Economic Impact of Organic Agriculture: Evidence from a Pan-India Survey

A Reddy, Indrek Melts, Geetha Mohan, Ch Radhika Rani, Vaishnavi Pawar, Vikas Singh, Manesh Choubey, Trupti Vashishtha, A Suresh and Madhusudan Bhattarai
Additional contact information
Indrek Melts: Institute of Agricultural and Environmental Sciences, Estonian University of Life Sciences, 51006 Tartu, Estonia
Geetha Mohan: Center for Far Eastern Studies (CFES), University of Toyama, Toyama 930-0885, Japan
Ch Radhika Rani: National Institute of Rural Development & Panchayat Raj (NIRD&PR), Hyderabad 500030, India
Vaishnavi Pawar: School of Oriental and African Studies, University of London, London WC1H 0XG, UK
Vikas Singh: Institute of Economic Growth (IEG), Delhi 110007, India
Manesh Choubey: School of Social Sciences, Sikkim University, Gangtok 737102, India
Trupti Vashishtha: Malaviya National Institute of Technology, Jaipur 302017, India
A Suresh: Indian Council of Agricultural Research-Central Institute of Fisheries Technology (ICAR-CIFT), Cochin 682029, India
Madhusudan Bhattarai: Jalsrot Vikas Sanstha (JVS)—Nepal, Kathmandu 700003, Nepal

Sustainability, 2022, vol. 14, issue 22, 1-22

Abstract: The demand for organic foods is increasing worldwide due to health and environmental benefits. However, there are several unanswered questions, such as: Do organic farmers generate higher profits? Will the cost of cultivation reduce to compensate for low yields? Can farmers practice as per the organic agriculture protocols and obtain certification? The literature on organic agriculture varies widely in terms of profitability, yields and costs of organic products. A few studies have researched site-specific organic agriculture, but none have compared organic with conventional agriculture at larger scale in India. The Indian government has promoted organic agriculture since 2015 through its pan-India scheme—Paramparagat Krishi Vikas Yojana (PKVY). Under this program, there were 13.9 million certified organic farmers in 29,859 organic clusters, covering 0.59 million hectares (about 0.4% of the cropped area in India). This study assessed the implementation process of PKVY and the impact at the farmer level using the Difference-in-Difference approach. An economic surplus model was employed to observe the macro scale using data from an all-India representative sample from 576 clusters for the crop year 2017. The results identified that organic farmers experienced 14–19 percent less costs and 12–18 percent lower yields than conventional farmers. The net result is a marginal increase in profitability compared to traditional agriculture. The economy-wide economic surplus model indicates that there will be a reduction in producer and consumer surplus due to reduced crop yields. However, if the shift from conventional to organic is confined to rainfed, hilly and tribal areas, there will be an increase in both consumer and producer surplus.

Keywords: impact assessment; organic farming; natural farming; alternative farming; process analysis; South-Asia; theory of change (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.mdpi.com/2071-1050/14/22/15057/pdf (application/pdf)
https://www.mdpi.com/2071-1050/14/22/15057/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:14:y:2022:i:22:p:15057-:d:972259

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().