Volume 79, September 2016, Pages 100–106
- a Business Economics Group, Wageningen University, Hollandseweg 1, 6706 KN, Wageningen, The Netherlands
- b Agricultural Economics Research Institute, Wageningen University and Research Centre, Hollandseweg 1, 6706 KN, Wageningen, The Netherlands
- Received 10 December 2015, Revised 27 May 2016, Accepted 6 June 2016, Available online 18 June 2016
Highlights
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- Risk in conventional and organic arable farming is assessed and compared.
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- Analysis is based on 2002–2011 data from 196 conventional and 29 organic arable farms.
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- Risk assessment is done using an error component implicit detrending method.
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- Family farm income risk is significantly higher in organic farming.
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- Crop level variables that show higher risks are crop prices and variable input costs.
Abstract
This
paper assesses and compares risk in conventional and organic arable
farming in The Netherlands with respect to family farm income and
underlying price and production variables. To investigate the risk
factors the farm accountancy data network was used containing unbalanced
panel data from 196 conventional and 29 organic representative Dutch
arable farms (for the period 2002 up to and including 2011). Variables
with regard to price and production risk were identified using a family
farm income analysis scheme. Price risk variables are input and output
prices, while yield volatility of different crops is the main production
risk variable. To assess risk, an error components implicit detrending
method was applied and the resulting detrended standard deviations were
compared between conventional and organic farms. Results indicate that
the risk at the level of family farm income is higher in organic
farming. The underlying variables show higher risk for organic farms in
crop yields, crop prices and variable input costs per crop.
Keywords
- Arable farming;
- Organic farming;
- Risk assessment;
- Error component implicit detrending method
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