Determinants of economic growth in organic farming: the case of Bavaria and Baden-Württemberg

Der vorliegende Beitrag untersucht Faktoren, die möglicherweise einen Einfluss auf das wirtschaftliche Wachstum von 332 ökologischen Betrieben in Bayern und Baden-Württemberg haben. Die Ergebnisse zeigen, dass Direktvermarktung und der Tierbesatz das einzelbetriebliche Wachstum positiv beeinflussen. Diese Effekte sind deutlicher ausgeprägt als andere Einflüsse. Daneben kann gezeigt werden, dass technisch ineffiziente Betriebe stärker wachsen als technisch effiziente Betriebe. Dies kann mit dem ökonomischen Druck auf ineffiziente Betriebe und mit Ineffizienz im Wachstumsprozess erklärt werden

Determinants of Economic Growth in Organic Farming: The Case of Bavaria and Baden-Wuerttemberg

The organic sector in Germany has experienced a substantial growth since the beginning of the 1990s until today. During this process of expansion, most organic farms have grown in terms of factor endowment, while others have disappeared or reconverted to conventional agriculture. This paper investigates the potential determinants of farms growth in the organic sector. This paper models potential factors that might have an impact on the economic growth of 332 organic farms in Bavaria and Baden-Wuerttemberg. The econometric model was developed based on ‘Gibrat’s Law’, using a fixed effect method (FE). The results suggest that direct marketing and livestock intensity significantly influence farm growth. In addition, less efficient farms grew faster than more efficient ones. This outcome can be explained by the economic pressure on inefficient firms for adaptation during the growth and survival process

What Influenses the Growth of Organic Farms? Evidence from a Panel of Organic Farms in Germany

Organic farming is one of the fastest-growing branches of agriculture in Germany. The net increase in the number of hectares comes partly from the conversion of conventional farms, but also in part from the acreage expansion of existing organic farms. So far, empirical research has focused on analysing conversion to organic farming, and lately on reversion to conventional farming. However, changes in individual organic farm sizes have remained ignored by empirical researchers. Additionally, the occurrence and the extent of farm growth are largely dependent on the regional conditions of land market, farm structure and policy measures. Therefore, it remains unclear what other factors besides increasing demand for organic products might influence growth of organic farms. The main objective in this study is to determine whether organic farms are changing their scale of operation and, if so, which factors contribute to – or stagnate – farm growth and to what extent. To answer these questions we analyse growth in a unique panel dataset of 453 farms over the 1993-2005 period using the system generalised method of moments estimator (SGMM). The results reveal that all farms increase area by a maximum of 10 ha and large farms change farm size more frequently than smaller ones. Increases in organic area are influenced by subsidies for organic farming and intensity of livestock production. Farm growth measured in terms of output is affected by farm size, land, capital, soil quality, and intensity of livestock production

Economic growth of farms: An empirical analysis on organic farming

This article investigates which factors influence the economic growth of organic farms. Organic farming has experienced a substantial growth in Germany since the beginning of the 1990s until today. Most organic farms are concentrated in the southern region of the country, Bavaria and Baden-Wuerttemberg. While some of these farms have expanded their business size, others have contracted, reconverted to conventional or ceased to operate. Using a panel data of 318 farms and a System GMM method, the economic growth of organic farms is analyzed. Regression results suggest that organic farms with high revenue from agriculture are less likely to grow than smaller farms. Growth is influenced by livestock intensity, multiple job holding, share of grasslands areas, soil quality and agri-environmental payments for organic farming

Technical Efficiency in the Chilean Agribusiness Sector – a Stochastic Meta-Frontier Approach

The Chilean economy is strongly export-oriented, which is also true for the Chilean agribusiness industry. This paper investigates the technical efficiency of the Chilean food processing industry between 2001 and 2007. We use a dataset from the 2,471 of firms in food processing industry. The observations are from the ‘Annual National Industrial Survey’. A stochastic meta-frontier approach is used in order to analyse the drivers of technical efficiency. We include variables capturing the effects of labour-quality, the extent of export orientation and the impact of paid subsidies to the agribusiness firms. Raw materials and labour have to largest impact on the output, but with a different input-intensity for the different agribusiness sectors. We could show that technical efficiency is different in the different agribusiness sectors and that some sectors (the bakery and the grain & mill sector) are using a more productive technology than the other sectors. Potential impacts on structural change in the Chilean food processing industry are discussed. The paper also shows, that exporting firms in the agribusiness industries can be described as more dynamic, achieving either a higher technical efficiency or a higher technological change