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Technical Efficiency in Organic Farming: an Application on Italian Cereal Farms using a Parametric Approach

Madau, Fabio (2005) Technical Efficiency in Organic Farming: an Application on Italian Cereal Farms using a Parametric Approach. In: Conference Proceedings, CD-ROM.

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Summary

A stochastic frontier production model was applied to estimate technical efficiency in a sample of Italian organic and conventional cereal farms. The main purpose was to assess which production technique revealed higher efficiency. Statistical tests on the pool sample model suggested that differences between the two cultivation methods were significant from a technological viewpoint. Separate analyses of two sub-samples (93 and 138 observations for organic and conventional farms, respectively) found that conventional farms were significantly more efficient than organic farms, with respect to their specific technology (0.892 vs. 0.825). This implies that organic (conventional) cereal farmers could increase their income to 99.19 €/ha (40.95 €/ha). Analysis also estimated that land was the technical input with the highest elasticity for both technologies. Furthermore, findings indicated that 63.7% of the differentials between observed and best-practice output was explained by technical inefficiency for the conventional group, while this value was close to unity for organic farms. Some policy implications can be drawn from these findings.


EPrint Type:Conference paper, poster, etc.
Type of presentation:Paper
Keywords:Organic farming, Comparison analysis, Cereal-growing, Technical efficiency, Stochastic frontier production models
Subjects: Farming Systems > Farm economics
Research affiliation: Italy > INEA National Institute of Agricultural Economy
Related Links:http://www.inea.it
Deposited By: Madau, Fabio
ID Code:5802
Deposited On:28 Sep 2005
Last Modified:12 Apr 2010 07:31
Document Language:English
Status:Published
Refereed:Not peer-reviewed

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