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Farmer response to policies promoting organic farming technologies in Finland

Author

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  • KS Pietola
  • AO Lansink

Abstract

This paper analyses factors determining the choice between standard and organic farming technology in Finland by numerically iterating a Bellman equation backwards in time. The unknown parameters of a switching-type Probit model are estimated by maximum likelihood estimation. The maximised values of the uncertain revenue streams are stimulated. The results suggest that decreasing output prices and increasing direct subsidies trigger the switch to organic farming. The switch is also more likely on farms having large land areas and low yields. Intensive livestock production and labour-intensive production decrease the probability of switching to organic farming. Copyright 2001, Oxford University Press.

Suggested Citation

  • KS Pietola & AO Lansink, 2001. "Farmer response to policies promoting organic farming technologies in Finland," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 28(1), pages 1-15, March.
    • Handle: RePEc:oup:erevae:v:28:y:2001:i:1:p:1-15
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