Effective productivity management of mixed flower farms

Primary sector in Italy: profitability dynamics and relationship with the international economic crisis

Purpose

This paper investigates the income dynamics of Italian primary sector, during and after the international economic crisis. It focuses on three research questions: what has been the evolution of the main profitability ratios of agricultural enterprises in recent years? After the crisis, have the surviving farms increased their profitability? Has the profitability been different also in relation to the geographic location?

Design/methodology/approach

Income dynamics of a sample of companies have been analyzed, obtaining the 10-year evolution of the average value of three income indices (return on equity [ROE], return on assets [ROA] and return on sales [ROS]). Statistical elaborations and the analysis of variance (ANOVA) method have been used.

Findings

The years of the international economic crisis are often characterized by higher incomes than the following ones. The descending trend involves all three national macroareas of Italy, although characterized by considerable socioeconomic differences.

Research limitations/implications

The study considers only the society that survived the crisis, so, presumably, the strongest. Moreover, other ratios should be considered in order to have a more complete view.

Practical implications

Public policymakers could use this study for a better intervention in support of agricultural and agro-industrial activities.

Social implications

The careful economic and financial analysis of the sector favors the relaunching strategies of the Italian primary sector in which many employees work.

Originality/value

The research contributes to the literature by providing a quantitative analysis of the dynamics of the sector, through the comparative information that may be derived from financial statements.