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Is organic farming inefficient, or are indicators of economic performance of agriculture incomplete?

Huhtala, Anni (2003) Is organic farming inefficient, or are indicators of economic performance of agriculture incomplete? MTT Discussion Papers (4), pp. 1-19.

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Summary

Organic farming is expected to alleviate the environmental burden of agriculture, since it rules out the use of chemicals such as synthetic fertilizers, pesticides, herbicides. However, organic farming technology may turn out to be less efficient when evaluated by conventional productivity measures that are less informative regarding environmental efficiency. We derive a framework for a combination of more comprehensive indicators reflecting whether organic farming increases sustainability in agriculture and how much of the total agricultural value added is produced at the expense of environmental deterioration. We show that it is important to separate flow and stock effects of pollution so that aggregate measurement is consistent with conventional national accounting. Shadow pricing of undesirable output and policy implications are discussed. For adoption of a technology and allocative efficiency in the agricultural sector, economic policy instruments should be redesigned and proper incentives through prices should be used.


EPrint Type:Journal paper
Keywords:national income accounting, environmental efficiency, technology choices
Subjects: Environmental aspects
Food systems > Policy environments and social economy
Research affiliation: Finland > MTT Agrifood Research
Related Links:http://www.mtt.fi/english/
Deposited By: Koistinen, Riitta
ID Code:8593
Deposited On:29 May 2006
Last Modified:12 Apr 2010 07:33
Document Language:English
Status:Published
Refereed:Not peer-reviewed

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