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Technical Efficiency in Organic and Conventional Farming: Evidence from Italian Cereal Farms

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  • Madau, Fabio A.

Abstract

A stochastic frontier production model was applied to estimate technical efficiency in a sample of Italian organic and conventional cereal farms. The main purpose was to assess which production technique revealed higher efficiency. Statistical tests on the common production function model suggested that the two cultivation methods might lie on different frontiers. Separate analyses of two sub-samples (93 and 138 observations for organic and conventional farms, respectively) found that conventional farms were significantly more efficient than organic farms, with respect to their specific technology (0.902 vs. 0.831). Analysis also estimated that efficiency plays a crucial role into the factors affecting productivity in the organic process. Some policy implications can be drawn from these findings.

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File URL: http://purl.umn.edu/42141
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Bibliographic Info

Article provided by Greek Association of Agricultural Economists in its journal Agricultural Economics Review.

Volume (Year): 08 (2007)
Issue (Month): 1 (January)
Pages:

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Handle: RePEc:ags:aergaa:42141

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Related research

Keywords: Organic farming; Comparison analysis; Cereal-growing; Technical efficiency; Stochastic frontier production models; Italy;

References

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  1. Lohr, Luanne & Salomonsson, Lennart, 2000. "Conversion subsidies for organic production: results from Sweden and lessons for the United States," Agricultural Economics: The Journal of the International Association of Agricultural Economists, International Association of Agricultural Economists, vol. 22(2), March.
  2. Forsund, Finn R. & Lovell, C. A. Knox & Schmidt, Peter, 1980. "A survey of frontier production functions and of their relationship to efficiency measurement," Journal of Econometrics, Elsevier, vol. 13(1), pages 5-25, May.
  3. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
  4. A. Parikh & K. Shah, 1994. "Measurement Of Technical Efficiency In The North-West Frontier Province Of Pakistan," Journal of Agricultural Economics, Wiley Blackwell, vol. 45(1), pages 132-138.
  5. Lohr, Luanne & Salomonsson, Lennart, 2000. "Conversion subsidies for organic production: results from Sweden and lessons for the United States," Agricultural Economics, Blackwell, vol. 22(2), pages 133-146, March.
  6. Kerselaers, Eva & Govaerts, Wim & Lauwers, Ludwig H. & De Cock, Lieve & Van Huylenbroeck, Guido, 2005. "Modelling Farm Level Economic Potential for Conversion to Organic Farming," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24732, European Association of Agricultural Economists.
  7. Greene, William H., 1980. "On the estimation of a flexible frontier production model," Journal of Econometrics, Elsevier, vol. 13(1), pages 101-115, May.
  8. Tim Coelli & Sanzidur Rahman & Colin Thirtle, 2002. "Technical, Allocative, Cost and Scale Efficiencies in Bangladesh Rice Cultivation: A Non-parametric Approach," Journal of Agricultural Economics, Wiley Blackwell, vol. 53(3), pages 607-626.
  9. Fare, Rolf & Knox Lovell, C. A., 1978. "Measuring the technical efficiency of production," Journal of Economic Theory, Elsevier, vol. 19(1), pages 150-162, October.
  10. Bauer, Paul W., 1990. "Recent developments in the econometric estimation of frontiers," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 39-56.
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Citations

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Cited by:
  1. Madau, Fabio A., 2010. "Parametric Estimation Of Technical And Scale Efficiencies In Italian Citrus Farming," MPRA Paper 26818, University Library of Munich, Germany.
  2. Trnkova, Gabriela & Mala, Zdenka & Vasilenko, Alexandr, 2012. "Analysis of the Effects of Subsidies on the Economic Behavior of Agricultural Businesses Focusing on Animal Production," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 4(4), December.
  3. Breustedt, Gunnar & Latacz-Lohmann, Uwe & Tiedemann, Torben, 2011. "Organic or conventional? Optimal dairy farming technology under the EU milk quota system and organic subsidies," Food Policy, Elsevier, vol. 36(2), pages 223-229, April.
  4. Sofia KOURTESI & Panos FOUSEKIS & Apostolos POLYMEROS, 2012. "Conditional Efficiency Estimation With Environmental Variables: Evidence From Greek Cereal Farms," Scientific Bulletin - Economic Sciences, University of Pitesti, vol. 11(1), pages 43-52.
  5. Zdeňka Kroupová & Michal Malý, 2010. "Analysis of Agriculture Subsidy Policy Tools - Aplication of Production Function," Politická ekonomie, University of Economics, Prague, vol. 2010(6), pages 774-794.

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