Economic and Social Impacts of Olive Quick Decline Syndrome: Analysing Data From the Italian Farm Accountancy Network

The rapid spread of Xylella fastidiosa subsp. pauca (Xfp) in the Salento area (Apulia region, southern Italy) has caused extensive socio-economic damage to the olive oil supply chain. This research evaluates the impact of the 'Xfp treatment' on selected economic and social variables using a counterfactual approach. We applied propensity score matching and the difference-in-difference estimator to a sample of Italian Farm Accountancy Data Network panel olive-growing farms. The study compared the outcomes of farms affected by the Xfp invasion before (2008-2012) and after (2017-2021), with a control group unaffected by Xfp. The results showed that the socio-economic performance of Salento's olive-growing farms is lower than unaffected farms outside the region but comparable to similarly affected farms. Regarding the economic impact of Xfp, the Gross Operating Margin had an Average Treatment Effect on the Treated of around -<euro>837 per hectare, indicating a reduction in profitability, amounting to a total loss of <euro>132 million across the infected area. Social indicators also showed the effects of Xfp, evident in the reduction of total working hours and work units employed on Salento olive farms. The decrease was -7 h/ha, resulting in a total loss of 1,050,000 h across the entire infected area in Apulia (approximately 150,000 ha). These findings have policy implications, because they can assist policymakers in establishing a compensation budget for Apulian olive growers affected by Xfp. Identifying fair compensation is crucial for providing financial and technical support to help farmers convert their crops or adopt alternative agricultural practices.