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Differential Uncertainties and Risk Attitudes between Conventional and Organic Producers: The Case of Spanish COP Farmers

Author

Listed:
  • Serra, Teresa
  • Zilberman, David
  • Gil, Jose Maria

Abstract

The growing importance of economic factors in farmers' decision to go organic has raised interest in characterizing the economic behavior of organic versus conventional farms. Published analyses so far have not considered differential uncertainties 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 Spanish COP organic and conventional farms and to assess the incentives for adoption of organic practices. Results show that organic and conventional farms do have different abilities to control production risk as well as different risk preferences. Organic price premiums and subsidies are found to be powerful instruments to motivate adoption of organic techniques.

Suggested Citation

  • Serra, Teresa & Zilberman, David & Gil, Jose Maria, 2007. "Differential Uncertainties and Risk Attitudes between Conventional and Organic Producers: The Case of Spanish COP Farmers," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon 9696, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea07:9696
    DOI: 10.22004/ag.econ.9696
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    Cited by:

    1. Ferto, Imre & Forgacs, Csaba, 2009. "Is organic farming a chance for family farms to survive?," 111th Seminar, June 26-27, 2009, Canterbury, UK 52862, European Association of Agricultural Economists.
    2. Doris Läpple, 2010. "Adoption and Abandonment of Organic Farming: An Empirical Investigation of the Irish Drystock Sector," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(3), pages 697-714, September.
    3. Loughrey, J. & Thorne, F. & Kinsella, A. & Hennessy, T. & O'Donoghue, C. & Vollenweider, X., 2015. "Market risk management and the demand for forward contracts among Irish dairy farmers," International Journal of Agricultural Management, Institute of Agricultural Management, vol. 4(4), July.
    4. Lapple, Doris & Donnellan, Trevor, 2009. "Adoption and Abandonment of Organic Farming: An Empirical Investigation of the Irish Drystock Sector," 83rd Annual Conference, March 30 - April 1, 2009, Dublin, Ireland 51062, Agricultural Economics Society.

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