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Does organic certification make economic sense for dairy farmers in Europe?–A latent class counterfactual analysis

Grovermann, Christian; Quiédeville, Sylvain; Müller, Adrian; Leiber, Florian; Stolze, Matthias and Moakes, Simon (2021) Does organic certification make economic sense for dairy farmers in Europe?–A latent class counterfactual analysis. Agricultural Economics, 52, pp. 1001-1012.

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Document available online at: https://onlinelibrary.wiley.com/doi/pdf/10.1111/agec.12662


Summary

Certification in agriculture ensures compliance with tangible standards and should generate economic opportunities for farmers. This study quantifies the variable profit and efficiency impacts of organic certification in dairy farming across Europe, using farm-level FADN data from 25 countries while accounting for heterogeneity through a class splitting model. Four distinct classes with dairy farm enterprises operating under similar production conditions were identified in order to assess gross margin and efficiency differences among certified and non-certified farms. Depending on the nature of the selection bias, treatment effects were estimated either through an endogenous treatment modelor through entropy balancing. The results suggest that organic certification increases gross margins for dairy farm enterprises in Europe, while slightly increasing technical efficiency in two out of four classes. These significant effects of certification on efficiency were estimated at 2% and 7%,respectively. As regards variable profit, effects range from to 66 Euros per cow to 234 euros per cow. Inrelative terms, this implies gains between 38% and 50% for farms classified intomore cool or temperate zones and a gain of up to 182% for the farms assigned tothe class that designates warmer climatic conditions.


EPrint Type:Journal paper
Keywords:efficiency, endogenous treatment model, gross margins, stochastic frontier, GenTORE, Abacus, FiBL5008101
Agrovoc keywords:
Language
Value
URI
English
efficiency
http://aims.fao.org/aos/agrovoc/c_2491
English
dairy farms
http://aims.fao.org/aos/agrovoc/c_34762
Subjects: Animal husbandry > Production systems > Dairy cattle
Values, standards and certification
Food systems > Policy environments and social economy
Research affiliation: Switzerland > FiBL - Research Institute of Organic Agriculture Switzerland > Society > Agri-food policy
Switzerland > FiBL - Research Institute of Organic Agriculture Switzerland > Animal > Animal welfare & housing
Switzerland > FiBL - Research Institute of Organic Agriculture Switzerland > Animal > Cattle
Switzerland > FiBL - Research Institute of Organic Agriculture Switzerland > Quality assurance > Certification
H2020 or FP7 Grant Agreement Number:727213
DOI:DOI: 10.1111/agec.12662
Related Links:https://www.fibl.org/en/themes/projectdatabase/projectitem/project/1326, https://www.gentore.eu/
Deposited By: Forschungsinstitut für biologischen Landbau, FiBL
ID Code:42418
Deposited On:21 Sep 2021 12:46
Last Modified:10 Jan 2022 16:32
Document Language:English
Status:Published
Refereed:Peer-reviewed and accepted

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