Assessing Organic Cherry Farmers’ Strategies under Different Policy Options

Abstract

Organic farming has experienced a vast increase within the EU. Especially in Greece, the rapid growth of the organic sector, since the early '90s, was accompanied by the introduction of various organic crops. Among them, organic fruit crops have been gradually introduced, as farmers have realised the promising growth of the demand for organic fruits. However, organic farmers face significant yield and price risks, which combined with the high initial establishment costs, provoke difficult investment decisions. Rational farmers are willing to adopt organic farming only if the economic outcomes outweigh the associated increased risk and uncertainty. This study employs stochastic efficiency analysis to compare the economic outcomes of organic and conventional cherry production in Northern Greece. It, thus, explores whether the expansion of organic cherry production generates satisfactory economic results for farmers and whether it can be regarded as a promising alternative to conventional production activity. Results reveal that the current Greek policy scheme may endanger investments in organic cherry farming. Further assessment of the impact of varying organic subsidy and discount rate levels on the net present value underlines the detrimental effects of the financial crisis. An enhanced policy framework is required to enable and support climate-smart agriculture.

Economic and Social Sustainability through Organic Agriculture: Study of the Restructuring of the Citrus Sector in the “Bajo Andarax” District (Spain)

“…A "Sociedad Agraria de Transformación" is a cooperative-type association of independent farmers with both economic and social objectives, and to which the totality of the production of the farmers is allocated. Since the further exploitation of conventional varieties was deemed economically unfeasible, the diversification into higher-value crops was considered the best alternative for the majority of the small and medium-sized farms of the district as a means to guarantee not only the socio-economic feasibility of the holdings, but also the reform of the sector in line with a climate-smart agricultural approach [7].…”

Conventional, Partially Converted and Environmentally Friendly Farming in South Korea: Profitability and Factors Affecting Farmers’ Choice

“…The result demonstrates that receiving subsidies is the most significant positive influence on farmers' decisions. Moreover, similar studies found a positive relationship between the conversion process as an institutional factor [66,67]. This revealed that the subsidy can be considered as a key factor to encourage farmers to convert to EFF and expand arable land area of EFF [68].…”

Exploring risk management strategies for organic farmers: A Greek case study

“…Organic, high-quality products constitute an important aspect of Greek agriculture; given that Greek farmers are increasingly near the epicenter of a new ‘production model’ for Greece, policy-makers should provide necessary institutional support to organic farming by implementing the anticipated new CAP measures in a timely and cautious manner. Such initiatives should also couple the necessary institutional and legal improvements within the domestic supply chain in order to increase the market potential of organic products 26 , 43 , 44 . The creation of a meaningful value chain based on organic output of high quality is considered essential in order to put a dynamic part of the Greek agricultural sector on a sustainable and profitable future and to satisfy at the same time consumers’ concerns and access to foods of high nutritional value.…”