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Emergence of Organic Farming under Imperfect Competition: Economic Conditions and Incentives

Jaeck, Mélanie; Lifran, Robert and Stahn, Hubert (2012) Emergence of Organic Farming under Imperfect Competition: Economic Conditions and Incentives. Working paper.

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Document available online at: https://halshs.archives-ouvertes.fr/hal-02805961


This article explores the economic conditions for the viability of organic farming in a context of imperfect competition. While most research dealing with this issue has adopted an empirical approach, we propose a theoretical foundation. Farmers have a choice between two technologies, the conventional one using two complementary inputs, chemicals and seeds, and the organic one only requiring organic seeds. The upstream markets are oligopolistic and the firms adopt Cournot behavior. The game is solved backward. The equilibrium repartition of the farmers between both sectors is obtained by a free entry condition. Since multiple equilibria could exist, including the non emergence of organic farming, we spell out viability conditions for organic farming. Then, using an "infant industry" argument, we propose several public policy instruments able to support the development of organic farming, and assess their relative efficiency. Results could be useful to assess the conditions of emergence and viability of agricultural innovations in analogous contexts.

EPrint Type:Working paper
Keywords:technological choice (en), imperfect competition (en), organic farming (en), agricultural inputs (en), free entry (en), policy design (en)
Subjects:"Organics" in general
Research affiliation: France > INRAe - Institut national de recherche pour l’agriculture, l’alimentation et l’environnement
Related Links:https://halshs.archives-ouvertes.fr/hal-02805961v2/document
Project ID:HAL-INRAe
Deposited By: PENVERN, Servane
ID Code:41752
Deposited On:12 Aug 2021 10:37
Last Modified:12 Aug 2021 10:37
Document Language:English

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