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Efficiency Analysis of Organic Farming Systems A Review of Concepts, Topics, Results and Conclusions

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  • Lakner, Sebastian
  • Breustedt, Gunnar

Abstract

This article summarizes the literature on efficiency and productivity of organic farming. We distinguish between studies that concentrate on specific problems of the organic sector and studies that compare conventional and organic farms. Organic farms can on average improve their efficiency by 21%-points (SFA) and 27%-points (DEA). In comparing efficiency and productivity of organic with conventional farms sample selection is a major challenge, since the organic farms have a different farm-structure and are often represented by a relatively small number of observations. In studies taking into account selectivity problems organic farms are on average 4%-points less efficient than conventional farms. In four of five studies, organic farms are less productive than conventional farms and productivity is for about 20%-points lower than on conventional farms, which fits the results of yield comparisons. Efficiency influences the decision to convert to organic farming, but it is an empirical question, whether this influence is positive or negative. The impact of subsidies on farm level efficiency is found to be negative in most studies. Organic farms show the same or a higher degree of efficiency if environmental variables are taken into account.

Suggested Citation

  • Lakner, Sebastian & Breustedt, Gunnar, 2017. "Efficiency Analysis of Organic Farming Systems A Review of Concepts, Topics, Results and Conclusions," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 66(2), June.
    • Handle: RePEc:ags:gjagec:303542
    DOI: 10.22004/ag.econ.303542
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    Cited by:

    1. Maria Raimondo & Francesco Caracciolo & Concetta Nazzaro & Giuseppe Marotta, 2021. "Organic Farming Increases the Technical Efficiency of Olive Farms in Italy," Agriculture, MDPI, vol. 11(3), pages 1-15, March.
    2. Basurto Hernandez, Saul & Maddison, David & Banerjee, Anindya, 2018. "The effect of PROCAMPO on farms’ technical efficiency: A Stochastic Frontier Analysis," 2018 Annual Meeting, August 5-7, Washington, D.C. 274376, Agricultural and Applied Economics Association.
    3. Rebecca Buttinelli & Raffaele Cortignani & Gabriele Dono, 2021. "Financial sustainability in Italian Organic Farms: An analysis of the FADN Sample," Economia agro-alimentare, FrancoAngeli Editore, vol. 23(3), pages 1-32.
    4. Maria Assunta D?Oronzio & Carmela De Vivo, 2021. "Organic and conventional farms in the Basilicata region: A comparison of structural and economic variables using FADN data," Economia agro-alimentare, FrancoAngeli Editore, vol. 23(3), pages 1-17.
    5. Schulte, Hinrich D. & Armbrecht, Linda & Bürger, Rasmus & Gauly, Matthias & Musshoff, Oliver & Hüttel, Silke, 2018. "Let the cows graze: An empirical investigation on the trade-off between efficiency and farm animal welfare in milk production," Land Use Policy, Elsevier, vol. 79(C), pages 375-385.
    6. Czyżewski, Bazyli & Kryszak, Łukasz, 2023. "Can a pursuit of productivity be reconciled with sustainable practices in small-scale farming? – Evidence from central and eastern Europe," MPRA Paper 117642, University Library of Munich, Germany, revised 31 May 2023.
    7. Froehlich, Anderson G. & Melo, Andrea S.S.A. & Sampaio, Breno, 2018. "Comparing the Profitability of Organic and Conventional Production in Family Farming: Empirical Evidence From Brazil," Ecological Economics, Elsevier, vol. 150(C), pages 307-314.

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