Original Research Article
How are vineyards management strategies and climate-related conditions affecting economic performance? A case study of Chilean wine grape growers
Published 2022-11-03
Keywords
- production function,
- vineyard management,
- wine grape growing,
- economic performance
How to Cite
Bopp, C., Jara-Rojas, R., Engler, A. ., & Araya-Alman, M. . (2022). How are vineyards management strategies and climate-related conditions affecting economic performance? A case study of Chilean wine grape growers. Wine Economics and Policy, 11(2), 61–73. https://doi.org/10.36253/wep-12739
Abstract
In wine grape production, growers decide between alternative management strategies of the vineyard that have direct consequences on competitiveness. The aim of this study is to evaluate the impact on economic performance of four management strategies: training system, reserve quality production, irrigation method, and mechanization of labors. The data used in the study comes from face-to-face interviews to 336 wine grape growers of Central Chile, which was complemented with climatic variables retrieved from Geographic Information Systems. A log-log regression model of total value product (TVP) for the main variety grown in the vineyard was estimated, using production factors, vineyards’ attributes, management strategies and climate-related conditions as explanatory variables. An interesting contribution of this study is the identification of TVP functions for land, fertilizers, fungicides, other agrochemicals, labor, and age of vines. Our results show that the training system has the most impact on TVP, where tendone-trained vineyards demonstrated 63% higher TVP than those vertically trained when holding all other variables constant. Reserve quality production also has a positive effect on TVP, increasing it by 25% compared to vineyards producing varietal quality grapes. In contrast, the use of pressurized irrigation systems and mechanization in harvesting do not present a significant effect on TVP. The findings of this paper represent an advance in the understanding of the economic performance factors associated with wine grape growing and could serve to guide on-farm decisions and sectoral policies in pursuing the competitive development of wine grape growers.
References
[1] Pappalardo, G., Scienza, A., Vindigni, G., D’Amico, M. (2013). Profitability of wine grape growing in the EU member states. J. Wine Res. 24, 59–76. https://doi.org/10.1080/09571264.2012.724392
[2] Newton, S.K., Gilinsky, A., Jordan, D. (2015). Differentiation strategies and winery financial performance: An empirical investigation. Wine Econ. Policy 4, 88–97. https://doi.org/10.1016/j.wep.2015.10.001
[3] Tudisca, S., Di Trapani, A.M., Sgroi, F., Testa, R. (2013). The cost advantage of sicilian wine farms. Am. J. Appl. Sci. 10, 1529–1536. https://doi.org/10.3844/ajassp.2013.1529.1536
[4] Cusmano, L., Morrison, A., Rabellotti, R. (2010). Catching up trajectories in the wine sector: A comparative study of Chile, Italy, and South Africa. World Dev. 38, 1588–1602. https://doi.org/10.1016/j.worlddev.2010.05.002
[5] Sellers, R., Alampi-Sottini, V. (2016). The influence of size on winery performance: Evidence from Italy. Wine Econ. Policy 5, 33–41. https://doi.org/10.1016/j.wep.2016.03.001
[6] Smith, K. (2007). Technological and economic dynamics of the world wine industry: An introduction. Int. J. Technol. Glob. 3, 127–137. https://doi.org/10.1504/IJTG.2007.014329
[7] Anderson, K., Norman, D., Wittwer, G. (2001). Globalization and the World’s Wine Markets: Overview.
[8] Castillo, J.S., Compés, R. (2013). The wine economy in Spain and the world. Cajamar Caja Rural.
[9] Fleming, E., Mounter, S., Grant, B., Griffith, G., Villano, R. (2014). The New World challenge: Performance trends in wine production in major wine-exporting countries in the 2000s and their implications for the Australian wine industry. Wine Economics and Policy, 3(2), 115-126.
[10] Santos, M., Rodríguez, X. A., Marta-Costa, A. (2021). Productive efficiency of wine grape producers in the North of Portugal. Wine Economics and Policy, 10(2), 3-14. doi: 10.36253/wep-8977
[11] Moreira, V.H., Troncoso, J.L., Bravo-Ureta, B.E. (2011). Technical efficiency for a sample of Chilean wine grape producers: A stochastic production frontier analysis. Cienc. e Investig. Agrar. 38, 321–329. https://doi.org/10.4067/S0718-16202011000300001
[12] Engler, A., Jara-Rojas, R., Bopp, C. (2016). Efficient use of water resources in vineyards: A recursive joint estimation for the adoption of irrigation technology and scheduling. Water Resour. Manag. 30. https://doi.org/10.1007/s11269-016-1493-5
[13] ODEPA (Office of Agricultural Studies and Policies). (2016). Foreign trade statistics: Advance by product of exports/imports (In Spanish). Retrieved from: https://www.odepa.gob.cl/estadisticas-del-sector/comercio-exterior. Visited September 2021.
[14] FNE (National Economic Prosecutor's Office). (2017). “FNE rules out competitive abuses against wine grape producers” (In Spanish). Retrieved from: https://www.fne.gob.cl/fne-descarta-abusos-competitivos-contra-productores-de-uva-vinifera-pero-detecta-otras-posibles-imperfecciones-en-este-mercado-y-las-informa-al-ministerio-de-agricultura-sag-y-odepa/. Visited September 2021.
[15] Czyżewski, A., Smędzik-Ambroży, K. (2015). Specialization and diversification of agricultural production in the light of sustainable development. J. Int. Stud. 8, 187–196. https://doi.org/10.14254/2071-8330.2015/8-
[16] Keller, M. (2010). Managing grapevines to optimise fruit development in a challenging environment: A climate change primer for viticulturists. Aust. J. Grape Wine Res. 16, 56–69. https://doi.org/10.1111/j.1755-0238.2009.00077.x
[17] Manandhar, A., Zhu, H., Ozkan, E., Shah, A. (2020). Techno-economic impacts of using a laser-guided variable-rate spraying system to retrofit conventional constant-rate sprayers. Precis. Agric. 21, 1156–1171. https://doi.org/https://link.springer.com/article/10.1007/s11119-020-09712-8
[18] Galindro, A., Santos, M., Santos, C., Marta-Costa, A., Matias, J., Cerveira, A. (2018). Wine productivity per farm size: A maximum entropy application. Wine Econ. Policy 7, 77–84. https://doi.org/10.1016/j.wep.2018.03.001
[19] Urso, A., Timpanaro, G., Caracciolo, F., Cembalo, L. (2018). Efficiency analysis of Italian wine producers. Wine Econ. Policy 7, 3–12. https://doi.org/10.1016/j.wep.2017.11.003
[20] Smart, R., Dick, J., Gravett, I, Fisher, B. (1990). Canopy management to improve grape yield and wine quality - Principles and practices. S. Afr. J. Enol. Vitic. 11, No. 1.
[21] Keller, M. (2020). The Science of Grapevines. Third Edition, Academic Press. Elsevier
[22] Chilean Natural Resources Information Center (CIREN). Agroclimatic information (online). Retrieved from: https://www.ciren.cl/productos/informacion-agroclimatica/. Visited by: September, 2020.
[23] Chinnici, G., Pecorino, B., Rizzo, M., Rapisarda, P. (2013). Evaluation of the performances of wine producers in Sicily1. Calitatea 14, 108.
[24] StataCorp. (2017). Stata Statistical Software: Release 15. College Station, TX: StataCorp LLC.
[25] Njuki, E., Bravo-Ureta, B.E. (2018). Irrigation water use and technical efficiencies: Accounting for technological and environmental heterogeneity in U.S. agriculture using random parameters. Water Resour. Econ. 24, 1–12.
[26] Sheng, Y., Zhao, S., Nossal, K., Zhang, D. (2015). Productivity and farm size in Australian agriculture: reinvestigating the returns to scale. Australian Journal of Agricultural and Resource Economics, 59(1), 16-38.
[27] Maughan, T., Pace, M., Black, B. (2017). Grape vine management.
[28] Valdés‐Gómez, H., Araya‐Alman, M., Pañitrur‐De la Fuente, C., Verdugo‐Vásquez, N., Lolas, M., Acevedo‐Opazo, C., Gary, C., Calonnec, A. (2017). Evaluation of a decision support strategy for the control of powdery mildew (Erysiphe necator [Schw.] Burr.), in grapevine in the central region of Chile. Pest management science, 73(9), 1813-1821.
[29] Pañitrur-De La Fuente, C., Valdes-Gómez, H., Roudet, J., Acevedo Opazo, C., Verdugo-Vasquez, N., Araya-Alman, M., Lolas, M., Moreno, Y., Fermaud, M. (2018). Classification of winegrape cultivars in Chile and France according to their susceptibility to Botrytis cinerea related to fruit maturity. Australian Journal of Grape and Wine Research 24(2):145-157.
[30] Silva-Valderrama I., Toapanta D., Miccono M., Lolas M., Díaz G., Cantu, D., Castro A. (2021). Biocontrol potential of grapevine endophytic and rhizospheric fungi against trunk pathogens. Front. Microbiol. 11:614620. doi: 10.3389/fmicb.2020.614620
[31] Altimira, F., Vitta, N., Godoy, P., Tapia, E. (2020). Microbial pesticides for the integrated management of Lobesia botrana in grapevines. Newsletter INIA Nº 419. Agricultural Research Institute (INIA). Regional Research Center La Platina, La Pintana, Chile. 96 p.
[32] Curkovic, T., Durán, M., Ferrera, C. (2013). Control of Brevipalpus chilensis Baker (Acari: Tenuipalpidae) with agricultural detergents under laboratory and field conditions. Chilean Journal of Agricultural & Animal Sciences, ex Agro-Ciencia. 29 (1), 73-82.
[33] Sazo, L., Araya, J., de la Cerda, J. (2008). Effect of a siliconate coadjuvant and insecticides in the control of mealybug of grapevines, Pseudococcus viburni (Hemiptera: Pseudococcidae). International Journal of Agriculture and Natural Resources, 35(2), 215-222. https://dx.doi.org/10.4067/S0718-16202008000200012
[34] Cogato, A., Pezzuolo, A., Sørensen, C., De Bei, R., Sozzi, M., Marinello, F. (2020). A GIS-based multicriteria index to evaluate the mechanisability potential of Italian vineyard area. Land, 9(11), 469.
[35] White, R. (2003). Soils for fine wines. Oxford University Press.
[36] Grigg, D., Methven, D., De Bei, R., Rodríguez, C., Dry, P., Collins, C. (2018). Effect of vine age on vine performance of Shiraz in the Barossa Valley, Australia. Australian journal of grape and wine research, 24(1), 75-87.
[37] Considine, J. (2004). Grapevine productivity and yield components: A case study using field vines of Zante currant. Australian journal of grape and wine research, 10(2), 108-115.
[2] Newton, S.K., Gilinsky, A., Jordan, D. (2015). Differentiation strategies and winery financial performance: An empirical investigation. Wine Econ. Policy 4, 88–97. https://doi.org/10.1016/j.wep.2015.10.001
[3] Tudisca, S., Di Trapani, A.M., Sgroi, F., Testa, R. (2013). The cost advantage of sicilian wine farms. Am. J. Appl. Sci. 10, 1529–1536. https://doi.org/10.3844/ajassp.2013.1529.1536
[4] Cusmano, L., Morrison, A., Rabellotti, R. (2010). Catching up trajectories in the wine sector: A comparative study of Chile, Italy, and South Africa. World Dev. 38, 1588–1602. https://doi.org/10.1016/j.worlddev.2010.05.002
[5] Sellers, R., Alampi-Sottini, V. (2016). The influence of size on winery performance: Evidence from Italy. Wine Econ. Policy 5, 33–41. https://doi.org/10.1016/j.wep.2016.03.001
[6] Smith, K. (2007). Technological and economic dynamics of the world wine industry: An introduction. Int. J. Technol. Glob. 3, 127–137. https://doi.org/10.1504/IJTG.2007.014329
[7] Anderson, K., Norman, D., Wittwer, G. (2001). Globalization and the World’s Wine Markets: Overview.
[8] Castillo, J.S., Compés, R. (2013). The wine economy in Spain and the world. Cajamar Caja Rural.
[9] Fleming, E., Mounter, S., Grant, B., Griffith, G., Villano, R. (2014). The New World challenge: Performance trends in wine production in major wine-exporting countries in the 2000s and their implications for the Australian wine industry. Wine Economics and Policy, 3(2), 115-126.
[10] Santos, M., Rodríguez, X. A., Marta-Costa, A. (2021). Productive efficiency of wine grape producers in the North of Portugal. Wine Economics and Policy, 10(2), 3-14. doi: 10.36253/wep-8977
[11] Moreira, V.H., Troncoso, J.L., Bravo-Ureta, B.E. (2011). Technical efficiency for a sample of Chilean wine grape producers: A stochastic production frontier analysis. Cienc. e Investig. Agrar. 38, 321–329. https://doi.org/10.4067/S0718-16202011000300001
[12] Engler, A., Jara-Rojas, R., Bopp, C. (2016). Efficient use of water resources in vineyards: A recursive joint estimation for the adoption of irrigation technology and scheduling. Water Resour. Manag. 30. https://doi.org/10.1007/s11269-016-1493-5
[13] ODEPA (Office of Agricultural Studies and Policies). (2016). Foreign trade statistics: Advance by product of exports/imports (In Spanish). Retrieved from: https://www.odepa.gob.cl/estadisticas-del-sector/comercio-exterior. Visited September 2021.
[14] FNE (National Economic Prosecutor's Office). (2017). “FNE rules out competitive abuses against wine grape producers” (In Spanish). Retrieved from: https://www.fne.gob.cl/fne-descarta-abusos-competitivos-contra-productores-de-uva-vinifera-pero-detecta-otras-posibles-imperfecciones-en-este-mercado-y-las-informa-al-ministerio-de-agricultura-sag-y-odepa/. Visited September 2021.
[15] Czyżewski, A., Smędzik-Ambroży, K. (2015). Specialization and diversification of agricultural production in the light of sustainable development. J. Int. Stud. 8, 187–196. https://doi.org/10.14254/2071-8330.2015/8-
[16] Keller, M. (2010). Managing grapevines to optimise fruit development in a challenging environment: A climate change primer for viticulturists. Aust. J. Grape Wine Res. 16, 56–69. https://doi.org/10.1111/j.1755-0238.2009.00077.x
[17] Manandhar, A., Zhu, H., Ozkan, E., Shah, A. (2020). Techno-economic impacts of using a laser-guided variable-rate spraying system to retrofit conventional constant-rate sprayers. Precis. Agric. 21, 1156–1171. https://doi.org/https://link.springer.com/article/10.1007/s11119-020-09712-8
[18] Galindro, A., Santos, M., Santos, C., Marta-Costa, A., Matias, J., Cerveira, A. (2018). Wine productivity per farm size: A maximum entropy application. Wine Econ. Policy 7, 77–84. https://doi.org/10.1016/j.wep.2018.03.001
[19] Urso, A., Timpanaro, G., Caracciolo, F., Cembalo, L. (2018). Efficiency analysis of Italian wine producers. Wine Econ. Policy 7, 3–12. https://doi.org/10.1016/j.wep.2017.11.003
[20] Smart, R., Dick, J., Gravett, I, Fisher, B. (1990). Canopy management to improve grape yield and wine quality - Principles and practices. S. Afr. J. Enol. Vitic. 11, No. 1.
[21] Keller, M. (2020). The Science of Grapevines. Third Edition, Academic Press. Elsevier
[22] Chilean Natural Resources Information Center (CIREN). Agroclimatic information (online). Retrieved from: https://www.ciren.cl/productos/informacion-agroclimatica/. Visited by: September, 2020.
[23] Chinnici, G., Pecorino, B., Rizzo, M., Rapisarda, P. (2013). Evaluation of the performances of wine producers in Sicily1. Calitatea 14, 108.
[24] StataCorp. (2017). Stata Statistical Software: Release 15. College Station, TX: StataCorp LLC.
[25] Njuki, E., Bravo-Ureta, B.E. (2018). Irrigation water use and technical efficiencies: Accounting for technological and environmental heterogeneity in U.S. agriculture using random parameters. Water Resour. Econ. 24, 1–12.
[26] Sheng, Y., Zhao, S., Nossal, K., Zhang, D. (2015). Productivity and farm size in Australian agriculture: reinvestigating the returns to scale. Australian Journal of Agricultural and Resource Economics, 59(1), 16-38.
[27] Maughan, T., Pace, M., Black, B. (2017). Grape vine management.
[28] Valdés‐Gómez, H., Araya‐Alman, M., Pañitrur‐De la Fuente, C., Verdugo‐Vásquez, N., Lolas, M., Acevedo‐Opazo, C., Gary, C., Calonnec, A. (2017). Evaluation of a decision support strategy for the control of powdery mildew (Erysiphe necator [Schw.] Burr.), in grapevine in the central region of Chile. Pest management science, 73(9), 1813-1821.
[29] Pañitrur-De La Fuente, C., Valdes-Gómez, H., Roudet, J., Acevedo Opazo, C., Verdugo-Vasquez, N., Araya-Alman, M., Lolas, M., Moreno, Y., Fermaud, M. (2018). Classification of winegrape cultivars in Chile and France according to their susceptibility to Botrytis cinerea related to fruit maturity. Australian Journal of Grape and Wine Research 24(2):145-157.
[30] Silva-Valderrama I., Toapanta D., Miccono M., Lolas M., Díaz G., Cantu, D., Castro A. (2021). Biocontrol potential of grapevine endophytic and rhizospheric fungi against trunk pathogens. Front. Microbiol. 11:614620. doi: 10.3389/fmicb.2020.614620
[31] Altimira, F., Vitta, N., Godoy, P., Tapia, E. (2020). Microbial pesticides for the integrated management of Lobesia botrana in grapevines. Newsletter INIA Nº 419. Agricultural Research Institute (INIA). Regional Research Center La Platina, La Pintana, Chile. 96 p.
[32] Curkovic, T., Durán, M., Ferrera, C. (2013). Control of Brevipalpus chilensis Baker (Acari: Tenuipalpidae) with agricultural detergents under laboratory and field conditions. Chilean Journal of Agricultural & Animal Sciences, ex Agro-Ciencia. 29 (1), 73-82.
[33] Sazo, L., Araya, J., de la Cerda, J. (2008). Effect of a siliconate coadjuvant and insecticides in the control of mealybug of grapevines, Pseudococcus viburni (Hemiptera: Pseudococcidae). International Journal of Agriculture and Natural Resources, 35(2), 215-222. https://dx.doi.org/10.4067/S0718-16202008000200012
[34] Cogato, A., Pezzuolo, A., Sørensen, C., De Bei, R., Sozzi, M., Marinello, F. (2020). A GIS-based multicriteria index to evaluate the mechanisability potential of Italian vineyard area. Land, 9(11), 469.
[35] White, R. (2003). Soils for fine wines. Oxford University Press.
[36] Grigg, D., Methven, D., De Bei, R., Rodríguez, C., Dry, P., Collins, C. (2018). Effect of vine age on vine performance of Shiraz in the Barossa Valley, Australia. Australian journal of grape and wine research, 24(1), 75-87.
[37] Considine, J. (2004). Grapevine productivity and yield components: A case study using field vines of Zante currant. Australian journal of grape and wine research, 10(2), 108-115.