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Organic certification, agro-ecological practices and return on investment: Farm level evidence from Ghana

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  • Kleemann, Linda
  • Abdulai, Awudu

Abstract

The recent empirical literature on economic sustainability of certified export crops shows that certification standards that enhance yields are important for improving farm revenues and farmer welfare. However, limited evidence exists on the impact of organic certification on the adoption of agro-ecological practices. In this study, we use unique farm-level data from Ghana to examine the impact of organic certification on the use of agro-ecological practices to improve environmental conditions, as well as how using these measures affect farm outcomes such as return on investment. In the former, we utilize an endogenous switching regression approach to account for selection bias due to unobservable factors. Our empirical results reveal that organic certification increases agro-ecological practice use, although from a very low starting point. Using a generalized propensity score approach, we show that there is a nonlinear relationship between the intensity of agro-ecological practice use and return on investment.

Suggested Citation

  • Kleemann, Linda & Abdulai, Awudu, 2012. "Organic certification, agro-ecological practices and return on investment: Farm level evidence from Ghana," Kiel Working Papers 1816, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:1816
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    1. Victor Stolzenburg & Daria Taglioni & Deborah Winkler, 2019. "Economic upgrading through global value chain participation: which policies increase the value-added gains?," Chapters, in: Stefano Ponte & Gary Gereffi & Gale Raj-Reichert (ed.), Handbook on Global Value Chains, chapter 30, pages 483-505, Edward Elgar Publishing.

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    More about this item

    Keywords

    organic agriculture; certification; agro-ecological practices; return on investment; impact assessment;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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