Impacts of Institutional Arrangements on the Profitability and Profit Efficiency of Organic Rice in Thailand

Summary

This study assesses the performance of organic small farmers in Thailand under different institutional arrangements and over time. It was found that while organic farmers were significantly more profitable and profit efficient than conventional farmers, the level of profitability varies under different intermediaries. Farmers organized by NGOs on degraded marginal land showed a pattern of increasing profit and profit efficiency over time, after the transition period. On the other hand, farmers organized by a private sector firm on newly opened forest land exhibited a pattern of stable profit and increasing yields over time. The results showed that farmers under non-profit NGOs received the highest level of profit, followed by farmers under the private firm and finally the for-profit NGO. These findings suggest that while organic agriculture can increase the economic performance of small farmers, institutional arrangement is an important factor in realizing the broader benefits of organic agriculture for poverty reduction.