Technical Efficiency in Organic Farming: An Application on Italian Cereal Farms Using a Parametric Approach
AbstractA 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 pool sample model suggested that differences between the two cultivation methods were significant from a technological viewpoint. 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 (0.892 vs. 0.825). This implies that organic (conventional) cereal farmers could increase their income to 99.19 /ha (40.95 /ha). Analysis also estimated that land was the technical input with the highest elasticity for both technologies. Furthermore, findings indicated that 63.7% of the differentials between observed and best-practice output was explained by technical inefficiency for the conventional group, while this value was close to unity for organic farms. Some policy implications can be drawn from these findings.
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Bibliographic InfoPaper provided by European Association of Agricultural Economists in its series 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark with number 24545.
Date of creation: 2005
Date of revision:
organic farming; comparison analysis; cereal-growing; technical efficiency; stochastic frontier production models; Crop Production/Industries; C61; Q18;
Find related papers by JEL classification:
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
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