EFFICIENCY ANALYSIS OF ORGANIC FARMING SYSTEMS AN OVERVIEW ON JOINT TOPICS, RESULTS AND CONCLUSIONS...
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EFFICIENCY ANALYSIS OF ORGANIC FARMING SYSTEMSAN OVERVIEW ON JOINT TOPICS, RESULTS AND CONCLUSIONS
Presentation at the
Vadym Hetman Kyiv National economic University
Sebastian Lakner & Stephan von Cramon-TaubadelNovember 11, 2011
Outline
1. Introduction: Organic Farming in Germany
2. Methods
3. Overview on empirical results
3.1 Studies focussing on organic farming
3.2 Comparative studies
3.3 Joint topics and results, shortcomings
4. Summary and Conclusions
November 11, 2011 Efficiency of organic farms - Lakner & von Cramon-Taubadel Slide No.: 2
1. Introduction: Organic Associations and the state
November 11, 2011 Efficiency of organic farms - Lakner & von Cramon-Taubadel Slide No.: 3
Farmers Associations for organic farming
Government-Signs for organic farming
Germany European Union
1. Introduction: Wheat prices
- €
100.00 €
200.00 €
300.00 €
400.00 €
500.00 €
600.00 €
Soft Wheat conventional
Soft Wheat Organic
November 11, 2011 Efficiency of organic farms - Lakner & von Cramon-Taubadel Slide No.: 4
Figure 2: Producer Prices of Conv. and Organic Soft WheatSources: ZMP [a]; ZMP [b]; ZMP [c]; AMI (2010a, 2010b, 2011a, 2011b).
Efficiency of organic farms - Lakner & von Cramon-Taubadel
1. Introduction: Grain Yields (dt/ha)
19861987
19881989
19901991
19921993
19941995
19961997
19981999
20002001
20022003
20042005
20062007
20082009
-
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
Yield organic Wheat (dt/ha) Moving average (Yield organic Wheat (dt/ha))
Yield conv. Wheat (dt/ha) Moving average (Yield conv. Wheat (dt/ha))
November 11, 2011 Slide No.: 5
Figure 5: Wheat-Yields in Organic and Conv. Farms in GermanySource: own calculation, data from the Federal Ministry of Food, Agriculture and Consumer Protection
B
technology
2. Methods: Data Envelopement Analysis
November 11, 2011 Efficiency of organic farms - Lakner & von Cramon-Taubadel
Figure 7: Production function and production frontierSource: Cantner et al. 2007: p.5
C
Output
Input
Output-orientedInput-
oriented
Slide No.: 6
2. Methods: Stochastic Frontier Analysis
November 11, 2011 Efficiency of organic farms - Lakner & von Cramon-Taubadel Slide No.: 7
Stochastic Production Frontiery = f (x; beta) * exp{v-u}
Stochastic-term: exp {v}
maximal feasible output
Inefficiency-term: exp{- u}
Input
Observed farm n
Output
Figure 8: The Stochastic and inefficiency term in the modelSource: Own elaboration according to COELLI et al. 2005: p. 244
3.1 Studies focussing on organic farming
• Labour’s impact on organic farms
• Arable farms > mixed farms > grassland farms
• The scale level is not always optimal
• Optimal specialization
• Regional distribution
• Efficiency during the period of conversion
• The organic subsidy has a negative impact on efficiency
November 11, 2011 Efficiency of organic farms - Lakner & von Cramon-Taubadel Slide No.: 8
Figure 9: Technical efficiency in 15 regional cluster of organic farmingSource: own calculations
November 11, 2011 Slide No.: 9
3.2 Comparative studies
• Organic farming is less productive,
• Mixed evidence with efficiency
• Often separate estimation in DEA
• The choice of farm-system?
November 11, 2011 Efficiency of organic farms - Lakner & von Cramon-Taubadel Slide No.: 10
3.3 Joint topics and results, shortcomings
• Environmental objectives of organic farming
• Farm-structure of organic vs. conventional- Sample-selection techniques
(the Heckman model)
- Matching techniques
• Balance of observation in the data-set
• Optimal level of specialization
• Methodological issues
November 11, 2011 Efficiency of organic farms - Lakner & von Cramon-Taubadel Slide No.: 11
Environmental objectives of organic farming
November 11, 2011 Efficiency of organic farms - Lakner & von Cramon-Taubadel Slide No.: 12
0.40 0.45 0.50 0.55 0.60 0.65 0.70 0.75 0.800.40
0.45
0.50
0.55
0.60
0.65
0.70
0.75
0.80
0.85
Organic farming
Reduced extensi-fication of grass-land use
Enlarged extensi-fication of grass-land use
Diversification of arable land use
No Participation
Environmental Efficiency
Var
iab
le r
etu
rns
to s
cale
Eff
icie
ncy
Figure 12: Technical and Environmental Efficiency in BavariaSource: own elaboration based on the results of Kantelhardt et al. 2009
4. Summary and Conclusions
• Organic farming is less productive
• Mixed evidence with efficiency
• Sampling issues- Balance in the sample
- Structural issues
• Little discussion on topics specific to organic- Conversion to organic farming
- Environmental efficiency
- Little data on economic and environmental variables
November 11, 2011 Efficiency of organic farms - Lakner & von Cramon-Taubadel Slide No.: 13
Thank you for your attention!
GEORG-AUGUST UNIVERSITÄT GÖTTINGEN
1920s – 1930s
1. Introduction: History of organic farming
November 11, 2011 Efficiency of organic farms - Lakner & von Cramon-Taubadel Slide No.: 15
1990s – 2000s
1980s
‚Natural farming‘
Ecological Farming
AGÖL, BÖLW
East-Germany ?
GäaBioland,
Naturland EU-Bio
1950s - 1970s
‘Organic-biological farming’
Müller & Rusch
‚biological farming‘
Source: own elaboration, see also Vogt 2000, p.19
‘Bio-dynamic farming’
Demeter
Rudolf Steiner 1924
Retailing in the organic market
November 11, 2011 Efficiency of organic farms - Lakner & von Cramon-Taubadel Slide No.: 16
1997 2000 2001 2002 2003 2004 2005 2006 2007 2008 20090%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
7 5 4 6 6 7 8 7 6 6 7
28 33 35 35 35 3741
49 53 57 56
31 28 27 26 26 2625
2322
22 2210 10 9 9 8 8
65 4
3 3
5 7 7 7 7 7 65 5
4 419 17 17 17 17 16 14 11 10 8 7
Producer direct-marketing1 Bakery, Butcher's ShopHealth Food Shop (Reformhäuser) Organic Food StoresSupermarkets & Discounter2 Others3
Figure 10: Shares of sales channels in the German market for organic foodSource: Authors’ elaboration, data from IÖW (2007), RIPPIN and HAMM (2007), AMI (2011)1: Farmers on weekly markets and farm-shops; including delivery-services from farmers. 2: Including Special Fruit and Vegetable stores.3: Including drugstores, petrol-stations and other delivery services.
Farm-sizes in of German Farms
November 11, 2011 Efficiency of organic farms - Lakner & von Cramon-Taubadel Slide No.: 17
November 11, 2011 Efficiency of organic farms - Lakner & von Cramon-Taubadel
Figure 4: Regional concentration of organic farms in Germany in 2007Source: Regional Database 2007 and 2005 from the German Federal Statistical Office (DESTATIS 2006)
18
The organic market worldwide• The world of organic farming in 2007: share of land
November 11, 2011 Efficiency of organic farms - Lakner & von Cramon-Taubadel Slide No.: 19
Table 1: Premium for organic grassland-farming in Germany Status August 2009 Programm ländl. Entwicklung ELER-Verordnung
VO (EG) Nr. 1257/1999 (VO (EG) Nr. 1698/2005) Umstellung Beibehaltung Umstellung Beibehaltung Differenz
Berlin 153 € 102 € 131 € 128%
Brandenburg 180 € / 130 € 130 € 131 € 101%
Baden-Württemberg 130 € 130 € 150 € 115%
Bayern 255 € 255 € 190 € 190 € 75%
Bremen 285 € / 160 € 160 € 137 € 86%
Hessen 190 € 190 € 160 € 84%
Hamburg 153 € 160 € 137 € 86%
Mc-Pomm 210 € 160 € 135 € 84%
Niedersachsen 285 € / 160 € 160 € 137 € 86%
Nordrhein-Westfalen 409 € / 204 € 153 € 262 € 137 € 90%
Rheinland-Pfalz 205 € / 153 € 120 € 120 € 100%
Schleswig-Holstein 285 € / 160 € 160 € 137 € 86%
Saarland 210 € 160 € 262 € 116 € 73%
Sachsen 244 € 244 € 262 € 137 € 56%
Sachsen-Anhalt 252 € 192 € 252 € 192 € 100%
Thüringen 230 € 205 € 187 € 160 € 78%
Germany 210 € 160 € 262 € 137 € 86%
November 11, 2011 Efficiency of organic farms - Lakner & von Cramon-Taubadel
150 € 94%
300 € 210 € 82 %
Qu
elle
: E
igen
e R
eche
rche
, Nie
berg
& K
uhne
rt 2
006
270 € 170 € 106 %
324 € 14204 € 84%
Slide No .20
technology
2. Methods: Efficiency Analysis
Figure 6: Production function and production frontierSource: Cantner et al. 2007: p.5
November 11, 2011
Efficiency of organic farms - Lakner & von Cramon-Taubadel
Production-“frontier“„Best practice“
Production function„actual practice“
B
C„Optimal practice“
Output
Input
Slide No.: 21
Used model approaches
November 11, 2011 Efficiency of organic farms - Lakner & von Cramon-Taubadel Slide No.: 22
0
1
2
3
4
5
6
7
8
98
5
1 1 1
Number of papers
Number of papers
November 11, 2011 Efficiency of organic farms - Lakner & von Cramon-Taubadel Folie Nr. 23 von 30
Figure 10: Technical efficiency of organic farms during and after the conversion periodSource: own calculations
Efficiency of organic farms - Lakner & von Cramon-Taubadel
Figure 5: Milk-Yields in Organic and Conventional Farms in GermanySource: own calculation, data from the Federal Ministry of Food, Agriculture and Consumer Protection
1. Introduction: Milk-Yields on organic farms
November 11, 2011 Slide No .24