IDEAS home Printed from https://ideas.repec.org/p/ags/eaae11/114628.html
   My bibliography  Save this paper

Crop biodiversity repercussions of subsidized organic farming in Greece

Author

Listed:
  • Nastis, Stefanos A.
  • Michailidis, Anastasios
  • Mattas, Konstadinos

Abstract

This paper analyzes the impact of CAP financial assistance on crop biodiversity under uncertainty. A stochastic production function is employed and estimated to assess whether risk-averse farmers hedge risk by diversifying their portfolio of crops, thus increasing crop biodiversity. The model is applied to farm-level data of organic crop farms in Greece. Organic farming financial assistance poses a double-edged sword: even though it is considered agrobiodiversity enhancing as a cultivation method, subsidizing it can become agrobiodiversity reducing, since farmers may select to cultivate only the subsidized crops. The study shows that risk aversion leads to crop biodiversity conservation. However, providing CAP financial assistance on certain crops appears to decrease the relationship between revenue risk management and crop biodiversity, indirectly resulting in crop biodiversity loss.

Suggested Citation

  • Nastis, Stefanos A. & Michailidis, Anastasios & Mattas, Konstadinos, 2011. "Crop biodiversity repercussions of subsidized organic farming in Greece," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114628, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae11:114628
    DOI: 10.22004/ag.econ.114628
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/114628/files/Nastis_Stefanos_95.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.114628?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Felix Schläpfer & Michael Tucker & Irmi Seidl, 2002. "Returns from Hay Cultivation in Fertilized Low Diversity and Non-Fertilized High Diversity Grassland," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 21(1), pages 89-100, January.
    2. Richard E. Just & Quinn Weninger, 1999. "Are Crop Yields Normally Distributed?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(2), pages 287-304.
    3. Edward Kato & Claudia Ringler & Mahmud Yesuf & Elizabeth Bryan, 2011. "Soil and water conservation technologies: a buffer against production risk in the face of climate change? Insights from the Nile basin in Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 42(5), pages 593-604, September.
    4. Just, Richard E., 2003. "Risk research in agricultural economics: opportunities and challenges for the next twenty-five years," Agricultural Systems, Elsevier, vol. 75(2-3), pages 123-159.
    5. Smale, Melinda & Bellon, Mauricio R & Aguirre Gomez, Jose Alfonso, 2001. "Maize Diversity, Variety Attributes, and Farmers' Choices in Southeastern Guanajuato, Mexico," Economic Development and Cultural Change, University of Chicago Press, vol. 50(1), pages 201-225, October.
    6. Fuss, Melvyn & McFadden, Daniel, 1978. "Production Economics: A Dual Approach to Theory and Applications (II): Applications of the Theory of Production," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, volume 2, number fuss1978a.
    7. Fuss, Melvyn & McFadden, Daniel (ed.), 1978. "Production Economics: A Dual Approach to Theory and Applications," Elsevier Monographs, Elsevier, edition 1, number 9780444850133.
    8. Kato, E., 2009. "Soil and water conservation technologies: a buffer against production risk in the face of climate change?: insights from the Nile Basin in Ethiopia," IWMI Working Papers H042477, International Water Management Institute.
    9. Ekin Birol & Melinda Smale & Ágnes Gyovai, 2006. "Using a Choice Experiment to Estimate Farmers’ Valuation of Agrobiodiversity on Hungarian Small Farms," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 34(4), pages 439-469, August.
    10. Salvatore Di Falco & Charles Perrings, 2003. "Crop Genetic Diversity, Productivity and Stability of Agroecosystems. A Theoretical and Empirical Investigation," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(2), pages 207-216, May.
    11. Just, Richard E. & Pope, Rulon D., 1978. "Stochastic specification of production functions and economic implications," Journal of Econometrics, Elsevier, vol. 7(1), pages 67-86, February.
    12. Richard E. Just & Rulon D. Pope, 1979. "Production Function Estimation and Related Risk Considerations," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 61(2), pages 276-284.
    13. McFadden, Daniel, 1978. "Estimation Techniques for the Elasticity of Substitution and Other Production Parameters," Histoy of Economic Thought Chapters, in: Fuss, Melvyn & McFadden, Daniel (ed.),Production Economics: A Dual Approach to Theory and Applications, volume 2, chapter 4, McMaster University Archive for the History of Economic Thought.
    14. Di Falco, Salvatore & Perrings, Charles, 2005. "Crop biodiversity, risk management and the implications of agricultural assistance," Ecological Economics, Elsevier, vol. 55(4), pages 459-466, December.
    15. Atanu Saha & C. Richard Shumway & Arthur Havenner, 1997. "The Economics and Econometrics of Damage Control," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 773-785.
    16. David Tilman & Kenneth G. Cassman & Pamela A. Matson & Rosamond Naylor & Stephen Polasky, 2002. "Agricultural sustainability and intensive production practices," Nature, Nature, vol. 418(6898), pages 671-677, August.
    17. Chambers,Robert G., 1988. "Applied Production Analysis," Cambridge Books, Cambridge University Press, number 9780521314275.
    18. Fuss, Melvyn & McFadden, Daniel, 1978. "Production Economics: A Dual Approach to Theory and Applications (I): The Theory of Production," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, volume 1, number fuss1978.
    19. Ian Hodge, 2000. "Agri‐environmental Pelationships and the Choice of Policy Mechanism," The World Economy, Wiley Blackwell, vol. 23(2), pages 257-273, February.
    20. Melinda Smale & Jason Hartell & Paul W. Heisey & Ben Senauer, 1998. "The Contribution of Genetic Resources and Diversity to Wheat Production in the Punjab of Pakistan," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(3), pages 482-493.
    21. Charles Perrings, 1998. "Resilience in the Dynamics of Economy-Environment Systems," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 11(3), pages 503-520, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Elisa Gatto & Alba Marino & Guido Signorino, 2013. "Biodiversity and risk management in agriculture: what do we learn from CAP reforms? A farm-level analysis," ERSA conference papers ersa13p805, European Regional Science Association.
    2. Christina Moulogianni & Thomas Bournaris, 2021. "Assessing the Impacts of Rural Development Plan Measures on the Sustainability of Agricultural Holdings Using a PMP Model," Land, MDPI, vol. 10(5), pages 1-13, April.
    3. Stefanos A. Nastis & Konstadinos Mattas & George Baourakis, 2019. "Understanding Farmers’ Behavior towards Sustainable Practices and Their Perceptions of Risk," Sustainability, MDPI, vol. 11(5), pages 1-13, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Di Falco, Salvatore & Perrings, Charles, 2005. "Crop biodiversity, risk management and the implications of agricultural assistance," Ecological Economics, Elsevier, vol. 55(4), pages 459-466, December.
    2. Pope, Rulon D. & Just, Richard E., 1996. "Empirical implementation of ex ante cost functions," Journal of Econometrics, Elsevier, vol. 72(1-2), pages 231-249.
    3. Zhao, Xueyan & Mullen, John D. & Griffith, Garry R. & Griffiths, William E. & Piggott, Roley R., 2000. "An Equilibrium Displacement Model of the Australian Beef Industry," Research Reports 28007, New South Wales Department of Primary Industries Research Economists.
    4. V. Vandenberghe, 2018. "The Contribution of Educated Workers to Firms’ Efficiency Gains: The Key Role of Proximity to the ‘Local’ Frontier," De Economist, Springer, vol. 166(3), pages 259-283, September.
    5. Renwick, Alan W. & Revoredo-Giha, Cesar & Reader, Mark A., 2005. "Uk Sugar Beet Farm Productivity Under Different Reform Scenarios: A Farm Level Analysis," Environmental Economy and Policy Research Discussion Papers 31936, University of Cambridge, Department of Land Economy.
    6. Bailey, Alastair & Irz, Xavier T. & Balcombe, Kelvin George, 2003. "An Appliation Of The Stochastic Latent Variable Approach To The Correction Of Sector Level Tfp Calculations In The Face Of Biased Technological Change," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25842, International Association of Agricultural Economists.
    7. Guenter Lang, 2002. "Innovative Slowdown, Productivity Reversal? - Estimating the Impact of R&D on Technological Change," Discussion Paper Series 218, Universitaet Augsburg, Institute for Economics.
    8. Huiban, Jean-Pierre & Mastromarco, Camille & Musolesi, Antonio & Simioni, Michel, 2016. "The impact of pollution abatement investments on production technology: new insights from frontier analysis," Working Papers MOISA 235162, Institut National de la recherché Agronomique (INRA), UMR MOISA : Marchés, Organisations, Institutions et Stratégies d'Acteurs : CIHEAM-IAMM, CIRAD, INRA, Montpellier SupAgro, Montpellier, France.
    9. Hess, Sebastian & Surry, Yves R., 2011. "The CDET Profit Function: Could it generate a Parsimonious Agricultural Sector Model?," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114539, European Association of Agricultural Economists.
    10. Sauer, J., 2007. "Monotonicity and Curvature – A Bootstrapping Approach," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 42, March.
    11. Dawei Zhang & Zhuo (June) Cheng & Hasan A. Qurban H. Mohammad & Barrie R. Nault, 2015. "Research Commentary—Information Technology Substitution Revisited," Information Systems Research, INFORMS, vol. 26(3), pages 480-495, September.
    12. Andrea Mantovi, 2016. "Smooth preferences, symmetries and expansion vector fields," Journal of Economics, Springer, vol. 119(2), pages 147-169, October.
    13. Robert G. Chambers & Erik Lichtenberg, 1994. "Simple Econometrics of Pesticide Productivity," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(3), pages 407-417.
    14. Brännlund, Runar & Lundgren, Tommy, 2005. "Swedish Industry and Kyoto – An Assessment of the Effects of the European CO2 Emission Permit Trading System," Umeå Economic Studies 668, Umeå University, Department of Economics.
    15. Tchale, Hardwick & Sauer, Johannes & Wobst, Peter, 2005. "Impact of Alternative Soil Fertility Management Options on Maize Productivity in Malawi’s Smallholder Farming System," Discussion Papers 276262, University of Bonn, Center for Development Research (ZEF).
    16. Byerlee, Derek & Murgai, Rinku, 2001. "Sense and sustainability revisited: the limits of total factor productivity measures of sustainable agricultural systems," Agricultural Economics, Blackwell, vol. 26(3), pages 227-236, December.
    17. Chambers, Robert G. & Pope, Rulon D., 1993. "A Virtually Ideal Production System: Specifying and Estimating the VIPS Model," Working Papers 197785, University of Maryland, Department of Agricultural and Resource Economics.
    18. Stefan Baumgärtner & Martin F. Quaas, 2010. "Managing increasing environmental risks through agrobiodiversity and agrienvironmental policies," Agricultural Economics, International Association of Agricultural Economists, vol. 41(5), pages 483-496, September.
    19. Stefan Baumgärtner & Martin F. Quaas, 2007. "Agro-biodiversity as natural insurance and the development of financial insurance markets," Working Paper Series in Economics 61, University of Lüneburg, Institute of Economics.
    20. Flaig Gebhard & Rottmann Horst, 2001. "Input Demand and the Shortand Long-Run Employment Thresholds: An Empirical Analysis for the German Manufacturing Sector," German Economic Review, De Gruyter, vol. 2(4), pages 367-384, December.

    More about this item

    Keywords

    Crop Production/Industries; Farm Management; Resource /Energy Economics and Policy;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:eaae11:114628. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/eaaeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.