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Differential uncertainties and risk attitudes between conventional and organic producers: the case of Spanish arable crop farmers

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  • Teresa Serra
  • David Zilberman
  • José M. Gil

Abstract

The growing importance of economic factors in farmers' decisions to go organic has raised interest in characterizing the economic behavior of organic versus conventional farms. In general, published analyses so far have not considered differential uncertainties, abilities to control production risk, and farmers' risk preferences between conventional and organic practices when comparing these techniques. Our article attempts to assess this issue. We use a model of farmer decision under risk to analyze the differential values between organic and conventional Spanish arable crop farms and to assess the incentives for adoption of organic practices. Results show that organic and conventional farms do have different production risks as well as different aversions to risk. Organic price premiums and subsidies are found to be powerful instruments to motivate adoption of organic techniques. Copyright (c)2008 International Association of Agricultural Economists.

Suggested Citation

  • Teresa Serra & David Zilberman & José M. Gil, 2008. "Differential uncertainties and risk attitudes between conventional and organic producers: the case of Spanish arable crop farmers," Agricultural Economics, International Association of Agricultural Economists, vol. 39(2), pages 219-229, September.
  • Handle: RePEc:bla:agecon:v:39:y:2008:i:2:p:219-229
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    Cited by:

    1. Dörschner, Till & Musshoff, Oliver, 2013. "Does the risk attitude influence the farmers' willingness to participate in agri-environmental measures? – A normative approach to evaluate ecosystem services," 53rd Annual Conference, Berlin, Germany, September 25-27, 2013 156112, German Association of Agricultural Economists (GEWISOLA).
    2. Zein Kallas & Teresa Serra & José Maria Gil, 2010. "Farmers' objectives as determinants of organic farming adoption: the case of Catalonian vineyard production," Agricultural Economics, International Association of Agricultural Economists, vol. 41(5), pages 409-423, September.
    3. Teresa Serra & Barry Goodwin, 2009. "The efficiency of Spanish arable crop organic farms, a local maximum likelihood approach," Journal of Productivity Analysis, Springer, vol. 31(2), pages 113-124, April.
    4. Pascucci, Stefano & Capitanio, Fabian & Del Giudice, Teresa, 2010. "Value Creation Strategies in Credence Food Productions: The Case of Organic Farming in Italy," 2010 Internatonal European Forum, February 8-12, 2010, Innsbruck-Igls, Austria 100474, International European Forum on Innovation and System Dynamics in Food Networks.
    5. Laepple, Doris & Kelley, Hugh, 2014. "Spatial dependence in the adoption of organic drystock farming in Ireland," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182759, European Association of Agricultural Economists.
    6. Latruffe, Laure & Nauges, Celine, 2010. "Converting to organic farming in France: Is there a selection problem?," 120th Seminar, September 2-4, 2010, Chania, Crete 109386, European Association of Agricultural Economists.
    7. Laure Latruffe & Céline Nauges, 2014. "Technical efficiency and conversion to organic farming: the case of France," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 41(2), pages 227-253.
    8. Jeroen A. Veraart & Rianne Duinen & Jan Vreke, 2017. "Evaluation of Socio-Economic Factors that Determine Adoption of Climate Compatible Freshwater Supply Measures at Farm Level: a Case Study in the Southwest Netherlands," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 31(2), pages 587-608, January.
    9. Qiu, Yueming & Colson, Gregory & Grebitus, Carola, 2014. "Risk preferences and purchase of energy-efficient technologies in the residential sector," Ecological Economics, Elsevier, vol. 107(C), pages 216-229.
    10. Serra, Teresa & Oude Lansink, Alfons, 2014. "Measuring the impacts of production risk on technical efficiency: A state-contingent conditional order-m approach," European Journal of Operational Research, Elsevier, vol. 239(1), pages 237-242.
    11. repec:eee:agisys:v:156:y:2017:i:c:p:115-125 is not listed on IDEAS
    12. Finger, Robert & Möhring, Niklas & Dalhaus, Tobias & Böcker, Thomas, 2017. "Revisiting Pesticide Taxation Schemes," Ecological Economics, Elsevier, vol. 134(C), pages 263-266.
    13. repec:gam:jsusta:v:9:y:2017:i:4:p:545-:d:94918 is not listed on IDEAS
    14. Viaggi, Davide & Raggi, Meri & Gomez y Paloma, Sergio, 2011. "Farm-household investment behaviour and the CAP decoupling: Methodological issues in assessing policy impacts," Journal of Policy Modeling, Elsevier, vol. 33(1), pages 127-145, January.
    15. Musshoff, Oliver & Hirschauer, Norbert, 2012. "Planspiele als experimentelle Methode der Politikfolgenabschätzung: Das Beispiel der Stickstoffextensivierung," 52nd Annual Conference, Stuttgart, Germany, September 26-28, 2012 137164, German Association of Agricultural Economists (GEWISOLA).
    16. Moro, Daniele & Sckokai, Paolo, 2013. "The impact of decoupled payments on farm choices: Conceptual and methodological challenges," Food Policy, Elsevier, vol. 41(C), pages 28-38.
    17. Bocquého, G. & Jacquet, F., 2010. "The adoption of switchgrass and miscanthus by farmers: Impact of liquidity constraints and risk preferences," Energy Policy, Elsevier, vol. 38(5), pages 2598-2607, May.
    18. Dörschner, T. & Musshoff, O., 2015. "How do incentive-based environmental policies affect environment protection initiatives of farmers? An experimental economic analysis using the example of species richness," Ecological Economics, Elsevier, vol. 114(C), pages 90-103.
    19. Nicolai V. Kuminoff & Ada Wossink, 2010. "Why Isn't More US Farmland Organic?," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(2), pages 240-258.

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