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Differential uncertainties and risk attitudes between conventional and organic producers: the case of Spanish arable crop farmers

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  • Teresa Serra
  • David Zilberman
  • José M. Gil

Abstract

The growing importance of economic factors in farmers' decisions to go organic has raised interest in characterizing the economic behavior of organic versus conventional farms. In general, published analyses so far have not considered differential uncertainties, abilities to control production risk, and farmers' risk preferences between conventional and organic practices when comparing these techniques. Our article attempts to assess this issue. We use a model of farmer decision under risk to analyze the differential values between organic and conventional Spanish arable crop farms and to assess the incentives for adoption of organic practices. Results show that organic and conventional farms do have different production risks as well as different aversions to risk. Organic price premiums and subsidies are found to be powerful instruments to motivate adoption of organic techniques. Copyright (c)2008 International Association of Agricultural Economists.

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Bibliographic Info

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

Volume (Year): 39 (2008)
Issue (Month): 2 (09)
Pages: 219-229

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Handle: RePEc:bla:agecon:v:39:y:2008:i:2:p:219-229

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Cited by:
  1. Latruffe, Laure & Nauges, Céline, 2010. "Technical efficiency and conversion to organic farming: the case of France," LERNA Working Papers 10.23.329, LERNA, University of Toulouse.
  2. Teresa Serra & Barry Goodwin, 2009. "The efficiency of Spanish arable crop organic farms, a local maximum likelihood approach," Journal of Productivity Analysis, Springer, vol. 31(2), pages 113-124, April.
  3. Bocquého, G. & Jacquet, F., 2010. "The adoption of switchgrass and miscanthus by farmers: Impact of liquidity constraints and risk preferences," Energy Policy, Elsevier, vol. 38(5), pages 2598-2607, May.
  4. Pascucci, Stefano & Capitanio, Fabian & Del Giudice, Teresa, 2010. "Value Creation Strategies in Credence Food Productions: The Case of Organic Farming in Italy," 2010 Internatonal European Forum, February 8-12, 2010, Innsbruck-Igls, Austria 100474, International European Forum on Innovation and System Dynamics in Food Networks.
  5. Moro, Daniele & Sckokai, Paolo, 2013. "The impact of decoupled payments on farm choices: Conceptual and methodological challenges," Food Policy, Elsevier, vol. 41(C), pages 28-38.
  6. Latruffe, Laure & Nauges, Celine, 2010. "Converting to organic farming in France: Is there a selection problem?," 120th Seminar, September 2-4, 2010, Chania, Crete 109386, European Association of Agricultural Economists.
  7. Dörschner, Till & Musshoff, Oliver, 2013. "Does the risk attitude influence the farmers' willingness to participate in agri-environmental measures? – A normative approach to evaluate ecosystem services," 53rd Annual Conference, Berlin, Germany, September 25-27, 2013 156112, German Association of Agricultural Economists (GEWISOLA).
  8. Musshoff, Oliver & Hirschauer, Norbert, 2012. "Planspiele als experimentelle Methode der Politikfolgenabschätzung: Das Beispiel der Stickstoffextensivierung," 52nd Annual Conference, Stuttgart, Germany, September 26-28, 2012 137164, German Association of Agricultural Economists (GEWISOLA).

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