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Economic growth of farms: An empirical analysis on organic farming

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  • Brenes Munoz, T.
  • Lakner, Sebastian
  • Brummer, Bernhard

Abstract

This article investigates which factors influence the economic growth of organic farms. Organic farming has experienced a substantial growth in Germany since the beginning of the 1990s until today. Most organic farms are concentrated in the southern region of the country, Bavaria and Baden-Wuerttemberg. While some of these farms have expanded their business size, others have contracted, reconverted to conventional or ceased to operate. Using a panel data of 318 farms and a System GMM method, the economic growth of organic farms is analyzed. Regression results suggest that organic farms with high revenue from agriculture are less likely to grow than smaller farms. Growth is influenced by livestock intensity, multiple job holding, share of grasslands areas, soil quality and agri-environmental payments for organic farming.

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Bibliographic Info

Paper provided by International Association of Agricultural Economists in its series 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil with number 126756.

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Date of creation: 2012
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Handle: RePEc:ags:iaae12:126756

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Keywords: farm-growth; organic farming; Gibrat’s law; part-time farming; Agricultural and Food Policy; Research Methods/ Statistical Methods;

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  14. Blandina Oliveira & Adelino Fortunato, 2005. "Firm Growth and Liquidity Constraints: A Dynamic Analysis," GEMF Working Papers 2005-07, GEMF - Faculdade de Economia, Universidade de Coimbra.
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