Organic and Conventional Farming: a Comparison Analysis through the Italian FADN

Cisilino, Federica and Madau, Fabio A. (2007): Organic and Conventional Farming: a Comparison Analysis through the Italian FADN. Published in: Proceedings of the I Mediterranean Conference of Agro-Food Social Scientists. 103rd EAAE Seminar ‘Adding Value to the Agro-Food Supply Chain in the Future Euromediterranean Space’. Barcelona, Spain, April 23rd - 25th, 2007 (CD-ROM) : pp. 1-22.

Abstract

This paper shows some results arisen from a wider research on economic and environmental sustainability of organic farming. It focuses on organic and conventional farming comparison through an investigation of Italian FADN data. In order to identify some of the main differences between organic and conventional farms a “distance analysis” has been carried out. The study aims to highlight some of the main characteristics of those two groups of farms to better address differences (if any) in production technology, costs and revenues. Furthermore it shows the findings of a non-parametric efficiency analysis on the Italian olive-growing farms. The purpose is to estimate difference in efficiency and productivity between organic and conventional olive producers. Results reveal that looking at the average values on Invested Areas, conventional farms’ Gross Production is significantly higher than the organic ones, as the Net Margin, as the Net Product and Costs. The average values on Total Labour Force instead, shown that, even if conventional farms still have higher values than organic ones, the “distance” become shorter. That means that the two groups are quite similar and that, even if organic farms still produce a lower “economic value”, they better compensate productive factors, especially in terms of Labour Force. Regards to efficiency analysis, we found that organic olive-growing farms are more able in using their disposable resources (with reference to their own frontier), and the higher efficiency permits them to compensate the lower productivity with respect to the conventional farms.

• Item Type: MPRA Paper
• Language: English
• Keywords: FADN Sampling Organic Farming Distance Efficiency Analysis
• Subjects: Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture > Q12 - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

References

Atkinson, S.E., Cornwell, C. (1994). Estimation of Output and Input Technical Efficiency Using a Flexible Functional Form and Panel Data, International Economic Review 35: 245-255. Banker R.D., Charnes A., Cooper, W.W. (1984). Some Models for Estimating Technical and Scale Inefficiency in Data Envelopment Analysis, Management Science 30: 1078-1092. Battese G. (1992). Frontier Production Functions and Technical Efficiency: A Survey of Empirical Applications, Agricultural Economics 7: 185-208 Bauer, P.W. (1990). Recent Developments in Econometric Estimation of Frontiers, Journal of Econometrics 46: 39-56. Carillo F., Doria P., Marino D., Scardera A. (2005). Struttura e risultati economici delle aziende biologiche: un’analisi tipologica attraverso l’utilizzo della banca dati RICA, INEA, Roma. Charnes A., Cooper W.W., Rhodes E. (1978). Measuring the Efficiency of Decision Making Units, European Journal of Operational Research, Vol. 2: 429-444 Charnes A., Cooper W.W., Seiford L.M. (1994), Data Envelopment Analysis: Theory, Methodology and Application, Dordrecht, Boston e Londra, Kluwer Academics. Cichitelli G., Herzel A., Montanari G. E. (1992). Il campionamento statistico, Il Mulino, Bologna. Cisilino F. (2003). L’analisi della rappresentatività del campione RICA nel periodo 1990-2000 in INEA. Analisi comparativa delle fonti statistiche e ricognizione delle procedure di rilevazione delle statistiche agricole, Rapporto RICA, INEA, Regione Veneto. Cisilino F. (2005) La rappresentatività dei dati campionari: criteri e metodi di in INEA. La rete contabile agricola nazionale RICA: da rete di assistenza tecnica a fonte statistica, Quaderni “I metodi Rica” WP INEA, Roma. Cisilino F. (2005). Il campione RICA probabilistico: che cosa è cambiato nel 2003 in INEA. La rete contabile agricola nazionale RICA: da rete di assistenza tecnica a fonte statistica, Quaderni “I metodi Rica” WP INEA, Roma. Coelli T. (1996). A Guide to DEAP Version 2.1: A Data Envelopment Analysis (Computer) Program, CEPA Working Paper 96/8, Armidale, University of New England. Doria P., Scardera A. (2005). The FADN and the Analysis of Organic Farming: the Italian Perspective, in Towards a European Framework for Organic Market Information. Proceedings of the Second EISfOM European Seminar, Brussels, November 10 & 11, 2005. Research Institute of Organic Agriculture FiBL, Frick, Switzerland. http://orgprints.org Färe, R., Lovell, C.A.K. (1978). Measuring the Technical Efficiency of Production. Journal of Economic Theory 19: 150-162. Farrell M.J. (1957). The Measurement of Productive Efficiency, Journal of the Royal Statistical Society, A 120 part 3: 253-290. Førsund F.R., Lovell C.A.K., Schmidt P. (1980). A Survey of Frontier Production Functions and of their Relationship to Efficiency Measurement, Journal of Econometrics 13: 5-25. Greene W.H. (1980). On the Estimation of a Flexible Frontier Production Model, Journal of Econometrics, 13: 101- 115. Hamm U., Zanoli R. (2006) The need for a long-term strategy for data collection on organic markets. Paper presented at Joint Organic Congress, Odense, Denmark, May 30-31, 2006. Herrero I. (2000). DEA: A Review of Some of the Main Papers. In Pascoe S., Fousakis P., Herrero I., Juliussen V., Mardle S., Roland B.E., Vassdal T. (eds.). Technical Efficiency in EU Fisheries: Methodological Report. TEMEC Working Paper I, University of Portsmouth. Idda L., Furesi R., Madau F.A., Rubino C. (2004). L’olivicoltura in Sardegna. Aspetti economici e prospettive alla luce di un’analisi aziendale. Quaderni di Economia e Politica Agraria n. 2 della Sezione di Economia e Politica Agraria (Università di Sassari), Sassari, Tipografia Editrice Giovanni Gallizzi. IOO (2006): http://www.internationaloliveoil.org/economics2.asp (December 21, 2006) Lampkin N. (2005). EISFOM recommendations concerning farm financial data in Towards a European Framework for Organic Market Information. Proceedings of the Second EISfOM European Seminar, Brussels, November 10 & 11, 2005. Research Institute of Organic Agriculture FiBL, Frick, Switzerland. 19 Lampkin N.H. (1994). Researching Organic Farming Systems., in Lampkin N.H., Padel S. (a cura di). The Economics of Organic Farming. An International Perspective. Wallingford: CAB International. Lee H., Fowler S. (2002). A critique of methodologies for the comparison of organic and conventional farming systems in Powell et al. (eds), UK Organic Research 2002: Proceedings of the COR Conference, 26-28 March 2002, Aberystwyth, pp. 281-284. Madau F.A. (2006). Technical Efficiency in Organic Farming: Evidence from Italian Cereal Farms, Agricultural Economics Review 7 (forthcoming) Marino D., Scardera A. (1998). Struttura e risultati economici delle aziende biologiche della RICA, in Santucci F.M. (editor). L’agricoltura biologica tra PAC e mercato, Quaderni dell’Istituto di Economia Politica Agraria di Perugina, n. 25, Perugina. Meier B. (2005). Organic Sampling and Weighting in Farm Accountancy Data Networks – a discussion note on Standard Gross Margins and calibration in Towards a European Framework for Organic Market Information. Proceedings of the Second EISfOM European Seminar, Brussels, November 10 & 11, 2005. Research Institute of Organic Agriculture FiBL, Frick, Switzerland. MIPAF (2006). http://www.politicheagricole.it/ProdottiQualita/ProdottiBiologici/default.htm Nelson R.R., Winter S.G. (1982). The Schumpterian Trade-off Revisited. American Economic Review 72: 114-132. Nieberg H., Offermann F. (2003) Economic aspects of Organic Farming – The Profitability of Organic Farming in Europe in OECD (eds.) Organic Agrculture: Sustainability, Markets and Policies: 141-151, Offermann F. (2004). Comparing organic and conventional farm incomes in FADN – Issues in international harmonisation and quality assurance, Proceedings 1st EISFOM Seminar 26-27 April 2004, Berlin. Offermann F., Lampkin N. (2005) Organic Farming in FADNs – Comparison Issues and Analysis, in Towards a European Framework for Organic Market Information. Proceedings of the Second EISfOM European Seminar, Brussels, November 10 & 11, 2005. Research Institute of Organic Agriculture FiBL, Frick, Switzerland. Offermann F., Nieberg H. (a cura di) (2000). Economic Performance of Organic Farms in Europe. Organic Farming in Europe. Economics and Policy, Volume 5. Hohenheim, Universität Hohenheim. Oude Lansink A., Pietola K., Backman S. (2002). Efficiency and Productivity of Conventional and Organic Farms in Finland 1994-1997, European Review of Agricultural Economics 29: 51-65. Pascoe, S., Fousakis, P., Herrero, I., Juliussen, V., Mardle, S., Roland, B.E., Vassdal, T. (eds.). Technical Efficiency in EU Fisheries: Methodological Report, TEMEC Working Paper I, University of Portsmouth. Pietola K.S., Oude Lansink A. (2001). Farmer Response to Policies Promoting Organic Farming Technologies in Finland. European Review of Agricultural Economics 28: 1-15. Recke G.; Willer H.; Lampkin N., Vaughan A. (2004). Development of a European Information System for Organic Markets - Improving the Scope and Quality of Statistical Data. Proceedings of the 1st EISfOM European Seminar, held in Berlin, Germany, 26-27 April, 2004. FiBL-Report. Research Institute of Organic Agriculture (FiBL), CHFrick. http://orgprints.org Richter T. (2006). The need for a European harmonised data collection on private organic consumption – methodological and economic issues. Paper presented at Joint Organic Congress, Odense, Denmark, May 30-31, 2006. http://orgprints.org Rippin M.; Vitulano S., Zanoli R., Lampkin N. (2006). Synthesis and final recommendations on the development of a European Information System for Organic Markets, Deliverable D6 of the European Project EISfOM QLK5-2002- 02400. Report, Institute of Rural Sciences, University of Wales. http://orgprints.org Rippin M.; Willer H.; Lampkin N., Vaughan A. (2006). Towards a European Framework for Organic Market Information. Proceedings of the Second EISfOM European Seminar, Brussels, November 10 & 11, 2005. Research Institute of Organic Agriculture FiBL, Frick, Switzerland Eds. http://orgprints.org Roland B.E., Vassdal T. (2000): Estimation of Technical Efficiency using DEA, in Pascoe S., Fousakis P., Herrero I., Juliussen V., Mardle S., Roland B.E., Vassdal T. (a cura di): Technical Efficiency in EU Fisheries: Methodological Report, TEMEC Working Paper I, University of Portsmouth. Scardera A., Trione S. (2003). Struttura e risultati economici delle aziende biologiche con allevamento – analisi della banca dati 2000, WP n.1, Research Project La zootecnia biologica in Italia: situazioni attuali e prospettive. Tipologie d’imprese, trasformaizioni necessarie e possibili, incentivi pubblici e di mercato, domanda di ricerca, Ministero delle Politiche Agricole e Forestali, Roma. 20 Scardera A., Zanoli R. (eds.) (2002). L’agricoltura biologica in Italia, Metodologie di analisi e risultati dell’utilizzo dei dati RICA”, INEA, Quaderni “I metodi RICA”, Roma. Seiford L.M (1996). Data Envelopment Analysis: The Evolution of the State of the Art (1978-1995). Journal of Productivity Analysis 7: 99-138. Seiford L.M., Thrall R.M. (1990). Recent Developments in DEA. Journal of Econometrics 46: 7-38. Sharma K.R. - Leung P. - Zaleski H. (1999). Technical, Allocative and Economic Efficiency in Swine Production in Hawaii: a Comparison of Parametric and Non Parametric Approaches. Agricultural Economics, 20: 23-35. Tzouvelekas V., Pantzios C.J., Fotopoulos C. (2001a). Technical Efficiency of Alternative Farming Systems: the Case of Greek Organic and Conventional Olive-growing Farms, Food Policy 26: 549-569. Tzouvelekas V., Pantzios C.J., Fotopoulos C. (2001b). Economic Efficiency in Organic Farming: Evidence From Cotton Farms in Viotia, Greece, Journal of Agricultural & Applied Economics 33: 35-48. Tzouvelekas V., Pantzios C.J., Fotopoulos C. (2002a). Measuring Multiple and Single Factor Technical Efficiency in Organic Farming, British Food Journal 104: 591-609. Tzouvelekas V., Pantzios C.J., Fotopoulos C. (2002b). Empirical Evidence of Technical Efficiency Levels in Greek Organic and Conventional Farms, Agricultural Economics Review 3: 49-60. Vrolijk H. C. J. (2005). Sampling of organic farms in the Dutch FADN: Lessons learned in Towards a European Framework for Organic Market Information. Proceedings of the Second EISfOM European Seminar, Brussels, November 10 & 11, 2005. Research Institute of Organic Agriculture FiBL, Frick, Switzerland.