survey

Ital. J. Food Sci., vol. 27 - 2015 1

- Keywords: direct sales, entrepreneurial strategies, short supply chain, small and medium enterprises (SME) -

Socio-economic aSSeSSment 
of direct SaleS in Sicilian farmS

S. tudiSca, a.m. di trapani, f. Sgroi* and r. teSta
Department of Agricultural and Forestry Sciences, University of Palermo, 

Viale delle Scienze, Edificio 4, 90128 Palermo, Italy
*Corresponding author: Tel. +39 091 23896615, Fax +39 091 484035,

email: filippo.sgroi@unipa.it

AbstrAct

Many farmers today adopt direct sales as an entrepreneurial strategy in order to achieve a com-
petitive advantage. the aim of this study has been to analyze the role that direct sales play in si-
cilian farms and how the short food supply chain is able to valorize the endogenous resources of 
rural areas and increase the net income of farmer. Our results showed that direct sales, in con-
junction with conventional sales, can represent a growing opportunity for farmers and lead to an 
improvement in the economic performances of agricultural businesses, an increase in farm in-
vestments and the creation of new job opportunities.



2 Ital. J. Food Sci., vol. 27 - 2015

1. IntrOductIOn

competitive advantage represents the result 
of a strategy that leads an enterprise to occupy 
and maintain a favorable position in the market 
in which it operates, thereby obtaining a higher 
profitability than its competitors (tudIscA et al., 
2013a). In order to compete in the global mar-
ket, farmers have to be able to change their en-
trepreneurial strategies and improve their eco-
nomic performance, thus incorporating ‘add-
ed value’ (chInnIcI et al., 2013a; sturIAle and 
scuderI, 2013; VeIdAl and KOrnelIussen, 
2013). the higher profit margin obtained allows 
a higher level of self-financing and a greater re-
turn on the invested risk capital (sAnterAMO 
et al., 2012). considering the difficulties that 
farms have to be competitive (high production 
costs, low sale prices of agricultural products, 
shortage of labour), direct sales could represent 
a way to achieve a competitive advantage and 
improve profit margins.

direct sales, through the reduction of intermedi-
aries along the supply chain, can affect the annu-
al budget of a farm by allowing the farmer’s fam-
ily to obtain a dignified remuneration for the use 
of their productive factors (rIzzO and MAzzAMu-
tO, 2009; POlIdOrI et al., 2008). With direct sales, 
the farmers are not subject to the price offered to 
them; they may decide to become price-makers 
(sAccOMAndI, 1999) and apply a different price, 
one that is higher than the one that is determined 
in the case of sales to fruit and vegetable whole-
sale markets or contracts with the large Organized 
distribution (lOd). this type of sale fully utilizes 
the work of the farmer’s family and produces pos-
itive effects on the farm’s economic performance 
because it increases the available liquid assets in 
the business and lowers the capital required for 
the coverage of the short-term debts that are pre-
sent during the management activity of the farm 
(dI trAPAnI et al., 2013). this is a worthy outcome, 
especially in rural territories where agriculture is 
the main economic activity and where the pricing 
of farm production represents the strategic vari-
able for the success needed to relaunch farm com-
petitiveness and boost the local economy, thereby 
avoiding the phenomena of rural exodus (tudIs-
cA et al., 2014a; rIzzO and GIudIce, 2013; tu-
dIscA et al., 2011; bulIn, 2011; brunOrI et al., 
2002). All of this is fostered by a general increase 
in the public interest in issues such as ecology 
and the health and welfare of animals, as well as 
a growing distrust in the quality of food products 
derived from conventional agriculture (tudIscA 
et al., 2014b; chInnIcI et al., 2013b; brunOrI et 
al., 2012; brIAMOnte and GIucA, 2010; hArVey 
et al., 2004). direct sales allow consumers to ob-
tain more reasonably priced fresh, healthy food 
and foster ecological sustainability, as represent-
ed by the reduced food miles and carbon emis-
sions flowing from sustainable farming (lIttle et 
al., 2009; FeAGAn, 2008). the decreased amount 

of food miles can result in a lower level of environ-
mental pressure due to a reduction in key factors 
such as air pollution, soil pollution, loss of biodi-
versity and noise pollution and can also reduce 
social pressures that can contribute to problems 
arising from road accidents and animal welfare is-
sues (VAn PAssel, 2013). Finally, direct sales can 
reconfigure relations between producers and con-
sumers, assuming a social justice characteristic 
(FeAGAn, 2007), and can encourage more harmo-
nious community relations (WInter, 2003) and 
more democratic participation of participants in 
the food supply chain (hInrIchs, 2003).

the aim of this paper, as well as in other stud-
ies (Peter et al., 2010; hOllOWAy, 2008; sOn-
nInO and MArsden, 2006), has been to analyze 
the role of direct sales in sicilian farms and to 
determine how the short food supply chain is 
able to valorize the endogenous resources of ru-
ral areas and, consequently, the economic profit-
ability of farmers, who seek to enhance their val-
ue along the food supply chain. In particular, it 
has been carried out an empirical analysis on a 
sample of farms that adopted the direct sales in 
order to analyze their structural characteristics, 
the motivations that led farmers to undertake 
this selling strategy and its benefits for farms. 

2. MAterIAls And MethOds

In order to analyse how direct sales can con-
tribute to obtaining a competitive advantage for 
sicilian farms, we carried out an empirical anal-
ysis on 30 small and medium enterprises (sMes) 
that adopted this entrepreneurial strategy. the 
survey was conducted in 2013 by means of face-
to-face interviews with farmers, using a specific 
questionnaire (tudIscA et al., 2014c; rAFFAellI 
et al., 2009; MArbAch, 2000) divided into three 
parts. In particular, in the first section we col-
lected the information related to the structural 
characteristics of farms, their agri food products 
(product portfolios), the socio-demographic char-
acteristics of farmers, the quota of farm produc-
tion destined to direct sales and its sales modal-
ity (farm outlets and/or farmers’ markets). In the 
second one we asked to farmers the reasons that 
led them to adopt a short supply chain strategy 
and the benefits reflected in the business perfor-
mance by its adoption. In this case interviewees 
had to assign a score to a 1-5 scale to each pos-
sible predefined question (tudIscA et al., 2013c; 
trAbAlzI and de rOsA, 2012). this scale, better 
know as likert scale (lIKert, 1932), is a psycho-
metric scale commonly involved in research that 
employs questionnaires. It is the most widely used 
approach to scaling responses in survey research. 
When responding to a likert questionnaire item, 
respondents specify their level of agreement or 
disagreement (strongly agree, agree, uncertain, 
disagree, strongly disagree) on a symmetric agree-
disagree scale for a series of statements by attrib-



Ital. J. Food Sci., vol. 27 - 2015 3

uting a score for each one (5, 4, 3, 2, 1). thus, the 
range captures the intensity of their feelings for 
a given item (nOrMAn, 2010; burns and burns, 
2008; Allen and seAMAn, 2007).

In the third section, we collected information 
in order to determine the net income of farmers, 
by means of the following formula:

 NI = GPV – ΣCi (1)
where:

NI = net income of farmer;
GPV = gross production value of agri food 

products;
C

i
 = costs of productive factors that have not 

been conferred by entrepreneur.
Finally, in order to better quantify how direct 

sales allowed farmers to remain competitive in 
the market, it has been compared this value to 
the net income that farmer would obtain by con-
ferring all farm production exclusively on tradi-
tional sales channels.

the empirical survey responses showed that 
the surveyed farms had an average area of 8.39 
ha and ranged from a minimum of 4.50 ha to a 
maximum of 13.56 ha (table 1). 

the majority of enterprises produced fruit and 
vegetables (8), followed by milk, cheese and dairy 
products (6), olive oil and fruit (5), vegetables (4), 
grapes, wine and fruit (4), grapes and wine (2) 
and olive oil (1). All of the surveyed farms were 
worked directly by the farmer’s family. the ma-
jority of our sample (18 farmers) had used di-
rect sales for more than five years, while the re-
maining farmers had applied this entrepreneur-
ial strategy in the past three years. Males ac-
counted for 63.3% cent of the entrepreneurs and 
36.7% were females. the majority of the entre-
preneurs (60.0%) were aged between 31 and 40 
years; only 13.3% were over 60 years. these re-
sponses highlighted how direct sales strategies 
have been used mainly by young entrepreneurs, 
unlike the sicilian primary sector, where farm-
ers are generally of an advanced age (MAssOlI 

table 1 - surveyed farms and socio-demographic characteristics of farmers.



4 Ital. J. Food Sci., vol. 27 - 2015

and de GAetAnO, 2004). young farmers are able 
to respond significantly better to new opportu-
nities and market changes than older entrepre-
neurs (Parker, 2006) and are able to change their 
entrepreneurial strategies and skills in order to 
remain competitive in an increasingly competi-
tive market (PrAshAnthAM and yOunG, 2013). 
Our surveyed entrepreneurs had a medium-high 
level of school education. In particular, 46.6% 
of farmers had higher school qualifications and 
33.4% had a degree, indicating that the adoption 
of a new entrepreneurial strategy is correlated 
positively with the level of education (nAjjAr et 
al., 2013; MAncInI et al., 2008). 

3. results And dIscussIOn

the results showed that direct sales of agri-
food products were in all cases a portion of the 
agricultural production (ranging from 18 to 35%) 
of the farms we surveyed; the remaining produc-
tion was marketed through traditional channels 
(fruit and vegetable wholesale markets, ldO, 
packing centres). the direct sale was conduct-
ed by the entrepreneur or his family (especial-
ly women and young people) and was crucial to 
achieving increases in the remuneration of the 
enterprise (henKe and sAlVIOnI, 2010). 

Our empirical survey showed that the majority 
of farmers (20) sold their products only in farm 
outlets. this was because it is relatively easy for 
a farmer to sell his products directly at the place 
of production; it requires only a simple organiza-
tion and helps to improve the farm’s image (ue-
MAtsu and MIshrA, 2011). eight of these farm-
ers also conducted guided tours of their farms, 
with positive outcomes for the visitors such as 
nutrition education, the diffusion of rural cul-
ture and the valorization of territory and local 
products (MettePennInGen et al., 2012). the 
influx of customers was distributed throughout 
the year, thanks to the sicilian favourable cli-
matic conditions (GrIllOne et al., 2014; d’AsA-
rO and GrIllOne, 2012; AGnese et al., 2008).  

six of the farmers sold their products exclu-
sively in farmers’ markets and four adopted both 
sales channels. Participation in farmers’ mar-

kets allowed the entrepreneurs to also sell their 
agrifood products in urban and periurban are-
as, thereby promoting their farm and increas-
ing customers and annual revenues (PsArIKIdOu 
and szerszynsKI, 2012; brunOrI et al., 2009; 
brOWn and MIller, 2008).

entrepreneurs adopted direct sales mainly be-
cause of the low sale prices of agrifood products, 
by assigning them the highest score (140) (Fig. 1). 

this was essentially attributable to the ab-
sence of intermediaries, so that despite the low-
er gross sales prices for agrifood products com-
pared with conventional markets, the farmers 
were able to obtain a higher net level of remu-
neration for their productive factors, by obtain-
ing a competitive advantage (hOllOWAy et al., 
2006; rentInG et al., 2003). they were essen-
tially appropriating a portion of the value that 
is usually dispersed in the various stages of the 
long supply chain (bAndArrA, 2011). the sec-
ond motivation, in order of importance, was cus-
tomer loyalty with a score equal to 126. this is 
due to the fact that, compared to the traditional 
supply chain, direct sales can create a relation-
ship between the consumer and producer that 
allows the farmer to valorise his production and 
to transmit his knowledge and links with the ter-
ritory (GuArInO and dOneddu, 2011; renKO et 
al., 2010). consumers have the opportunity to 
purchase agrifood products at lower prices com-
pared to traditional sales channels (seyFAnG, 
2008; tAylOr et al., 2005; KnIcKel and rent-
InG, 2000) and the growth of face-to-face trans-
actions has stimulated the development of mar-
kets in the region, which are considered for their 
status as oppositional sites to the mainstream 
food industry (sAGe, 2003). the third motivation, 
in order of importance, was environmental sus-
tainability (112). this denotes a new multifunc-
tional vision of farming that meets the eu guide-
lines and the new consumer’s needs, respecting 
and recovering territorial, environmental and 
ecological values (tudIscA et al., 2013b; rent-
InG et al., 2009; rentInG et al., 2008; thIlMAny 
et al., 2008). direct sales represent a sustain-
able alternative as the food miles (the distance 
between the place of production and consump-
tion) are minimized in passing ‘from farm to fork’ 

Marketing strategy diversifi-
cation 2
Farm geographical location 2
environmental sustainabil-
ity 3
customer’s loyalty 4
low sales prices 5

Fig. 1 - reasons that led en-
trepreneurs to adopt direct 
sales.



Ital. J. Food Sci., vol. 27 - 2015 5

and the area of distribution is limited. this re-
sults in a significant reduction of the negative 
externalities associated with transport over long 
distances, such as cO

2
 emissions, traffic, road 

accidents and noise pollution (lAnFrAnchI and 
GIAnnettO, 2013). In contrast to the results of 
other studies (hArrIs, 2010), farmers assigned 
to the geographical location of the farm and the 
diversification of the business marketing strat-
egy the lowest score (80).

Our empirical analysis showed that the farm-
ers felt that the increase in farm profitability was 
the main benefit to their business performance 
through the adoption of direct sales. In common 
with other authors (trAVersAc et al., 2011), they 
assigned it the highest importance by attribut-
ing a score equal to 145 (Fig. 2).

Another benefit considered to be of funda-
mental importance was the increase in liquid 
assets (134), because timely availability of cap-
ital can lead to the adoption of modern technol-
ogies, which increase farm production and ul-
timately the growth rate (rIAz et al., 2012). the 
third highest-ranking benefit from adopting di-
rect sales was the increase in investments (98). 
this was correlated to the increase in farm prof-
itability that allowed for an increase in self-fi-
nancing and thereby enabled farmers to realize 
investments (crnčAn et al., 2011). Finally, the 
farmers also identified direct sales as an oppor-
tunity for human resources optimization, by at-
tributing it a score equal to 77. however, this 
presupposes that in the farm family there is a 
state of under-employment, because the possi-
ble economic advantage created would other-
wise be absorbed by the need to employ exter-
nal sales staff (tudIscA et al., 2014d).

Our results showed that farmers who adopt-
ed direct sales were able to update their skills 
and modify the market orientation of their en-
terprises in order to compete effectively in the 
current competitive system (FrAnK et al., 2012). 
this highlights the importance of human capital 
in an enterprise (GurǍu et al., 2010).

economic importance of direct sales adoption 
is showed by table 2. results denoted that in 
surveyed farms the net income deriving from the 
adoption of direct sales ranged from a minimum 

human resources optimisa-
tion 2
Increase of investments 3
Increase of liquid assets 4
Increase of farm profitability 5

table 2 - net incomes in surveyed farms

Fig. 2 - Obtained benefits on 
the business performance by 
adopting direct sales.



6 Ital. J. Food Sci., vol. 27 - 2015

of 3,052.00 to a maximum of 14,630.00 euro.
In all farms, as well as in other studies (hArd-

esty and leFF, 2010), it has been highlighted 
an increase of net income ranged from 5.5 to 
60.9% respect to the one deriving from the sell-
ing of farm production exclusively through tra-
ditional channels. the higher increases were in 
farms that sold their products both in farm out-
lets and farmers’ markets as they were able to 
reach a greater number of consumers.

4. cOnclusIOns

Our results showed that sMes employing a di-
rect sales strategy are part of an entrepreneuri-
al network characterized by entrepreneurs who 
have been able to reorient their business strate-
gy in order to remain competitive in the market. 
the most important reason that has driven en-
trepreneurs to adopt direct sales was the need to 
overcome the consistently low sales prices of ag-
rifood products and thereby obtain higher prof-
it margins and create a competitive advantage. 
the increase in farm profitability resulted in high-
er liquid assets and an increase in farm invest-
ments and enabled the human resources in the 
farmer’s family to be optimized. this highlights 
the fact that the use of direct sales in agriculture 
nowadays can have a positive impact on the many 
components of the territorial system in which it 
operates. nevertheless, direct sales cannot be the 
only marketing strategy for a farm because the 
produced quantities cannot be absorbed exclu-
sively by local demand. however, direct sales can 
represent a winning strategy for a farm if it is in-
serted within a wider business marketing strat-
egy or if this strategy is used in conjunction with 
traditional sales methods, such as fruit and vege-
table wholesale markets and contracts with lOd.

AcKnOWledGeMents

this paper is a result of the full collaboration of all the au-
thors. however, s. tudisca wrote Conclusions, A.M. di 
trapani wrote Materials and methods, F. sgroi wrote In-
troduction, and r. testa wrote Results and Discussion.

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Paper Received January 15, 2014 Accepted April 8, 2014