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Organic cultivation and farmland prices: Does certification matter?

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  • Seifert, Stefan
  • Hüttel, Silke
  • Werwatz, Axel

Abstract

This paper investigates price differentials between organically and conventionally farmed arable land. Organic commodities offer higher prices and environmental benefits such as improved soil constitution, where land buyers gauge these benefits against lower yields at higher risk, switching and higher production cost compared to conventional production. Combining land transaction and cover data from EU's Integrated Administrative Control System between 2005-2019, we test the hypothesis of positive valuation of organic cultivation, also for conventional use after sale. Based on a double robust approach, we find on average no effect but markups for conventional and markdowns for organic use post-sale.

Suggested Citation

  • Seifert, Stefan & Hüttel, Silke & Werwatz, Axel, 2023. "Organic cultivation and farmland prices: Does certification matter?," FORLand Working Papers 28 (2023), Humboldt University Berlin, DFG Research Unit 2569 FORLand "Agricultural Land Markets – Efficiency and Regulation".
    • Handle: RePEc:zbw:forlwp:282023
    DOI: 10.18452/26264
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    References listed on IDEAS

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    More about this item

    Keywords

    Organic agriculture; farmland pricing; Integrated Administrative Control System (IACS); ecosystem services; matching;
    All these keywords.

    JEL classification:

    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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