A simulation of the economic impact of biological innovations in horticultural farms in South of Italy

This paper analyses the potential economic impact, at farm level, of introducing new varieties of vegetable crops in southern horticultural farms. Economic analysis is focused on the areas where the early adopters will probably be located, chosen by applying an economic statistics indicator, and preceded by a study of the structural characteristics of the farms in the areas in question, according to their ability to influence the rate of adoption of innovations. Moreover, a field survey was developed in order to discover the latent demand for these kinds of innovation also in terms of technical compatibility. The analysis is based on a quantitative evaluation by applying a budget simulation by means of which the elasticity coefficient of the main economic indicators with respect to yield is estimated. An assessment of price break-even point, quantity, variable costs and fixed costs completed this analysis of the economic impact. The results show that farmers are very interested in these types of innovation, which fit in nicely with how their businesses are structured. They appreciate the positive impact that the introduction of new varieties can have; on the one hand, reducing production costs while increasing net income in all three scenarios (conservative, intermediate and favorable), and on the other, offering wide margins between break-even point and the current levels of the variables most capable of influencing the economic performance of their businesses.

Keywords: Biological innovations, horticultural farms, economic impact

Jel codes: Q12, Q16

Paolo Cupo, Alessandra Borrello, Simulazione dell’impatto economico delle innovazioni biologiche in aziende orticole meridionali in "ECONOMIA AGRO-ALIMENTARE" 3/2011, pp 107-128, DOI: 10.3280/ECAG2011-003007