying of productive vine-branches require a high human labor. For this reason the paper presents the results of research conducted on a sample of Sicilian wine-producing farms in order to study the cost-effectiveness to make the pruning and the subsequent ligation of productive branches with tools that facilitate the work. The economic analysis, after the determination of minimum optimum size, shows that the investment is suitable for both large or small farms. This denotes how the process innovation could represent a way to achieve a cost leadership and improve profit margin.