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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
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
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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.
- Jondrow, James & Knox Lovell, C. A. & Materov, Ivan S. & Schmidt, Peter, 1982. "On the estimation of technical inefficiency in the stochastic frontier production function model," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 233-238, August.
- Afriat, Sidney N, 1972. "Efficiency Estimation of Production Function," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 13(3), pages 568-98, October.
- 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.
- Greene, William H., 1980. "On the estimation of a flexible frontier production model," Journal of Econometrics, Elsevier, vol. 13(1), pages 101-115, May.
- Tzouvelekas, Vangelis & Pantzios, Christos J. & Fotopoulos, Christos, 2002. "Empirical Evidence of Technical Efficiency Levels in Greek Organic and Conventional Farms," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 3(2), August.
- Pitt, Mark M. & Lee, Lung-Fei, 1981. "The measurement and sources of technical inefficiency in the Indonesian weaving industry," Journal of Development Economics, Elsevier, vol. 9(1), pages 43-64, August.
- 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.
- Tzouvelekas, Vangelis & Pantzios, Christos J. & Fotopoulos, Christos, 2001. "Technical efficiency of alternative farming systems: the case of Greek organic and conventional olive-growing farms," Food Policy, Elsevier, vol. 26(6), pages 549-569, December.
- Lohr, Luanne & Salomonsson, Lennart, 2000.
"Conversion subsidies for organic production: results from Sweden and lessons for the United States,"
Blackwell, vol. 22(2), pages 133-146, March.
- Lohr, Luanne & Salomonsson, Lennart, 1998. "Conversion Subsidies For Organic Production: Results From Sweden And Lessons For The United States," Faculty Series 16640, University of Georgia, Department of Agricultural and Applied Economics.
- Kumbhakar, Subal C & Ghosh, Soumendra & McGuckin, J Thomas, 1991. "A Generalized Production Frontier Approach for Estimating Determinants of Inefficiency in U.S. Dairy Farms," Journal of Business & Economic Statistics, American Statistical Association, vol. 9(3), pages 279-86, July.
- Atkinson, Scott E & Cornwell, Christopher, 1994. "Estimation of Output and Input Technical Efficiency Using a Flexible Form and Panel Data," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 35(1), pages 245-55, February.
- Lovell, C. A. Knox, 1995. "Econometric efficiency analysis: A policy-oriented review," European Journal of Operational Research, Elsevier, vol. 80(3), pages 452-461, February.
- Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-32.
- repec:jaa:jagape:v:33:y:2001:i:1:p:35-48 is not listed on IDEAS
- Richmond, J, 1974. "Estimating the Efficiency of Production," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 15(2), pages 515-21, June.
- 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.
- Bauer, Paul W., 1990. "Recent developments in the econometric estimation of frontiers," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 39-56.
- Tzouvelekas, Vangelis & Pantzios, Christos J. & Fotopoulos, Christos, 2001. "Economic Efficiency In Organic Farming: Evidence From Cotton Farms In Viotia, Greece," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 33(01), April.
- Kodde, David A & Palm, Franz C, 1986. "Wald Criteria for Jointly Testing Equality and Inequality Restriction s," Econometrica, Econometric Society, vol. 54(5), pages 1243-48, September.
- Alfons Oude Lansink & Ky–sti Pietola, 2002. "Effciency and productivity of conventional and organic farms in Finland 1994--1997," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 29(1), pages 51-66, March.
- Reifschneider, David & Stevenson, Rodney, 1991. "Systematic Departures from the Frontier: A Framework for the Analysis of Firm Inefficiency," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(3), pages 715-23, August.
- Arandia, Amaia & Aldanondo-Ochoa, A., 2008. "Social Versus Private Efficiency: A Comparison of Conventional and Organic Farming Systems in Vineyard Production," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44416, European Association of Agricultural Economists.
- Sauer, Johannes & Park, Timothy A. & Graversen, Jesper T., 2007. "Organic Farming In Denmark-Productivity, Technical Change And Market Exit," 47th Annual Conference, Weihenstephan, Germany, September 26-28, 2007 7618, German Association of Agricultural Economists (GEWISOLA).
- Gauri Khanna, 2006. "Technical Efficiency in Production and Resource Use in Sugar Cane: A Stochastic Frontier Production Function Analysis," IHEID Working Papers 15-2006, Economics Section, The Graduate Institute of International Studies.
- Charyulu Kumara D. & Biswas, Subho, . "Economics and Efficiency of Organic Farming vis-à-vis Conventional Farming in India," IIMA Working Papers WP2010-04-03, Indian Institute of Management Ahmedabad, Research and Publication Department.
- Sauer, Johannes & Graversen, Jesper T. & Park, Timothy A., 2006. "Breathtaking or Stagnating? - Productivity, Technical Change and Structural Dynamics in Danish Organic Farming," 2006 Annual meeting, July 23-26, Long Beach, CA 21481, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If references are entirely missing, you can add them using this form.