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Organic Farming Increases the Technical Efficiency of Olive Farms in Italy

Maria Raimondo (), Francesco Caracciolo (), Concetta Nazzaro () and Giuseppe Marotta ()
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Maria Raimondo: Department of Law, Economics, Management and Quantitative Methods, University of Sannio, via Delle Puglie 82, 82100 Benevento, Campania, Italy
Concetta Nazzaro: Department of Law, Economics, Management and Quantitative Methods, University of Sannio, via Delle Puglie 82, 82100 Benevento, Campania, Italy
Giuseppe Marotta: Department of Law, Economics, Management and Quantitative Methods, University of Sannio, via Delle Puglie 82, 82100 Benevento, Campania, Italy

Agriculture, 2021, vol. 11, issue 3, 1-15

Abstract: While there is growing recognition of the positive role played by organic farming in the reduction of the negative externalities due to conventional agriculture, there is uncertainty about the effect of the latter on the economic performance of the farms. In this scenario, the present paper aims at investigating the effect of organic farming on technical efficiency in Italian olive farms. A cross-section dataset was analyzed through the stochastic frontier function, where the adoption of organic farming was explicitly modeled. Then, to obtain an unbiased estimate of the impact of organic farming on technical efficiency, a propensity score matching method was implemented. The findings reveal that organic farming increases technical efficiency in Italian olive farms by approximately 10%. The highest impact of organic farming is observed in small farms. As for the propensity to become organic, we found that the production and the direct sales of a higher quality of gross marketable output, as well as the intensity of labor and machines, increase the probability to adopt organic farming. Conversely, farm localization, the availability of family labor, and financial capital discourage conversion to the organic farming system.

Keywords: organic agriculture; stochastic frontier function; propensity score matching; FADN; olive farms (search for similar items in EconPapers)
JEL-codes: Q1 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 (search for similar items in EconPapers)
Date: 2021
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