Opportunity Costs of Providing Crop Diversity in Organic and Conventional Farming: Would Targeted Environmental Policies Make Economic Sense?

Timo Sipilainen and Anni Huhtala

No 114527, 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland from European Association of Agricultural Economists

Abstract: Targeted environmental policies for farmlands may improve the cost-efficiency of conservation programs if one can identify the farms that produce public goods, or environmental outputs, with the least cost. We derive shadow values of producing crop diversity on conventional and organic crop farms to examine their opportunity costs of conservation. Non-parametric distance functions are estimated by applying data envelopment analysis to a sample of Finnish crop farms for the period 1994 – 2002. Our results show that there is variation in the shadow values between farms and the technologies adopted. The extent of cost heterogeneity and farms’ potential for specialization in the production of environmental outputs determine whether voluntary programs such as auctions for conservation payments are economically reasonable.

Keywords: Crop Production/Industries; Environmental Economics and Policy (search for similar items in EconPapers)
Pages: 25
Date: 2011
New Economics Papers: this item is included in nep-agr, nep-eff and nep-env
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Citations: View citations in EconPapers (4)

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Journal Article: Opportunity costs of providing crop diversity in organic and conventional farming: would targeted environmental policies make economic sense? (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae11:114527

DOI: 10.22004/ag.econ.114527

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