Technical and Scale Efficiency of farms producing grapes for wine

Abstract

climatechange and the subsequent requirements to comply with environmental standards, continuoustechnological change, and the need to adapt it, adjust, and remain competitive. The COVID-19 pandemic and the economic hardship it brought about, followed by the current energy crisis,make it imperative to address issues of competitiveness and efficiency of farm units. Theseunfavorable developments particularly affect mountainous and disadvantaged rural areassuch as the Region of Western Macedonia in Greece. Furthermore, the decarbonizationprocess that this region is undergoing, leads to a period of uncertainty, especially in relationto employment. The cultivation of vineyards and wine production are dominant economicactivities with Xinomavro being the main grape for wine variety. The efficiency of grape-producing farms are considered important for the whole wine supply chain. The objective of this paper is to estimate the technical and scale efficiency of wine-related agricultural firms in the region of Western Macedonia, by applying the DEA methodology. An output-oriented empirical model was applied for the estimation of technical and scale efficiency of farms producing grapes for wine. Keywords: technical efficiency, scale efficiency, wine grape cultivation, Western Macedonia, wineries