This paper summarizes the main effects of extreme weather events on agricultural production and demonstrates their economic consequences. For cost-benefit analysis of economic impacts and for determination of risk levels simulation models are needed that contains the relationship between product line levels and elements. WIN-SIM model is develo
...ped for this goal, specialized for wine production. The model is suitable to analyze the market share, the cost and income relations as well as the relation structure of the product lines. The four levels of the model (site, vine growing, wine production and wine market levels) have individual values added from the aspect of end product, where the product line sets out from the site level and gets through the levels up to the consumer segments. Theoretically, all elements can be connected to any element of the next level and sublevel, but there are “prohibited contacts” because of professional, regulation or production practice reasons.
Investments in the vine growing-wine making sector can be characterised by a high level of' risk, and an important role of time, because there is a considerable time gap between the decision on investment and its consequences, whereas the ecological and economical factors should be considered as stochastic variables. Based on a real—life, typ
...ical vine—plantation project, the article analyses the profitability of vine growing-wine making sector as a function of different ecological and economical conditions depending on the added value content of products. Results of the investigations highlight: (1) the importance of subsidy for establishment of vine plantations: (2) the considerable influence of yields on rate of return of investment; (3) the role of increasing of added value content of products. Importance of the utilisation of alternative channels of distribution and the formation of producers' cooperatives are underlined, being based on calculation of return of investment.