*2.2. Costs*

Table 3 shows the inputs used and operational costs considered including fuel consumption. Inputs costs include pepper seedlings, pre-transplanting manure, herbicides, chemical dressing, irrigation water, and mulching materials used in trials. Pre-transplanting manure, chemical dressing, and some field preparation labors were taken from the experimental trial and the rest of the time costs considered for each operation were obtained from an interview with a local pepper producer. Labor costs are calculated using official data available in [27]. Amounts and type of fertilizers and doses of active matters used in chemical dressing can be consulted in [28].

Prices of mulching materials were obtained directly from the manufacturers thus they are final market prices. The costs of mechanical installation of paper mulches were calculated using data published by [1] for the case of tomato crop, adding an extra cost derived from the considered speed in the specific case of paper mulches, which need to be installed slower because they are not flexible and break easily. Additionally, a PE roll usually contains 2400 linear meters while a paper roll contains approximately 250 linear meters. Therefore, the number of times that workers have to stop to change roller in order to mulch a field of the same surface has also been considered. Similarly, the time needed to bury the endpoint of the mulch in each line in order to fix the material to the soil is considered.

Irrigation costs include an annual quota (proportional to the amount of hectares), energy costs, and drip line purchase cost. Operational costs include labor and machinery costs for soil preparation, crop and mulching installation and removal, application of fertilizers and herbicides, harvesting, and final field conditioning.

The cost of transplanting operation varies depending on the hired company and its availability at the time of the operation. Hence, an average costs from two different local companies was used. Chemical dressing was applied by fertirrigation and fractioned 6 times and labor cost was included. Herbicide application between line crops and manual weeding in the transplanting holes are common tasks and the costs are quite variable among years so an average rate provided by the farmer was used. Harvesting is one of the most expensive operations in the case of pepper for fresh consumption because the fruits are manually collected between three to four times at the end of the cropping season.


**Table 3.** Costs (€ ha−1) of inputs and operations in open-air pepper production.

a For 0.7 m bed width and 1.5 separation between lines; b For a plastic consumption of 160 kg ha−1; Management of plastic, transport time, landfill and recycling costs included.

Field conditioning involves manual removal of the irrigation system, crop rests removal (which is a combined mechanical and manual operation) and plastic elimination in the case of non-biodegradable films which is a mechanical operation with a rotatory machine coupled to the tractor. The cost of landfill must be considered because under the current Spanish Law, farmers are responsible of ensuring proper treatment of wastes produced in their fields. However, as they are not required to assume the cost of recycling farmers usually store their waste and transport it to an authorized recovery point. Although recycling is not mandatory for farmers in Spain, we consider a scenario of plastic recycling in order to evaluate its effect on the final profitability. As a consequence, three different scenarios are considered: (i) the most widespread situation where farmers do not conduct any waste treatment, just remove the plastic residues from the field and leave them stored, buried or burned; (ii) the landfill scenario, where farmers transport plastic residues to the recovery point, and (iii) the recycling situation, when the farmers transport the residues to the recycling plant and assume the recycling cost. The consideration of the no waste treatment as a baseline scenario will allow us to assess how profitability is affected by waste treatment, which is a contribution of this paper.

The costs of manipulation and transport (including fuel) of the plastic waste from field to the recovery point (or the recycling plant) are included in scenarios (ii) and (iii) as an externalized task. This cost includes plastic removal from the field with a specific rotatory machine and the transport of the residues to the final destination with a tractor provided with a tow. A distance of 30 km from the field to the recovery point has been considered for the calculations. For the recycling scenario, the cost was obtained from a local recycling plant which amounts 62 € t−1. Usually, film mulches have impurities such as soil, debris, pesticides, or fertilizers, which can represent up to 85% of the total remnants by weight and recycling plants usually do not accept plastic films with more than 5% impurities [29]. However, the local plant considered does not establish a limit for impurities.

Finally, cultivator tillage cost for soil preparation for the next season is included as field conditioning. Costs of using machinery shown in Table 1 includes the cost of fuel which is proportionally distributed in proportion to the time cost of each operation.

#### *2.3. Incomes and Net Margins*

The calculation of incomes includes the market value for the crop outputs. The "Lamuyo" pepper market price considered is 876 € <sup>t</sup>−1, which is an average from the last three years from available data [27]. We assume that this market price is not different between materials because we have not observed that different mulches modifies the harvest time in the case of pepper crop.

Although there were no statistical differences among materials [28], yields obtained in three to four years of the experiment were very low (about 10 t ha−1) in comparison to the average obtained in the region which amounts 29.8 t ha−<sup>1</sup> [30]. Pepper is a delicate crop concerning water and humidity variations and during 2012 and 2013, technical problems in irrigation caused pepper seedlings mortality that could not be replaced. In addition, 12 days of rainfall were reported in 2013 (7.5 days is the usual) (see Table 1). Although the amount of rainfall was not excessive, it caused a delay in the field works, which led to planting peppers to a very late date (15 June). This is a handicap to ge<sup>t</sup> good production in our area.

In 2015, temperature, insolation, and radiation parameters during May and June were much higher than normal, which caused the degradation of many biodegradable plastics and thinner papers and interfering dramatically with flowering. Subsequently these materials broke more easily by the action of the wind, which was also stronger than usual from May to October if we look at the days of wind with gusts greater than 10 m s<sup>−</sup>1.

Therefore, yield data used in this study is from year 2014 where pepper yields are considered normal compared to the average production in the area and no agronomic and climatic problems were observed.

Additionally, farmers can obtain subsidies from the Aragon Government (funded by the European Union) offering the possibility to receive 35% of the material costs when biodegradable mulching is used. In such case, farmers must also meet some demanding requirements, such as belonging to a horticultural producers' association developing operative and investment programs in improving the quality of their products including the development of protected designations of origin and geographical indications [31]. According to current legislation, paper mulches are not considered as biodegradable and therefore do not receive subsidies. Consequently, two different scenarios are considered in the economic analysis: (i) when no subsidies are received; (ii) when farmers are compensated for the cost of using biodegradable mulches. This comparison sheds light on practical insights to improve the knowledge of the effectiveness of such subsidies in promoting the use of biodegradable materials.

Finally, the economic profitability of each material is compared using the net margin, which is calculated as the difference between incomes (value of the crop output with or without regional subsidies) and total costs (inputs, operations, labor, etc.).
