Economic Sustainability of Extensive Olive Farms in Algeria: Cost and Profitability Analysis

Abstract

Algerian olive production relies heavily on extensive, rain-fed systems that remain important for rural livelihoods, but their economic viability has yet to be thoroughly studied. This study evaluates the economic performance of extensive olive farms based on production costs, revenue, net margin, and the break-even point. A field survey was conducted among 38 farms located in the wilayas of Bejaia, Bouira, and Tizi Ouzou, with an average area of 3.78 ha. The results show overall positive profitability, with an average net margin of 466,611.5 DZD per farm, despite significant variability among farms. Production costs are primarily influenced by low productivity and high labor requirements, particularly for harvesting and pruning operations. The relatively low break-even point, estimated at 53,470.7 ± 83,859.6 DZD per farm, corresponding to approximately 0.53 metric tons of olives, indicates that most farms are able to cover their costs, but their performance remains sensitive to variations in yields, weather conditions, and labor costs. These results highlight the continued economic viability of extensive rain-fed olive cultivation, while emphasizing the need to improve local value addition, develop appropriate mechanization, and promote agroecological practices in order to strengthen its economic sustainability.