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Pricing Organic Nitrogen Under The Weak Disposability Assumption: An Application to the French Pig Sector

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  • Isabelle Piot‐Lepetit
  • Dominique Vermersch

Abstract

The nonparametric approach Data Envelopment Analysis is used in order to measure individual technical inefficiency. Different models are evaluated using a 1991 FADN data set of French pig farms. Organic nitrogen is considered as a byproduct of animal breeding. Used as plant nutrient, organic manure becomes an input in crop production which is pollutant when excessive amounts enter surface and groundwater. In the latter case, the usual hypothesis of strong disposability of organic nitrogen is refuted because the elimination of pollution is costly. In this paper, we introduce a hypothesis of weak disposability of organic nitrogen and compare the technical efficiency measures obtained with and without this assumption. Then, using the duality between the restricted cost function and the input‐output distance function and following Färe and Primont (1995), we derive a shadow price of organic nitrogen which can be compared to the unit cost of different existing manure treatments.

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  • Isabelle Piot‐Lepetit & Dominique Vermersch, 1998. "Pricing Organic Nitrogen Under The Weak Disposability Assumption: An Application to the French Pig Sector," Journal of Agricultural Economics, Wiley Blackwell, vol. 49(1), pages 85-99, March.
    • Handle: RePEc:bla:jageco:v:49:y:1998:i:1:p:85-99
    DOI: 10.1111/j.1477-9552.1998.tb01253.x
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    1. Isabelle Piot-Lepetit & Dominique Vermersch & Robert Weaver, 1997. "Agriculture's environmental externalities: DEA evidence for French agriculture," Applied Economics, Taylor & Francis Journals, vol. 29(3), pages 331-338.
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    4. Fuss, Melvyn & McFadden, Daniel (ed.), 1978. "Production Economics: A Dual Approach to Theory and Applications," Elsevier Monographs, Elsevier, edition 1, number 9780444850133.
    5. Fuss, Melvyn & McFadden, Daniel, 1978. "Production Economics: A Dual Approach to Theory and Applications (I): The Theory of Production," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, volume 1, number fuss1978.
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    1. Timo Sipiläinen & Anni Huhtala, 2013. "Opportunity costs of providing crop diversity in organic and conventional farming: would targeted environmental policies make economic sense?," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 40(3), pages 441-462, July.
    2. Agata Malak-Rawlikowska & Monika Gębska & Robert Hoste & Christine Leeb & Claudio Montanari & Michael Wallace & Kees de Roest, 2021. "Developing a Methodology for Aggregated Assessment of the Economic Sustainability of Pig Farms," Energies, MDPI, vol. 14(6), pages 1-25, March.
    3. Zhou, Haibo & Yang, Yi & Chen, Yao & Zhu, Joe, 2018. "Data envelopment analysis application in sustainability: The origins, development and future directions," European Journal of Operational Research, Elsevier, vol. 264(1), pages 1-16.
    4. Adhikari, Murali & Paudel, Krishna P. & Martin, Neil R., Jr., 2002. "An Evaluation Of An Economic Strategy For Preventing Water Pollution Using A Phosphorus Consistent Transportation Model: A Case Of Broiler Litter Management," Agecon Series 31657, Louisiana State University, Department of Agricultural Economics and Agribusiness.
    5. Serra, Teresa & Chambers, Robert G. & Oude Lansink, Alfons, 2014. "Measuring technical and environmental efficiency in a state-contingent technology," European Journal of Operational Research, Elsevier, vol. 236(2), pages 706-717.
    6. Jan Christensen & Lars Hansen, 2005. "Abatement costs of alternative tax systems to regulate agricultural nitrogen loss," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 7(2), pages 53-74, June.
    7. Tamara Rudinskaya & Zdeňka Náglová, 2021. "Analysis of Consumption of Nitrogen Fertilisers and Environmental Efficiency in Crop Production of EU Countries," Sustainability, MDPI, vol. 13(16), pages 1-13, August.
    8. Andrés J. Picazo-Tadeo & Ernest Reig-Martínez, 2005. "Calculating shadow wages for family labour in agriculture : An analysis for Spanish citrus fruit farms," Cahiers d'Economie et Sociologie Rurales, INRA Department of Economics, vol. 75, pages 5-21.
    9. Lauwers, Ludwig, 2009. "Justifying the incorporation of the materials balance principle into frontier-based eco-efficiency models," Ecological Economics, Elsevier, vol. 68(6), pages 1605-1614, April.
    10. K. Hervé Dakpo & Yann Desjeux & Laure Latruffe, 2023. "Cost of abating excess nitrogen on wheat plots in France: An assessment with multi‐technology modelling," Journal of Agricultural Economics, Wiley Blackwell, vol. 74(3), pages 800-815, September.
    11. Van der Straeten, Bart & Buysse, Jeroen & Nolte, Stephan & Lauwers, Ludwig H. & Claeys, Dakerlia & Van Huylenbroeck, Guido, 2011. "Policy intervention in a concentration permit market: efficiency analysis of obligatory manure processing in Flanders," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114832, European Association of Agricultural Economists.
    12. Hadley, David, 1998. "Estimation Of Shadow Prices Of Undesirable Outputs: An Application To Uk Dairy Farms," 1998 Annual meeting, August 2-5, Salt Lake City, UT 20977, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    13. Robert G. Chambers & Teresa Serra, 2018. "The social dimension of firm performance: a data envelopment approach," Empirical Economics, Springer, vol. 54(1), pages 189-206, February.
    14. Parisa Aghajanzadeh-Darzi & Pierre-Alain Jayet & Athanasios Petsakos, 2017. "Improvement of a Bio-Economic Mathematical Programming Model in the Case of On-Farm Source Inputs and Outputs," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 15(3), pages 489-508, September.
    15. David Berre & Jonathan Vayssières & Jean-Philippe Boussemart & Hervé Leleu & Emmanuel Tillard & Philippe Lecomte, 2012. "Combining farm simulation with frontier efficiency analysis," Working Papers 2012-ECO-16, IESEG School of Management.
    16. Khataza, Robertson R.B. & Hailu, Atakelty & Kragt, Marit E. & Doole, Graeme, 2017. "The opportunity costs of enhancing legume‐based sustainable agricultural intensification practices in Malawi," 2017 Conference (61st), February 7-10, 2017, Brisbane, Australia 258672, Australian Agricultural and Resource Economics Society.
    17. Magambo, Isaiah & Dikgang, Johane & Gelo, Dambala & Tregenna, Fiona, 2021. "Environmental and Technical Efficiency in Large Gold Mines in Developing Countries," MPRA Paper 108068, University Library of Munich, Germany.
    18. Frederic Ang & Simon M. Mortimer & Francisco J. Areal & Richard Tiffin, 2018. "On the Opportunity Cost of Crop Diversification," Journal of Agricultural Economics, Wiley Blackwell, vol. 69(3), pages 794-814, September.
    19. Munksgaard, Jesper & Christoffersen, Line Block & Keiding, Hans & Pedersen, Ole Gravgard & Jensen, Trine S., 2007. "An environmental performance index for products reflecting damage costs," Ecological Economics, Elsevier, vol. 64(1), pages 119-130, October.
    20. Robertson R. B. Khataza & Atakelty Hailu & Marit E. Kragt & Graeme J. Doole, 2017. "Estimating shadow price for symbiotic nitrogen and technical efficiency for legume-based conservation agriculture in Malawi," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 61(3), pages 462-480, July.
    21. Isabelle Piot-Lepetit & M. Le Moing, 2005. "L'élevage laitier et l'environnement : quel impact sur le facteur travail ?," Post-Print hal-02290718, HAL.
    22. Paudel, Krishna P. & Limaye, Ashutosh S & Adhikari, Murali & Martin, Neil R., Jr., 2002. "An Application Of The Phosphorus Consistent Rule For Environmentally Acceptable Cost-Efficient Management Of Broiler Litter In Crop Production," Agecon Series 31658, Louisiana State University, Department of Agricultural Economics and Agribusiness.

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