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A comparison of the economic and environmental performances of conventional and organic farming: Evidence from financial statements

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  • Josep Mª Argilés

    ()
    (Universitat de Barcelona (UB))

  • Néstor Duch Brown

    ()
    (Institut d'Economia de Barcelona (IEB); Universitat de Barcelona (UB))

Abstract

While conventional farming systems face serious problems of sustainability, organic agriculture is seen as a more environmentally friendly system as it favours renewable resources, recycles nutrients, uses the environment’s own systems for controlling pests and diseases, sustains ecosystems, protects soils, and reduces pollution. At the same time organic farming promotes animal welfare, the use of natural foodstuffs, product diversity and the avoidance of waste, among other practices. However, the future of organic agriculture will depend on its economic viability and on the determination shown by governments to protect these practices. This paper performs panel regressions with a sample of Catalan farms (Spain) to test the influence of organic farming on farm output, costs and incomes. It analyses the cost structures of both types of farming and comments on their social and environmental performance.

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Bibliographic Info

Paper provided by Institut d'Economia de Barcelona (IEB) in its series Working Papers with number 2007/8.

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Length: 30 pages
Date of creation: 2007
Date of revision:
Handle: RePEc:ieb:wpaper:2007/12/doc2007-8

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Keywords: Organic agriculture; conventional agriculture; organic farming; conventional farming; social and environmental performance; financial performance; social and environmental accounting.;

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References

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  1. 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.
  2. Schmitt, Gunther, 1991. "Why Is the Agriculture of Advanced Western Economies Still Organized by Family Farms? Will This Continue to Be So in the Future?," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 18(3-4), pages 443-58.
  3. Gil, Jose Maria & Gracia, Azucena & Sanchez Garcia, Mercedes, 2000. "Market Segmentation And Willingness To Pay For Organic Products In Spain," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IAMA), vol. 3(02).
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  6. Jules Pretty & Craig Brett & David Gee & Rachel Hine & Chris Mason & James Morison & Matthew Rayment & Gert Van Der Bijl & Thomas Dobbs, 2001. "Policy Challenges and Priorities for Internalizing the Externalities of Modern Agriculture," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 44(2), pages 263-283.
  7. Oude Lansink, Alfons G.J.M. & Jensma, Klaske, 2003. "Analysing Profits and Economic Behaviour of Organic and Conventional Dutch Arable Farms," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 4(2), August.
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  10. Kerselaers, Eva & De Cock, Lieve & Lauwers, Ludwig & Van Huylenbroeck, Guido, 2007. "Modelling farm-level economic potential for conversion to organic farming," Agricultural Systems, Elsevier, vol. 94(3), pages 671-682, June.
  11. Pretty, J. N. & Brett, C. & Gee, D. & Hine, R. E. & Mason, C. F. & Morison, J. I. L. & Raven, H. & Rayment, M. D. & van der Bijl, G., 2000. "An assessment of the total external costs of UK agriculture," Agricultural Systems, Elsevier, vol. 65(2), pages 113-136, August.
  12. Batte, Marvin T. & Hooker, Neal H. & Haab, Timothy C. & Beaverson, Jeremy, 2007. "Putting their money where their mouths are: Consumer willingness to pay for multi-ingredient, processed organic food products," Food Policy, Elsevier, vol. 32(2), pages 145-159, April.
  13. S.J. Dima & A.N. Odero, 1997. "Organic Farming for Sustainable Agricultural Production. A Brief Theoretical Review and Preliminary Empirical Evidence," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 10(2), pages 177-188, September.
  14. Steven Were Omamo, 1998. "Farm-to-market transaction costs and specialisation in small-scale agriculture: Explorations with a non-separable household model," Journal of Development Studies, Taylor & Francis Journals, vol. 35(2), pages 152-163.
  15. Philippe Mahenc, 2007. "Are green products over-priced?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 38(4), pages 461-473, December.
  16. 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.
  17. Edwards-Jones, G. & Howells, O., 2001. "The origin and hazard of inputs to crop protection in organic farming systems: are they sustainable?," Agricultural Systems, Elsevier, vol. 67(1), pages 31-47, January.
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Cited by:
  1. Marasteanu, I. Julia & Jaenicke, Edward C., 2013. "Agglomeration and Spatial Dependence in Certified Organic Operations in the United States," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149551, Agricultural and Applied Economics Association.

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