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Organic farmers or conventional farmers: Where's the money?

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  • Uematsu, Hiroki
  • Mishra, Ashok K.

Abstract

There is growing evidence that organic farming is a rapidly expanding economic sector in the U.S. However, an unanswered question is whether organic farmers are better off than conventional farmers when it comes to farm household income. Using large farm-level data and a matching estimator, this study explores the relationship between organic certification and farm household income with its various components. Contrary to expectations, certified organic farmers do not earn significantly higher household income than conventional farmers. Though certified organic crop producers earn higher revenue, they incur higher production expenses as well. In particular, certified organic producers spend significantly more on labor, insurance, and marketing charges than conventional farmers. The results suggest that the lack of economic incentives can be an important barrier to conversion to organic farming.

Suggested Citation

  • Uematsu, Hiroki & Mishra, Ashok K., 2012. "Organic farmers or conventional farmers: Where's the money?," Ecological Economics, Elsevier, vol. 78(C), pages 55-62.
    • Handle: RePEc:eee:ecolec:v:78:y:2012:i:c:p:55-62
    DOI: 10.1016/j.ecolecon.2012.03.013
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    More about this item

    Keywords

    Organic farming; Propensity score matching; Average treatment effect; Nearest neighbor matching; Farm household income; Farm revenue;
    All these keywords.

    JEL classification:

    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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