Farming economy in function of the land area: the case of Douro winegrowing systems

Abstract

Companies use a set of production factors that they combine and transform into a final product. This process gives rise to a set of costs and revenues, respectively, which are at the root of the farms' profitability. Several factors influence and conditionate the quantities and types of the used production factors. The area of the land cultivated is an important factor that has been highlighted in the literature. This work aims to analyse the productive systems that characterise grape production in the Portuguese Douro region, at the level of their inputs and outputs and associated economic values, as well as to identify whether the dimensions of production units influence the obtained values. To achieve this purpose, a face-to-face survey was used to collect specific input-output information from a sample of 110 wine-growing farms. The findings show that the quantities of production factors and corresponding costs as well as its yields change according to the size of the farm. In general, farms with an average size of 10 to 20 hectares of vineyard area stand out as those which present a better balance between the yields and costs, and better compensate the remuneration of the entrepreneurial factor and the capital involved in the company.