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Emergence of organic farming under imperfect competition: economic conditions and policy instruments

Listed author(s):
  • Mélanie Jaeck

    (Montpellier Business School)

  • Robert Lifran

    ()

    (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - UM3 - Université Paul-Valéry - Montpellier 3 - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - INRA Montpellier - Institut national de la recherche agronomique [Montpellier] - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)

  • Hubert Stahn

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique - ECM - Ecole Centrale de Marseille)

This paper explores the economic conditions for the viability of organic farming in a context of imperfect competition. While most research dealing with this issue has adopted an empirical approach, we propose a theoretical approach. Farmers have a choice between two technologies, the conventional one using two complementary inputs, chemicals and seeds, and the organic one only requiring organic seeds. The upstream markets are oligopolistic and the firms adopt Cournot behavior. The game is solved backward. The equilibrium distribution of the farmers between both sectors is obtained by a free-entry condition. Since multiple equilibria could exist, including the non-emergence of organic farming, we spell out viability conditions for organic farming. Then, using an “infant industry” argument, we propose several public policy instruments able to support the development of organic farming and assess their relative efficiency. Results could be useful to assess the conditions of emergence and viability of agricultural innovations in analogous contexts.

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Paper provided by HAL in its series Post-Print with number hal-01123391.

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Date of creation: 2014
Publication status: Published in Journal of Agricultural and Food Industrial Organization, De Gruyter, 2014, 12 (1), pp.95-108. 〈10.1515/jafio-2013-0025〉
Handle: RePEc:hal:journl:hal-01123391
DOI: 10.1515/jafio-2013-0025
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01123391
Contact details of provider: Web page: https://hal.archives-ouvertes.fr/

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  1. Jaeck, Melanie & Lifran, Robert, 2009. "Preferences, Norms and Constraints in farmers' agro-ecological choices. Case study using a choice experiments survey in the Rhone River Delta, France," 2009 Conference (53rd), February 11-13, 2009, Cairns, Australia 47948, Australian Agricultural and Resource Economics Society.
  2. Boccaletti, Stefano & Nardella, Michele, 2000. "Consumer Willingness To Pay For Pesticide-Free Fresh Fruit And Vegetables In Italy," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 3(03).
  3. Elodie Rouviere & Raphael Soubeyran, 2011. "Competition vs. quality in an industry with imperfect traceability," Economics Bulletin, AccessEcon, vol. 31(4), pages 3052-3067.
  4. Wheeler, Sarah Ann, 2008. "What influences agricultural professionals' views towards organic agriculture?," Ecological Economics, Elsevier, vol. 65(1), pages 145-154, March.
  5. Essi Eerola & Anni Huhtala, 2008. "Voting for Environmental Policy Under Income and Preference Heterogeneity," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(1), pages 256-266.
  6. Robert Klepper & William Lockeretz & Barry Commoner & Michael Gertler & Sarah Fast & Daniel O'Leary & Roger Blobaum, 1977. "Economic Performance and Energy Intensiveness on Organic and Conventional Farms in the Corn Belt: A Preliminary Comparison," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 59(1), pages 1-12.
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