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Assessing agricultural policy incentives for Greek organic agriculture: A Real options approach

  • Tzouramani, Irene
  • Sintori, Alexandra
  • Liontakis, Angelos E.
  • Alexopoulos, George

The adoption of organic agriculture or livestock involves risk and uncertainty, and to overcome this, well designed schemes are required. Are the current support measures attractive for farmers who wish to convert to organic? At first, this study tries to assess the optimal investment trigger for a new comer into organic dairy sheep farming system and secondly, to evaluate the investment profitability of an existing organic farmer in his attempt to improve his farm. Results indicate that the framework of real options analysis is an appropriate form of analysis if the question of investment profitability is examined under risk and uncertainty and the role of economic subsidies offered to organic farmers is assessed.

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File URL: http://purl.umn.edu/61096
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Paper provided by European Association of Agricultural Economists in its series 114th Seminar, April 15-16, 2010, Berlin, Germany with number 61096.

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Date of creation: Apr 2010
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Handle: RePEc:ags:eaa114:61096
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  1. Lyubov Kurkalova & Catherine Kling & Jinhua Zhao, 2006. "Green Subsidies in Agriculture: Estimating the Adoption Costs of Conservation Tillage from Observed Behavior," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 54(2), pages 247-267, 06.
  2. Amir K. Abadi Ghadim & David J. Pannell & Michael P. Burton, 2005. "Risk, uncertainty, and learning in adoption of a crop innovation," Agricultural Economics, International Association of Agricultural Economists, vol. 33(1), pages 1-9, 07.
  3. Oliver Musshoff & Norbert Hirschauer, 2008. "Adoption of organic farming in Germany and Austria: an integrative dynamic investment perspective," Agricultural Economics, International Association of Agricultural Economists, vol. 39(1), pages 135-145, 07.
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