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Efficiency In Agricultural Production Of Biodiversity: Organic Vs. Conventional Practices

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  • Sipilainen, Timo
  • Marklund, Per-Olov
  • Huhtala, Anni

Abstract

Promotion of environmental sustainable farming practices is an important policy goal for the whole agricultural sector. However, when the efficiency of production is measured in practice, enhancement of environmental quality such as biodiversity and other environmental amenities does not seem to be recognized as a positive output produced by agriculture. Here, we include crop diversity index as an indicator of environmental output in a comparison of efficiency of conventional and organic crop farms. Non-parametric technical efficiency scores are estimated applying data envelopment analysis on a sample of Finnish crop farms for 1994 – 2002. The results show that in a pooled data set conventional crop farms are more technically efficient than organic farms when only crop output is considered. When taking crop diversity into account the difference between production techniques vanishes. In separate comparisons of conventional and organic farms, the average efficiencies of the two groups do not differ statistically significantly. Thus, the assumptions on the technology and reference sets are crucial with respect to the results of the comparison. This has important implications for policy evaluations when alternative farming technologies are compared.

Suggested Citation

  • Sipilainen, Timo & Marklund, Per-Olov & Huhtala, Anni, 2008. "Efficiency In Agricultural Production Of Biodiversity: Organic Vs. Conventional Practices," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6478, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa107:6478
    DOI: 10.22004/ag.econ.6478
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    References listed on IDEAS

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    1. Singh, Mrinila & Maharjan, Keshav Lall & Maskey, Bijan, 2015. "Factors influencing organic farm income in Chitwan district of Nepal," 2015 Conference, August 9-14, 2015, Milan, Italy 212234, International Association of Agricultural Economists.
    2. Solovyeva, Irina & Nuppenau, Ernst-August, 2013. "Environmental Efficiency of Traditional Farming with Consideration of Grassland Biodiversity: Implication for the Ukrainian Carpathians," 87th Annual Conference, April 8-10, 2013, Warwick University, Coventry, UK 158848, Agricultural Economics Society.
    3. Djokoto, Justice G., 2015. "Technical efficiency of organic agriculture: a quantitative review," Studies in Agricultural Economics, Research Institute for Agricultural Economics, vol. 117(2), pages 1-11, August.
    4. Czekaj, Tomasz G., 2015. "Measuring the Technical Efficiency of Farms Producing Environmental Output: Semiparametric Estimation of Multi-output Stochastic Ray Production Frontiers," 2015 Conference, August 9-14, 2015, Milan, Italy 211555, International Association of Agricultural Economists.
    5. Solovyeva, Irina & Nuppenau, Ernst-August, . "Improving Measures for Targeting Agri-Environmental Payments: The Case of High Nature Value Farming," Politica Agricola Internazionale - International Agricultural Policy, Edizioni L'Informatore Agrario, vol. 2012(4).

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