Economic management in organic agriculture - Organic Agriculture: A Global Perspective - page 231

Chapter 10
Economic management in organic agriculture
Els Wynen*, Eco Landuse Systems, Australia
*Dr Els Wynen, Eco Landuse Systems, 3 Ramage Place, Flynn, ACT 2615, Australia. Tel/fax: [phone],
Email: [e-mail]
Introduction
The old question, 'But is it profitable to farm organically?' will always be with us, at least for
those who have not followed organic agriculture closely.
The answer to this question is that 'it depends'. Whether land under organic management
can be as productive as conventional farming depends on, among other factors, what is
included in the comparison. How long is the time frame under consideration? Looking at any
time within the first period of one rotation is not likely to show organic agriculture in a positive
light. Similarly, if only the private (on-farm) costs are considered while neglecting the public
(off-farm) costs or externalities, such as consumer and environmental health, the organic
system may not always compare well. The willingness of some consumers to pay extra for
organic produce, or of some governments to support organic agriculture, ref lects the thought
that these externalities should be counted. The taxing of certain agricultural inputs such as
pesticides, as some Scandinavian countries do (Schou and Streibig 1999, Jesper Schou, pers.
comm. 2005) is another way in which to acknowledge and force producers to internalise exter-
nalities of agricultural activities. It aids in redressing the difference in agricultural production
costs between the two systems, thus inf luencing the answer to the profitability question. But,
one may say, even if farmers can make a living when receiving premiums and subsidies, what
are the chances that organic farming can feed the world without destroying it - as some would
like us to believe that that is what would happen with increasing conversion to organic man-
agement (Avery 1995).
Economic management
Established farms
Many in organic agriculture have moved on from whether organic agriculture works to how it
works, and finding efficient solutions for if and when it does not work. Already in the 1980s,
there was a movement away from comparing farm results between the two systems towards
exploring different options on an organic farm (Dlouhy and Nilsson 1983). Despite this reso-
lution, comparisons continued in many countries, if only to provide a reference to changes
under organic management.
Klepper et al . (1977) published one of the first and best-known economic comparisons
between organic and conventional farming in the United States of America (USA), with a follow-
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