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

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

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.

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File URL: http://purl.umn.edu/6478
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Paper provided by European Association of Agricultural Economists in its series 107th Seminar, January 30-February 1, 2008, Sevilla, Spain with number 6478.

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Date of creation: 2008
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Handle: RePEc:ags:eaa107:6478
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  1. Armsworth, Paul R. & Kendall, Bruce E. & Davis, Frank W., 2004. "An introduction to biodiversity concepts for environmental economists," Resource and Energy Economics, Elsevier, vol. 26(2), pages 115-136, June.
  2. G. A. A. Wossink, 2003. "Biodiversity conservation by farmers: analysis of actual and contingent participation," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 30(4), pages 461-485, December.
  3. van Wenum, Jaap & Wossink, Ada & Renkema, Jan, 2002. "Location-Specific Modeling For Optimizing Wildlife Management On Crop Farms," 2002 Annual meeting, July 28-31, Long Beach, CA 19705, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  4. Salvatore Di Falco & Charles Perrings, 2004. "Crop Biodiversity, Risk Management and the Implications of Agricultural Assistance," Working Papers 0084, National University of Ireland Galway, Department of Economics, revised 2004.
  5. Pacini, Cesare & Giesen, G.W.J. & Vazzana, V. & Wossink, Ada, 2002. "Sustainability of Organic, Integrated and Conventional Farming Systems in Tuscany," 13th Congress, Wageningen, The Netherlands, July 7-12, 2002 6956, International Farm Management Association.
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