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Organic farmers or conventional farmers: Where's the money?

Author

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  • Uematsu, Hiroki
  • Mishra, Ashok K.

Abstract

There is growing evidence that organic farming is a rapidly expanding economic sector in the U.S. However, an unanswered question is whether organic farmers are better off than conventional farmers when it comes to farm household income. Using large farm-level data and a matching estimator, this study explores the relationship between organic certification and farm household income with its various components. Contrary to expectations, certified organic farmers do not earn significantly higher household income than conventional farmers. Though certified organic crop producers earn higher revenue, they incur higher production expenses as well. In particular, certified organic producers spend significantly more on labor, insurance, and marketing charges than conventional farmers. The results suggest that the lack of economic incentives can be an important barrier to conversion to organic farming.

Suggested Citation

  • Uematsu, Hiroki & Mishra, Ashok K., 2012. "Organic farmers or conventional farmers: Where's the money?," Ecological Economics, Elsevier, vol. 78(C), pages 55-62.
  • Handle: RePEc:eee:ecolec:v:78:y:2012:i:c:p:55-62
    DOI: 10.1016/j.ecolecon.2012.03.013
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    Cited by:

    1. Magali Aubert & Geoffroy Enjolras, 2016. "Which stability for marketing channels? The case of short food supply chains in French agriculture," Post-Print hal-01404562, HAL.
    2. Koirala, Krishna H. & Mishra, Ashok K. & Mohanty, Samarendu, 2014. "The Role of Gender in Agricultural Productivity in the Philippines: The Average Treatment Effect," 2015 Annual Meeting, January 31-February 3, 2015, Atlanta, Georgia 195705, Southern Agricultural Economics Association.
    3. Mzoughi, Naoufel, 2014. "Do organic farmers feel happier than conventional ones? An exploratory analysis," Ecological Economics, Elsevier, vol. 103(C), pages 38-43.
    4. Magali Aubert & Geoffroy Enjolras, 2015. "Stabilité ou instabilité des stratégies commerciales ? Le cas des circuits courts dans l'agriculture française," Post-Print hal-01296421, HAL.
    5. Delbridge, Timothy A. & King, Robert P., 2016. "Transitioning to Organic Crop Production: A Dynamic Programming Approach," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 0(Number 3), pages 1-18, September.
    6. Laura Schmitt Olabisi & Ryan Qi Wang & Arika Ligmann-Zielinska, 2015. "Why Don’t More Farmers Go Organic? Using A Stakeholder-Informed Exploratory Agent-Based Model to Represent the Dynamics of Farming Practices in the Philippines," Land, MDPI, Open Access Journal, vol. 4(4), pages 1-24, October.
    7. Schilling, Brian J. & Attavanich, Witsanu & Jin, Yanhong, 2014. "Does Agritourism Enhance Farm Profitability?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 0(Number 1), pages 1-28, April.
    8. Joo, Hyunjeong & Khanal, Aditya R. & Mishra, Ashok K., 2013. "Farmers’ Participation in Agritourism: Does It Affect the Bottom Line?," Agricultural and Resource Economics Review, Cambridge University Press, vol. 42(03), pages 471-490, December.
    9. Jeffrey Gillespie & Richard Nehring, 2013. "Comparing economic performance of organic and conventional U.S. beef farms using matching samples," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(2), pages 178-192, April.
    10. Mishra, Ashok K. & Kumar, Anjani & Joshi, Pramod K. & D'souza, Alwin, 2016. "Impact of contracts in high yielding varieties seed production on profits and yield: The case of Nepal," Food Policy, Elsevier, vol. 62(C), pages 110-121.
    11. Qushim, Berdikul & Gillespie, Jeffrey, 2016. "Women Farm Operators in the U.S. Meat Goat Production: Who is More Productive?," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 230004, Southern Agricultural Economics Association.
    12. Hermann, Daniel & Musshoff, Oliver & Agethen, Katrin, 2014. "I will never switch sides: an experimental approach to determine drivers for investment decisions of conventional and organic hog farmers," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 183084, European Association of Agricultural Economists.
    13. Khanal, Aditya & Mishra, Ashok, 2016. "Are all farms better-off growing organic? An unconditional quantile regression approach," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235618, Agricultural and Applied Economics Association.
    14. Parvathi, Priyanka & Waibel, Hermann, 2015. "Is Organic Agriculture and Fair Trade Certification a way out of Crisis? Evidence from Black Pepper Farmers in India," 55th Annual Conference, Giessen, Germany, September 23-25, 2015 209209, German Association of Agricultural Economists (GEWISOLA).
    15. repec:eee:ecolec:v:150:y:2018:i:c:p:307-314 is not listed on IDEAS
    16. repec:eee:jfpoli:v:75:y:2018:i:c:p:147-157 is not listed on IDEAS

    More about this item

    Keywords

    Organic farming; Propensity score matching; Average treatment effect; Nearest neighbor matching; Farm household income; Farm revenue;

    JEL classification:

    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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