Comparative Analysis of Organic Farming in the EU: Implications for Crop Protection Costs, Labour, and Income

The European Union (EU) aims to increase the adoption of organic farming as part of its Farm to Fork Strategy. However, farmers face various adoption hurdles, such as the efficacy of crop protection, as well as implications for crop yields, costs, labour and ultimately farm income. Yet, we currently lack comprehensive large-scale empirical evidence on the economics of organic farming in the EU. Therefore, this study assesses the economic performance of organic farming in the EU using a large-scale cross-country dataset. It consists of an unbalanced panel of 151,560 non-organic and 10,531 organic farms from the European Farm Accountancy Data Network, covering seven different farm types and 16 EU countries. Our analysis specifically focuses on crop protection expenditures, total crop specific costs, as well as labour and gross farm income on a per hectare basis. We find that organic farming adoption significantly reduces crop protection expenditures as well as total crop specific costs across all farming types. Differences in farm-level labour inputs between organic and non-organic farms turned out to be only minor. Farm income is smaller for organic farms without subsidies but higher when accounting for subsidies. However, all effects are highly heterogeneous across farm types and across space. Our study contributes to a better understanding of the economic implications of organic farming within the EU. These insights can inform both practitioners and policy decision-makers and facilitate the achievement of regional organic farming targets.