Uncorking success: exploring the productivity of Italian wine farms

Over the past few decades, Italy’s wine industry has shifted from producing low-value, local wines to a modern sector that meets both domestic and international demand. Despite these achievements, the sector faces challenges such as rising production costs, climate change, and a need for enhanced sustainability, particularly affecting small and medium-sized enterprises . This paper investigates the key determinants of productivity across different farm sizes within the Italian wine sector, emphasizing the role of farm size in shaping financial performance. Using data from the Agricultural Accounting Information Network database (2008-2021), the study employs a random-effects regression model to assess the impact of various structural, management, and control variables on wine farm revenues. Findings highlight that large farms benefit more from mechanization, diversification, and the production of processed products, whereas the productivity of smaller farms is driven by organic farming, direct sales, and agritourism. Furthermore, ownership of land has a negative impact on performance across all farm sizes. EU subsidies consistently enhance productivity for all farm sizes, with a stronger effect for smaller farms. The study concludes that tailored management strategies and access to financial support are crucial for enhancing the economic performance and resilience of wine businesses in Italy, particularly small farms.