Environmental efficiency of wine grape production in Mendoza, Argentina

Abstract

The natural characteristics are a valuable asset for the production of wine grapes, but the availability of quality water and the composition of the soil are decisive in semi-arid areas. The province of Mendoza is a prestigious region for the production of wine that is going through a period of water scarcity, which implies a greater use of groundwater that could compromise the availability of resources and trigger salinity levels. This paper evaluates the environmental performance of winegrowers in the face of a productive threat such as the saline content in irrigation water. We estimate environmental efficiency based on a directional output distance function using the salinity hazard of irrigation as an undesirable output. The average environmental performance is 0.88 and it can be reduced by participating in producer groups, receiving technical assistance, increasing the density of the vineyard, and receiving an energy subsidy for irrigation. In addition, the shadow price of the salinity hazard reveals that higher salinity content in irrigation water and soil characteristics cause excessive irrigation at the expense of environmental and economic performance. Furthermore, the pre-existing market price relationship, water balance and district characteristics can deflate shadow prices, but only vineyards with joint water sources can benefit from this.