Abstract
Literature shows a significant development of organic farming in Europe but with considerable differences between countries. These depend on general agricultural policy (the set of regulations and laws), specific policy incentives, and also on differences in consumer behaviour. This paper reviews scientific literature on the evaluation of the technical, economic and environmental aspects of conversion from conventional towards organic production. The methods and results of empirical and normative modelling studies at the farm level, with special regard to farm management and policy, are analysed. Empirical modelling studies show the importance of incentives and agricultural policy, and the usefulness of integrated modelling for determining the effects of different policies on farm management. Normative modelling shows the effects of new policy instruments and technology, and allows the high level of detail needed for what-if analysis. Normative models of conversion to organic farming confirm the importance of incentives and the agricultural policy context.
Generated Summary
This research article reviews scientific literature on the economic, environmental, and technical implications of converting from conventional to organic farming. The study focuses on farm-level modeling, analyzing both empirical and normative approaches to assess the effects of different policies on the transition to organic farming systems. The review examines empirical studies that emphasize incentives and agricultural policy, and normative models that explore the impacts of new policy instruments and technology, aiming to determine their suitability for modeling the conversion process from conventional to organic farming. The research is based on articles in peer-reviewed scientific journals, comparing the methods and results of various studies to understand the advantages and disadvantages of different approaches in the context of organic farming conversion.
Key Findings & Statistics
- In 1985, the area of organic production in the EU was 100,000 ha, with 6,300 organic farms, representing less than 0.1% of the total farms.
- By the end of 1999, the EU had over 127,000 organic holdings, covering 3.3 million hectares, which was nearly 1.5% of all holdings.
- Austria and Sweden saw organic farming reach 10-15% of total agriculture in the late 1990s.
- In the Netherlands, the growth in organic farms increased significantly in the 1990s, with over 200 farms converting per year in 1998 and 1999, equivalent to an annual growth of more than 25%.
- In July 2001, 1.47% of the total agricultural area in the Netherlands was organically managed.
- De Koeijer et al. (1995) examined whether mixed farming systems offer more perspectives for an economically and environmentally sustainable agriculture than specialized farms.
- Berentsen et al. (1998) aimed to quantify economic and environmental consequences for intensive and extensive dairy farms typical for the province of Utrecht, the Netherlands, when converting to organic dairy farming.
- Donaldson et al. (1995) examined the effects of Common Agricultural Policy (CAP) price changes on income and environment on arable farms in two regions: south-east England and south-west France.
- From 1993 to 1997, an average of 60 farms per year in the Netherlands were converted.
- The conversion period for livestock production varies from 6 weeks for layers to 12 months for beef cattle.
Other Important Findings
- Empirical modeling studies highlighted the importance of incentives and agricultural policy. They showed the usefulness of integrated modeling in determining the effects of different policies on farm management.
- Normative modeling demonstrated the effects of new policy instruments and technology, and facilitated detailed ‘what-if’ analyses.
- Normative models of conversion to organic farming confirmed the importance of incentives and the agricultural policy context.
- Conversion to organic farming involves two main types: staged (step-by-step) and single-step conversion, each with different implications for risk and financial impacts.
- The study highlights the practical consequences of organic farming, including the need to maintain soil fertility through crop rotation and the use of organic fertilizers, as well as the emphasis on animal welfare in livestock production.
- Farmers converting to organic farming face challenges, including forage shortages, health problems in livestock, weed control issues, high workloads, and financial difficulties.
- The agri-environmental measures introduced by EU Council Regulation 2078/92 (Anon., 1992) encourage conversion to and maintenance of organic farming by providing financial compensation to farmers for any losses incurred during conversion.
- The study suggests that policy design should consider farmers’ behavioral aspects, such as risk attitude and perception, which can be incorporated into linear programming models using quadratic risk programming or dynamic stochastic programming.
- Models that focus on policy analysis aim to clarify the effect of different policy instruments on management decisions and through it on economics and environment.
Limitations Noted in the Document
- The study acknowledges the limitations of empirical models, which often have a low level of detail and are based on historical data, making it difficult to incorporate new technologies or policy types.
- The study notes that the majority of normative studies did not include time in the model. However, the inclusion of time is important to account for stepwise conversion and the possibility of analyzing the effects of different policy incentives before, during, and after the conversion period.
- The research identifies that a difficulty often arose while analyzing the studies was the low level of detail of the model descriptions.
- The models are often based on an average data set within one region or one sector and may not fully capture the variability across different farms in that region.
- Empirical models primarily focus on identifying the main factors that influence the conversion to sustainable farming systems.
Conclusion
The review underscores the growing significance of organic farming in Europe, driven by factors such as public support, evolving consumer behavior, and recognition of environmental benefits. The study emphasizes the value of environmental-economic farm modeling in understanding the interactions between production management, environmental impacts, farm income, and the implications of different policy instruments. The review highlighted the potential of mathematical programming as a tool for analyzing the interplay between management practices and production intensity. It also stresses the need for a detailed and time-sensitive approach in modeling the conversion process, taking into account the potential for stepwise conversions and the effects of policy incentives at different stages. Furthermore, the study points out the importance of considering farmers’ behavioral aspects, such as risk attitude, in the decision-making process. The insights gained from this study can inform the design of policies aimed at promoting sustainable farming practices and improving the environmental and economic outcomes of the agricultural sector, especially as the adoption of organic farming continues to evolve across Europe. The authors also concluded that, ideally, an optimizing algorithm for the HM modules, consisting of dynamic networks, would be Dynamic Programming.