A Comparative Cost-Benefit Analysis of Conventional and Organic Hazelnuts Production Systems in Center Italy

Giuseppe Coppola, Michele Costantini, Luigi Orsi, Davide Facchinetti, Francesco Santoro, Domenico Pessina and Jacopo Bacenetti
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Giuseppe Coppola: Department of Environmental Science and Policy, University of Milan, 20133 Milano, Italy
Michele Costantini: Department of Environmental Science and Policy, University of Milan, 20133 Milano, Italy
Luigi Orsi: Department of Environmental Science and Policy, University of Milan, 20133 Milano, Italy
Davide Facchinetti: Department of Agricultural and Environmental Sciences, University of Milan, 20133 Milano, Italy
Francesco Santoro: Department of Agricultural and Environmental Science, Università degli Studi di Bari Aldo Moro, Via G. Amendola 165/A, 70126 Bari, Italy
Domenico Pessina: Department of Agricultural and Environmental Sciences, University of Milan, 20133 Milano, Italy
Jacopo Bacenetti: Department of Environmental Science and Policy, University of Milan, 20133 Milano, Italy

Agriculture, 2020, vol. 10, issue 9, 1-16

Abstract: In this study, the economic profitability of hazelnut production in central Italy using conventional and organic farming systems was evaluated using the cost–benefit analysis methodology. Viterbo’s province is the leading province in Italy in terms of quantity produced. Three indicators were calculated for both farming systems: net present value, payback time, internal rate of return. The analysis was conducted utilizing primary data collected by means of interviews and surveys with local farmers and organizations of producers. The collected production data refer to the decade 2008–2018; a global area of 100.34 ha and 76.14 ha were considered for conventional and organic cultivation, respectively. Sensitivity analysis was carried out considering different discount rates, price variability, and inflation rates. The net present value is equal to 92,800 €/ha and to 3778 €/ha, the payback time is 10.47 years and 42.94 years, while the internal rate of return is 12.2% and 1.1% for the conventional and organic production systems, respectively. The conventional production system performs significantly more remuneratively, considering that the price premium paid by the market for the organic product and the subsidies granted to organic farmers are not sufficient to balance the lower yield.

Keywords: organic and conventional production; hazelnuts; cost-benefit analysis; net present value; internal rate of return; payback time (search for similar items in EconPapers)
JEL-codes: Q1 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 (search for similar items in EconPapers)
Date: 2020
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