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Economics and Efficiency of Organic Farming vis-à-vis Conventional Farming in India

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  • Charyulu Kumara D.
  • Biswas, Subho

Abstract

Organic farming systems have attracted increasing attention over the last one decade because they are perceived to offer some solutions to the problems currently besetting the agricultural sector. Organic farming has the potential to provide benefits in terms of environmental protection, conservation of non-renewable resources and improved food quality. India is bestowed with lot of potential to produce all varieties of organic products due to its diverse agro-climatic regions. In several parts of the country, the inherited tradition of organic farming is an added advantage. This holds promise for the organic producers to tap the market which is growing steadily in the domestic market related to the export market. In India, the land under certification is around 2.8 million ha. But, there is considerable latent interest among farmers in conversion to organic farming. However, some farmers are reluctant to convert because of the perceived high costs and risks involved in organic farming. Despite the attention which has been paid to organic farming over the last few years, very little accessible information actually exists on the costs and returns of organic farming in India. The empirical evidences of efficiency analysis of organic and conventional farming systems are scarce or even absent. So, the present paper focuses mainly on the issues like economics and efficiency of organic farming vis-à-vis conventional farming in India. Four states namely Gujarat, Maharashtra, Punjab and U.P were purposively selected for the present study. Similarly, four major crops i.e., cotton, sugarcane, paddy and wheat were chosen for comparison. A model based non-parametric Data Envelopment Analysis (DEA) was used for analyzing the efficiency of the farming systems. The crop economics results showed a mixed response. Overall, it is concluded that the unit cost of production is lower in organic farming in case of cotton and sugarcane crops where as the same is lower in conventional farming for paddy and wheat crops. The DEA efficiency analysis conducted on different crops indicated that the efficiency levels are lower in organic farming when compared to conventional farming, relative to their production frontiers. The results conclude that there is ample scope for increasing the efficiency under organic farms.

Suggested Citation

  • Charyulu Kumara D. & Biswas, Subho, 2010. "Economics and Efficiency of Organic Farming vis-à-vis Conventional Farming in India," IIMA Working Papers WP2010-04-03, Indian Institute of Management Ahmedabad, Research and Publication Department.
    • Handle: RePEc:iim:iimawp:9885
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    References listed on IDEAS

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    1. Charyulu, D. Kumara, 2010. "Technical, Allocative and Economic Efficiency of Organic Input Units in India," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 65(4), pages 1-17.
    2. Tzouvelekas, Vangelis & Pantzios, Christos J. & Fotopoulos, Christos, 2001. "Economic Efficiency in Organic Farming: Evidence from Cotton Farms in Viotia, Greece," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 33(1), pages 35-48, April.
    3. Larsen, Karin & Foster, Kenneth A., 2005. "Technical Efficiency among Organic and Conventional Farms in Sweden 2000-2002: A Counterfactual and Self-Selection Analysis," 2005 Annual meeting, July 24-27, Providence, RI 19219, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Madau, Fabio A., 2005. "Technical Efficiency in Organic Farming: An Application on Italian Cereal Farms Using a Parametric Approach," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24545, European Association of Agricultural Economists.
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    6. Funtanilla, Margil & Lyford, Conrad P. & Wang, Chenggang, 2009. "An Evaluation of the Organic Cotton Marketing Opportunity," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49359, Agricultural and Applied Economics Association.
    7. Charyulu Kumara D. & Biswas, Subho, 2010. "Efficiency of Organic Input Units under NPOF Scheme in India," IIMA Working Papers WP2010-04-01, Indian Institute of Management Ahmedabad, Research and Publication Department.
    8. D. Kumara Charyulu & Subho Biswas, 2010. "Efficiency of Organic Input Units under NPOF Scheme in India," Working Papers id:2641, eSocialSciences.
    9. Carlos D. Mayen & Joseph V. Balagtas & Corinne E. Alexander, 2010. "Technology Adoption and Technical Efficiency: Organic and Conventional Dairy Farms in the United States," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(1), pages 181-195.
    10. Tzouvelekas, Vangelis & Pantzios, Christos J. & Fotopoulos, Christos, 2001. "Technical efficiency of alternative farming systems: the case of Greek organic and conventional olive-growing farms," Food Policy, Elsevier, vol. 26(6), pages 549-569, December.
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    Cited by:

    1. Djokoto, Justice G., 2015. "Technical efficiency of organic agriculture: a quantitative review," Studies in Agricultural Economics, Research Institute for Agricultural Economics, vol. 117(2), pages 1-11, August.
    2. Singh, S.P. & Sajwan, Priya & Sajwan, Komal, 2023. "Technical Efficiency in Organic and Conventional Wheat Farms: Evidence from a Primary Survey from Two Districts of Ganga River Basin, India," 97th Annual Conference, March 27-29, 2023, Warwick University, Coventry, UK 334558, Agricultural Economics Society - AES.
    3. Jan Buczek & Marta Jańczak-Pieniążek & Elżbieta Harasim & Cezary A. Kwiatkowski & Ireneusz Kapusta, 2023. "Effect of Cropping Systems and Environment on Phenolic Acid Profiles and Yielding of Hybrid Winter Wheat Genotypes," Agriculture, MDPI, vol. 13(4), pages 1-21, April.
    4. Karthikeyan Mariappan & Deyi Zhou, 2019. "A Threat of Farmers’ Suicide and the Opportunity in Organic Farming for Sustainable Agricultural Development in India," Sustainability, MDPI, vol. 11(8), pages 1-17, April.

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