Economic sustainability and risk efficiency of organic versus conventional cropping systems

Summary

Environmental, social and economic attributes are important for the sustainability of a farming system. Resilience is also important yet has seldom been directly considered in evaluations of economic sustainability. In economic terms, resilience has to do with the capacity of the farm business to survive various risks and other shocks. A whole-farm stochastic simulation model over a six-year planning horizon was used to analyse organic and conventional cropping systems using a model of a representative farm in Eastern Norway. The relative economic sustainability of alternative systems under changing assumptions about future technology and price regimes was examined in terms of financial survival to the end of the planning period. The same alternatives were also compared in terms of stochastic efficiency. The results illustrate possible confl icts between pursuit of risk efficiency and sustainability. The model developed could be useful in supporting farmers’ choices between farming systems as well as in helping policy makers to develop more sharply targeted policies.