Presentation at the Vadym Hetman Kyiv National economic University

Efficiency Analysis of organic farming systemsAn Overview on Joint Topics, Results and Conclusions Presentation at the Vadym Hetman Kyiv National economic University Sebastian Lakner & Stephan von Cramon-TaubadelNovember 11, 2011

Introduction: Organic Farming in Germany • Methods • Overview on empirical results 3.1 Studies focussing on organic farming 3.2 Comparative studies 3.3 Joint topics and results, shortcomings • Summary and Conclusions Efficiency of organic farms - Lakner & von Cramon-Taubadel Outline

Efficiency of organic farms - Lakner & von Cramon-Taubadel 1. Introduction: Organic Associations and the state Farmers Associations for organic farming Government-Signs for organic farming Germany European Union

Efficiency of organic farms - Lakner & von Cramon-Taubadel 1. Introduction: Wheat prices Figure 2: Producer Prices of Conv. and Organic Soft WheatSources: ZMP [a]; ZMP [b]; ZMP [c]; AMI (2010a, 2010b, 2011a, 2011b).

Efficiency of organic farms - Lakner & von Cramon-Taubadel 1. Introduction: Grain Yields (dt/ha) Figure 5: Wheat-Yields in Organic and Conv. Farms in GermanySource: own calculation, data from the Federal Ministry of Food, Agriculture and Consumer Protection

Figure 7:Production function and production frontierSource:Cantner et al. 2007: p.5 Efficiency of organic farms - Lakner & von Cramon-Taubadel 2. Methods: Data Envelopement Analysis Output Output-oriented C Input-oriented B technology Input

Efficiency of organic farms - Lakner & von Cramon-Taubadel 2. Methods: Stochastic Frontier Analysis Output Stochastic Production Frontier y = f (x; beta) * exp{v-u} maximal feasible output Stochastic-term:exp {v} Inefficiency-term: exp{- u} Observed farm n Input Figure 8: The Stochastic and inefficiency term in the modelSource: Own elaboration according to COELLI et al. 2005: p. 244

Labour’s impact on organic farms Arable farms > mixed farms > grassland farms The scale level is not always optimal Optimal specialization Regional distribution Efficiency during the period of conversion The organic subsidy has a negative impact on efficiency Efficiency of organic farms - Lakner & von Cramon-Taubadel 3.1 Studies focussing on organic farming

Figure 9: Technical efficiency in 15 regional cluster of organic farmingSource: own calculations

Organic farming is less productive, Mixed evidence with efficiency Often separate estimation in DEA The choice of farm-system? Efficiency of organic farms - Lakner & von Cramon-Taubadel 3.2 Comparative studies

Environmental objectives of organic farming • Farm-structure of organic vs. conventional • Sample-selection techniques (the Heckman model) • Matching techniques • Balance of observation in the data-set • Optimal level of specialization • Methodological issues Efficiency of organic farms - Lakner & von Cramon-Taubadel 3.3 Joint topics and results, shortcomings

Efficiency of organic farms - Lakner & von Cramon-Taubadel Environmental objectives of organic farming Figure 12: Technical and Environmental Efficiency in BavariaSource:own elaboration based on the results of Kantelhardt et al. 2009

Organic farming is less productive • Mixed evidence with efficiency • Sampling issues • Balance in the sample • Structural issues • Little discussion on topics specific to organic • Conversion to organic farming • Environmental efficiency • Little data on economic and environmental variables Efficiency of organic farms - Lakner & von Cramon-Taubadel 4. Summary and Conclusions

Georg-August Universität Göttingen Thank you for your attention!

Efficiency of organic farms - Lakner & von Cramon-Taubadel 1. Introduction: History of organic farming 1990s – 2000s Demeter Bioland, Naturland Gäa EU-Bio Ecological Farming AGÖL, BÖLW East-Germany ? 1980s • ‘Organic-biological farming’ • Müller & Rusch 1950s - 1970s • ‘Bio-dynamic farming’ • ‚biological farming‘ 1920s – 1930s • Rudolf Steiner 1924 ‚Natural farming‘ Source: own elaboration, see also Vogt 2000, p.19

Efficiency of organic farms - Lakner & von Cramon-Taubadel Retailing in theorganicmarket Figure 10: Shares of sales channels in the German market for organic foodSource: Authors’ elaboration, data from IÖW (2007), Rippin and Hamm (2007), AMI (2011)1: Farmers on weekly markets and farm-shops; including delivery-services from farmers. 2: Including Special Fruit and Vegetable stores.3: Including drugstores, petrol-stations and other delivery services.

Efficiency of organic farms - Lakner & von Cramon-Taubadel Farm-sizes in of German Farms

Efficiency of organic farms - Lakner & von Cramon-Taubadel Figure 4:Regional concentration of organic farms in Germany in 2007Source: Regional Database 2007 and 2005 from the German Federal Statistical Office (Destatis 2006)

The world of organic farming in 2007: share of land Efficiency of organic farms - Lakner & von Cramon-Taubadel The organic market worldwide

Efficiency of organic farms - Lakner & von Cramon-Taubadel Table 1: Premium for organic grassland-farming in Germany Quelle:Eigene Recherche, Nieberg & Kuhnert 2006

Figure 6:Production function and production frontierSource:Cantner et al. 2007: p.5 Efficiency of organic farms - Lakner & von Cramon-Taubadel 2. Methods: Efficiency Analysis Output „Optimal practice“ C Production-“frontier“ „Best practice“ B Production function „actual practice“ technology Input

Efficiency of organic farms - Lakner & von Cramon-Taubadel Used model approaches

Efficiency of organic farms - Lakner & von Cramon-Taubadel Figure 10: Technical efficiency of organic farms during and after the conversion periodSource: own calculations

Efficiency of organic farms - Lakner & von Cramon-Taubadel 1. Introduction: Milk-Yields on organic farms Figure 5: Milk-Yields in Organic and Conventional Farms in GermanySource: own calculation, data from the Federal Ministry of Food, Agriculture and Consumer Protection

Presentation at the Vadym Hetman Kyiv National economic University