The advantages of precision viticulture

In the same vineyard, the yield and quality of the grapes can vary widely. In fact, this variability in production on the land is one of the greatest challenges growers face, especially with very large vineyards. We can trace the reasons for this to the morphology of the terrain, the type of soil, the treatments and fertilizers that are used, and the microclimate - all factors that can differ even along the same row of grapes.

Up until just a few years ago, the only way to pinpoint these variations was through targeted soil sampling, a method with serious limitations as far as data granularity is concerned. But today precision viticulture allows growers to profile specific qualities and needs of the vines, with an accuracy at the level of individual plants, customizing the best possible production techniques for each one. This approach offers guaranteed returns not only with regard to quality and efficiency, but environmental impact as well.

Clearing the way to precision farming is a combination of remote sensing technologies and digitalization that are being applied to geographical science. Specifically, it’s about earth resources observation, in other words, earth imaging using satellites or drones. Here’s how it works: special video cameras equipped with hyperspectral sensors pick up the intensity of the solar light that’s reflected by the underlying vegetation. This reflectance is highly sensitive to the chlorophyll content of plants, so it serves as an indicator of plant health and vigor.

Based on these images, and with the help of expert agronomists, growers can come up with detailed farming strategies. And thanks to cutting edge geolocalization techniques, the data collected on each section of the vineyard is sent directly to farm machinery in the field, which is what makes precision viticulture possible. For every single section of land, down to the linear meter, the most effective techniques can be applied depending on the health status of each individual plant. (Some examples are green manure, leaf removal or customized fertilization.)

Figure 1 - Precision viticulture: from image to management

From a business management perspective, the introduction of precision farming can contribute to wine production in two ways:

1. By upgrading the quality of grapes, and avoiding mixing different kinds of grapes during the harvest, which would compromise the final product;
2. By boosting the profitability of agricultural operations by gleaning precise information on the vineyards, enabling growers to cut costs by optimizing inputs (for example, fertilizer, fuel, and labor).

The aim of our analysis was to verify how precision technologies impact the efficient use of factors of production at the Tenute Ruffino wineries in Tuscany. We estimated the cost function of three of their vineyards that produce high-quality grapes by using a multiple regression model. Our calculation allowed us to look at how precision farming affects total production costs.

The initial finding that emerged is that before using precision farming techniques, there was a positive correlation between the amount of high-quality grapes produced and the unit cost of production: the higher the first, the greater the second. Instead, once precision viticulture began, this ratio was inverted. In other words, the higher the share of quality grapes, the lower the unit cost, in particular with regard to savings on pesticides, fertilizers, and fuel for running machinery in the vineyards.

Beyond a doubt, the biggest impact of precision viticulture is reflected in the variable costs that the firms incur. Also positive, but to a lesser degree, is the impact on fixed costs. But the main benefit depends on what type of firm we’re talking about. There are the bigger, more structured wineries which already employ qualified personnel, and use highly-mechanized, efficient processes. For them, precision farming primarily means even higher quality grapes. The main advantage for small to medium sized wineries, instead, is coming up with a better way to manage their resources, in particular with an eye to cost efficiency.

Figure 2 - unit costs of factors of production incurred by the firm, before and after the introduction of precision viticulture techniques (input prices remaining constant)

To reap the benefits of precision farming, SMEs have to front the far-from-negligible costs associated with the use of spatial imaging and the introduction of automated machinery. So to facilitate the widespread implementation of this new production methodology, here’s what needs to be done.

• Appropriate support mechanisms for producers must be found. These may include a more cost-effective, standardized offering from satellite service providers, or producers banding together in buying consortia, in addition to government subsidies to shore up investments in advanced machinery.

• Researchers should delve more deeply into the economic impact of precision viticulture, expanding the field of investigation to a broader sample of wine producers with different business models.