Production Risk and Technical Efficiency in Organic and Conventional Agriculture – The Case of Arable Farms in Germany

Tiedemann, Torben; Latacz‐Lohmann, Uwe

doi:10.1111/j.1477-9552.2012.00364.x

Cited by 55 publications

(45 citation statements)

References 48 publications

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“…This is consistent with the findings in previous literature that better quality soils can supply better nutrient to crops and, hence, can achieve more stable rice production compared with poorer soils [24,29]. In contrast, weather events, like drought and flood, have a risk-increasing effect on output.…”

Section: Estimation Results and Discussionsupporting

confidence: 82%

“…With a positive (negative) marginal production risk, a risk-averse farmer uses less (more) of the specific input than the risk-neutral farmer, and the input is known as risk-increasing (decreasing) by this output [24]. Kumbhakar [21] suggested a flexible approach to incorporate the inefficiency term with the Just and Pope function, by which the determinants of inefficiency are also examined:…”

Section: Integration Of Risk Into Stochastic Frontier Analysismentioning

confidence: 99%

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Investigating Yield Variability and Inefficiency in Rice Production: A Case Study in Central China

2016

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Insufficient and high variability in rice yield is a threat to food security in China, prompting the need for strategies to mitigate yield variability and increase productivity. This study investigates the presence of production risk and technical inefficiency for a sample of rice farms in the Xiangyang city of China using a stochastic production frontier framework. Results from the risk function reveal that labor and better soil quality have significant risk-reducing effects while machinery exerts a significant risk-increasing effect on rice production. The estimated mean technical efficiency score is 84%, suggesting that, on average, farmers could increase their rice production by 16%, without increasing the existing input levels by improving their management techniques. Factors that significantly affect technical efficiency are the age of farmers, female ratio, access and use of extension services, off-farm income, and the size of cultivated land. Results from this study suggest that yield variability and technical inefficiency in rice production can be reduced by appropriate choice of input combinations and elimination of mistakes in the production process through efficient management practices. Strategies, such as providing better extension services, loosening liquidity constraints facing farmers, and expanding rice farmers' producing area, would help to achieve minimum inefficiency in production.

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Section: Estimation Results and Discussionsupporting

confidence: 82%

Section: Integration Of Risk Into Stochastic Frontier Analysismentioning

confidence: 99%

Investigating Yield Variability and Inefficiency in Rice Production: A Case Study in Central China

2016

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“…For example, organic olive farms in Greece [8] and organic dairy farms in Germany [14] seem to use respectively less or similar labour than their conventional counterparts. Similar to the studies reported above, labour requirements on arable farms are in most cases higher on organic farms [20][21][22][23]31,32].…”

Section: Labour Use and Technical Efficiencysupporting

confidence: 75%

“…Three studies report lower labour use on organic dairy farms compared to conventional [14][15][16][17], and three suggest the opposite [1,18,19]. Likewise on organic arable cropping both cases of higher [18,20,21] and lower [20,22,23] labour use than conventional farms are reported.…”

Section: Labour Use and Farm Structurementioning

confidence: 99%

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Labour Use on Organic Farms: a Review of Research since 2000

Orsini

Padel

Lampkin

2018

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Organic farming is frequently associated with claims of more labour requirements than conventional. However, there is a fragmented knowledge about labour use on organic farms in terms of workload, nature and quality of employment provided. In the context of a growing organic demand and a need for more farmers to convert to reach policy targets set by many EU governments, it seems crucial to understand labour trends on organic farms and to what extent labour requirements may hinder the adoption of the organic methods. This paper presents a review of mainly European literature published since 2000. Studies presenting results by farm type usually indicate higher labour use per hectare on organic than conventional arable farms, whereas similar or lower labour use is reported on organic livestock farms, and the results are mixed for other farm types. We have identified in the existing literature two broad dimensions directly related with labour use, which need to be considered in comparative studies, namely farm structure (including farm type, but also farm size and diversification activities), and technical efficiency. These two broad dimensions give us insights into some more specific factors affecting labour use, and how labour is related with productivity and technical efficiency. Overall it appears that claims that labour requirements represent a concrete obstacle to the adoption of the organic methods need to be treated with caution, and more research is needed to understand the role of labour in farmers' decision to convert to organic farming. The review of the nature and quality of employment indicates positive health effects related to higher satisfaction and lower exposure to pesticides in organic agriculture as the most important advantages for farm workers. Overall, there is limited research on whether the organic sector provides better opportunities in terms of job prospects, wages and employment of women.

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Irrigation water policy analysis using a business simulation game

2016

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Despite numerous studies on farmers' responses to changing irrigation water policies, uncertainties remain about the potential of water pricing schemes and water quotas to reduce irrigation. Thus far, policy impact analysis is predominantly based upon rational choice models that assume behavioral assumptions, such as a perfectly rational profit‐maximizing decision maker. Also, econometric techniques are applied which could lack internal validity due to uncontrolled field data. Furthermore, such techniques are not capable of identifying ill‐designed policies prior to their implementation. With this in mind, we apply a business simulation game for ex ante policy impact analysis of irrigation water policies at the farm level. Our approach has the potential to reveal the policy‐induced behavioral change of the participants in a controlled environment. To do so, we investigate how real farmers from Germany, in an economic experiment, respond to a water pricing scheme and a water quota intending to reduce irrigation. In the business simulation game, the participants manage a “virtual” cash‐crop farm for which they make crop allocation and irrigation decisions during several production periods, while facing uncertain product prices and weather conditions. The results reveal that a water quota is able to reduce mean irrigation applications, while a water pricing scheme does not have an impact, even though both policies exhibit equal income effects for the farmers. However, both policies appear to increase the variation of irrigation applications. Compared to a perfectly rational profit‐maximizing decision maker, the participants apply less irrigation on average, both when irrigation is not restricted and when a water pricing scheme applies. Moreover, the participants' risk attitude affects the irrigation decisions.

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Production Risk and Technical Efficiency in Organic and Conventional Agriculture – The Case of Arable Farms in Germany

Cited by 55 publications

References 48 publications

Investigating Yield Variability and Inefficiency in Rice Production: A Case Study in Central China

Investigating Yield Variability and Inefficiency in Rice Production: A Case Study in Central China

Labour Use on Organic Farms: a Review of Research since 2000

Irrigation water policy analysis using a business simulation game

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