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Analysing Production Technology and Risk in Organic and Conventional Dutch Arable Farming using Panel Data

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  • Cornelis Gardebroek
  • María Daniela Chavez
  • Alfons Oude Lansink
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    Abstract

    This paper compares the production technology and production risk of organic and conventional arable farms in the Netherlands. Just-Pope production functions that explicitly account for output variability are estimated using panel data of Dutch organic and conventional farms. Prior investigation of the data indicates that within variation of output is significantly higher for organic farms, indicating that organic farms face more output variation than conventional farms. The estimation results indicate that in both types of farms, unobserved farm-specific factors like management skills and soil quality are important in explaining output variability and production risk. The results further indicate that land has the highest elasticity of production for both farm types. Labour and other variable inputs have significant production elasticities in the case of conventional farms and other variable inputs in the case of organic farms. Manure and fertilisers are risk-increasing inputs on organic farms and risk-reducing inputs on conventional farms. Other variable inputs and labour are risk increasing on both farm types; capital and land are risk-reducing inputs. Copyright (c) 2009 The Authors. Journal compilation (c) 2009 The Agricultural Economics Society.

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    Bibliographic Info

    Article provided by Wiley Blackwell in its journal Journal of Agricultural Economics.

    Volume (Year): 61 (2010)
    Issue (Month): 1 ()
    Pages: 60-75

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    Handle: RePEc:bla:jageco:v:61:y:2010:i:1:p:60-75

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    Web page: http://www.blackwellpublishing.com/journal.asp?ref=0021-857X

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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. 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).
    3. El Benni, Nadja & Finger, Robert, 2012. "Where is the risk? Price, yield and cost risk in Swiss crop production," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126758, International Association of Agricultural Economists.
    4. Tomasz Gerard Czekaj & Arne Henningsen, 2013. "Panel Data Nonparametric Estimation of Production Risk and Risk Preferences: An Application to Polish Dairy Farms," IFRO Working Paper 2013/6, University of Copenhagen, Department of Food and Resource Economics.
    5. 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.
    6. Cagdas, Ali D. & Jeffrey, Scott R. & Smith, Elwin G. & Boxall, Peter C., 2013. "Adoption of BMPs and technical inefficiency in Canadian canola production," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150200, Agricultural and Applied Economics Association.
    7. El Benni, Nadja & Finger, Robert & Mann, Stefan, 2012. "The effect of agricultural policy change on income risk in Swiss agriculture," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122532, European Association of Agricultural Economists.

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