Agriculture Reference
In-Depth Information
the potential for price reduction is likely to be tempered by increased input costs, especially
those of land.
Conclusions
In this chapter, the economics of organic agriculture for farmers is considered, which includes
issues surrounding yields, inputs, outputs and returns to farming. Off-farm effects are not
considered here. In general, the financial results can be positive for organic farmers, but are
not necessarily so. Details about the local situation are important for the results, such as the
history of the farm, the particular enterprise, prevailing input and output prices, and domestic
and international policies. The question also arises how easy it is to get to the state of organic
management without failing financially in the first (transitional) stage. Important factors for
success include planning for conversion related to the use of existing resources, the need of
investments, changes in yields and total production, input availability and prices, marketing
opportunities and cash f flow. As whole-country transition to organic farming would inf luence
such measures as input availability and prices and output prices, studies have been undertaken
to model the effects of such changes. No disasters are obvious, though studies heavily depend
on assumptions.
For the future, one of the strengths of the industry can be found in an increasing body of
knowledge, not only on organic practices, but also on the effect of policies. Other strengths
include the established standards and certification systems, and the existing market. Weak-
nesses or threats seem more numerous. The first is related to standards, including fraud, both
by producers and certification agencies, and the possibility of accidents. The second is in the
area of international trade, where the proliferation of standards and compliance schemes can
make trade difficult for exporting countries. The desire of some countries to restrict interna-
tional trade, and the absence of a scientific approach in some of the criteria are two more issues
in the arena of international trade. Other threats concern consumer prices and governmental
regulations. High consumer prices are a deterrent to growth in demand of organic products,
and government regulations in one country cause a non-level playing field for producers in
other countries.
References
Avery, D. 1995. Saving the Planet with Pesticides and Plastics . Hudson Institute, Indianapolis.
Butler, L. 2002. The economics of organic milk production in California: a comparison with
conventional costs. American Journal of Alternative Agriculture 17(2): 83-91.
Clark, S., Klonsky, K., Livingston, P. and Temple, S. 1999. Crop-yield and economic compari-
sons of organic, low-input, and conventional farming systems in California's Sacramento
Valley. American Journal of Alternative Agriculture 14(3): 109-121.
Commins, K. and Kung Wai, O. 2003. Regulations of imports into major markets. In:
Westermayer, C. and Geier, B (eds.) The Organic Guarantee System - The Need and Strategy
for Harmonisation and Equivalence . IFOAM/ FAO/ UNCTAD, Bonn. pp. 112-117.
Defra 2005. Organic Food and Farming: Action Plan to Develop Organic Food and Farming in
England . Department for Environment, Food and Rural Affairs, London. http://www.
defra.gov.uk/farm/organic/actionplan/actionplan.htm.
Delate, K., Duffy, M., Chase, C., Holste, A., Friedrich, H. and Wantate, N. 2003. An economic
comparison of organic and conventional grain crops in a long-term agroecological
research (LTAR) site in Iowa. American Journal of Alternative Agriculture 18(2): 59-69.
Deutsche Welle 2002. Nitrogen Scandal Reveals Historical Traces . Deutsche Welle, Bonn. http://
www.dw-world.de/dw/article/0,1564,568009,00.html.
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