Resumen de Quantification of production inefficiencies as a cost-savings tool for increasing the viability of traditional olive farms

Antonio Ruz Carmona, Manuel Parras Rosa , Sergio Colombo

• Just like any other businesspeople, farmers have to take decisions every day that are crucial for the survival of their farms. They often wonder “Is the structure of my farm competitive and sustainable in time? Should I expand its size or modify the management? And if so, by how much? However, in many cases they do not have the necessary information to take good decisions. In this paper, we develop a methodology to estimate the production costs of farms as a means of assessing the impact of several structural inefficiencies. In this way, we show how changes in farm management can reduce costs, so increasing farm sustainability. Results show that significant economies of scale can be achieved in production, and that downtimes, farm fragmentation and dispersion have a substantial effect on production costs and profit margins. Furthermore, through cooperative forms of production and management, traditional farms can become more sustainable, while at the same time fostering rural and territorial development.