The influence of labour costs on the sustainability of douro wine farms: an application of ABM

Abstract:

In Portugal, labour availability has been revealed as a key factor for the activity, particularly in mountain viticulture. The latest statistics present worrying values that could undermine the production of quality wine and the attractive set of wine landscapes considered as a potential resource for tourism development. The Douro Region is one of the main Portuguese wine regions, characterized by a prominent and accentuated mountain viticulture. This paper aims to simulate the behaviour of its farms about the changes in the price of labour, through Agent-Based Models (ABM). The MATLAB software was used to obtain periodic functions adjusted to the data that characterize the relevant variables, obtained from face-to-face surveys of 110 farms, and taking into account the data provided by PTFADN. Subsequently, the ABM software (NETLOGO) was selected to simulate the next 100 years, familiarizing the real dynamics based on the previously considered data. Depending on the price of labour at the end of the simulation horizon, with a grape price of 0,77 €/kg, from the 300 initially existing farms survive between 127 and 231 (42,3 - 77%). In a more optimistic scenario, with a grape price of 1,17 €/kg, the survival rate ranges between 72.1 and 93.2%.

Keywords:
agent-based model; wine sector; performance; sustainability; labour