Is organic agriculture so special that special social theories and methods are needed? The article investigates the question in two steps: First, the article address the question whether agriculture is special. Second, whether organic agriculture is special. It is concluded that from an economic point of view new research suggests that the organic sector can only be conceptualized and understood in the general social context. If the sector is analyzed as independent of general social context, it will lead to insufficient, and in worst case wrong, understandings and subsequently inadequate policy recommendations

Ingemann, Jan Holm

English

Organic Eprints

11 2/2009Economics, Policy, and Organic AgricultureBy Jan Holm Ingemann, Associate Professor, Aalborg UniversityIs organic agriculture spe-cial in an economic sense? The question can be divided into at least two sub-questi-ons concerning agriculture in general and organic agri-culture in particular:Is  •  agriculture special? I.e. does agriculture fundamentally differ from other productive activities in society and hence imply spe-cial addressing concer-ning policies?Is  •  organic agriculture special?I.e. are there any rea-sons to expect organic agents (including consumers) to act and react based on diffe-rent mechanisms than agents related to agri-culture in general? Is agriculture special?In the history of economic thought the answer has most often been affirmative. The affirmative answer was the key to the evolution of a special branch of economics under the headline “agricul-tural economics”. Roughly speaking, the contributions in agricultural economics until the 1960s underlined two major characteristics:  Agricultural produc- • tion is special due to the obvious biological dependencies (inclu-ding land as a neces-sary productive factor) for instance implying a long time-lag between the production decisi-ons and the productive output. This implies a risk of what seems to be absurd responses to market signals (so-called pervert market reactions).  Agriculturalists  • (farmers) are special agents first of all because they consi-der farming a way of living. The family is at-tached to the land/the place and the family labor force is rather fixed. This implies that the agriculturists do not react as capitalists aiming at optimizing pecuniary outcome but rather as agents opti-mizing family welfare. Hence, focus was on special reactions from farmers (output reactions other than expected from general economics). Policy consi-derations among theorists were somehow limited; until around 1930 neoclassical economists in general had the same attitude towards social economy as meteoro-logists towards the weather: you can register how it evol-ves but you can’t do any-thing to change it. However, the crisis of the early 1930s drew attention to policy considerations connected to crisis management. General macro policy considerations In the last couple of decades, several social scientists have claimed that organic agricul-ture is a phenomenon so special, that special methods and theories are needed to explain the existence and subsequent evolution. It’s crucial to examine the claim prior to policy recommen-dations. In the COP project, we have thus done so from the point of view of economic science.ArticlesPhoto: Organic Denmark12 2/2009did then influence agricul-tural economics and thus economic theoretical ana-lysis of agricultural policy; but these considerations did only address the question of how to construct policies to counteract negative influ-ence from general business cycles.From the 1960s most economists conceptualized the agricultural problems (farmers realizing themsel-ves in an increasing incomes squeeze) as temporary and caused by protectionism and outdated ways of production in the farming sector. Hence adequate policy would im-ply more effective (liberali-zed) markets and/or govern-mental programs giving incentives to technological innovations and moderniza-tion (i.e. industrialization) of farms. In other words, focus was only on the supply side and agricultural policy was subsequently only seen as a question of making sup-ply side able to maximize quantity produced. In this line agricultural policies should be designed to as-sist farmers in switching to industrial technology and maximize output.  Satiety and the treadmillHowever, a few agricultural economists contested the mainstream analysis and pointed out that demand-si-de should be included in the analysis too. This inclusion did reveal that the farmers’ incomes problems couldn’t be seen as temporary only. The argumentation was linked to satiety: In the rich part of the world consumers were unable to eat more; besides, the increase of population was almost zero. Linked to the limits of the human capacity to digest the implication was that ef-fective demand was almost stable. An increase in output would then lead to a dra-matic decrease in prices. It was also demonstrated that the provision of subsidies to farmers would increase agri-cultural output (by means of industrial technology) and hence further decrease mar-ket prices. The subsequent social trap was labeled as “the agricultural treadmill”. From these agricultu-ral economists the policy recommendations were the opposite of the mainstream: slow down industrializa-tion of farming and thus the speed of the agricultu-ral treadmill. From such a policy society would benefit due to a decreasing amount of agricultural subsidies and a decreasing depreciation of environment. Mainstream and pluralismRoughly speaking, po-licy considerations within contemporary agricultural economics consist of two positions:Mainstream:Focus on supply side and conceptualizing farmers’ incomes squeeze as tem-porary. Policy means are primarily seen as ways of making farmers more effec-tive and/or making markets work more effective (libera-lization). Pluralistic:Focus on both supply and demand side and concep-tualizing farmers’ incomes squeeze in industrial and postindustrial economies as permanent. Policy means are to some degree seen as ways of avoiding pacing the agricultural treadmill and to find alternative ways of agricultural revenue (multi functionality). Is organic agriculture special?In an immediate sense the answer is off course affir-mative. Organic agriculture implies a certain technology relying more on biological mechanisms - which on the other hand is the original farming technology! From an economic point of view the question is whether the general lines of function (patterns of reaction among agents, sectoral evolution and development, etc) are special. New research sug-gests that the organic sector can only be conceptuali-zed and understood in the general social context (time and space). If the organic sector is only analyzed iso-lated from the context and as something independent of general social context, it will lead to insufficient and in worst case wrong under-standings of the sector and thus to inadequate policies.  ArticlesFurther readingOrganic EprintsThe Global Organic Food Market and TransformationThe Evolution of Organic Agriculture in DenmarkInternet linksEconomics, Business and Politics websiteDARCOF III websiteWebsite for the research pro-ject ”Comparetive Organic Policy (COP):www.cop.elr.dk/ukPhoto: Organic Denmark

Economics, Policy, and Organic Agriculture

I artiklen undersøges påstanden om, at økologisk jordbrug skulle være et samfundsmæssigt fænomen, der er så specielt, at det kun kan studeres ved hjælp af særlige teorier og metoder. I artiklen vises, at set i et økonomisk perspektiv kan den økologiske sektor kun begrebsliggøres og forstås i en generel, samfundsmæssig kontekst. Hvis den økologiske sektor analyseres adskilt fra den generelle, samfundsmæssige kontekst, så vil begrebsliggørelsen blive utilstrækkelig og i værste fald vildledende. Herved vil den også latent risikere at danne grundlag for uhensigtsmæssige, politiske initiativer.Is organic agriculture so special that special social theories and methods are needed? The article investigates the question in two steps: First, the article address the question whether agriculture is special. Second, whether organic agriculture is special. It is concluded that from an economic point of view new research suggests that the organic sector can only be conceptualized and understood in the general social context. If the sector is analyzed as independent of general social context, it will lead to insufficient, and in worst case wrong, understandings and subsequently inadequate policy recommendations. <br/

Economics, Policy, and Organic Agriculture

Abstract

Similar works

Full text

Available Versions

Organic Eprints

VBN (Videnbasen) Aalborg Universitets forskningsportal

Organic Eprints