Productive performance of organic crop farms in Finland 2010–2017

Abstract

Increasing organic production is one of the strategic objectives of the Finnish agricultural policy. Despite the positive developments observed during the last decade, reaching the objectives set by the Finnish government remains challenging. The contributions of this study are twofold. Firstly, this study provides new empirical evidence on productive performance of organic crop farming in Finland and explains observed gap between average output of organic and conventional farms. Specifically, we use the most recent available farm-level data and analyze the performance of organic crop farms over the period 2010–2017. Secondly, to estimate the performance gap between the organic and conventional crop farms, we apply one-stage semi-nonparametric regression. This approach alleviates the endogeneity problem of the commonly used two-stage estimation approaches, providing robust estimates without restrictive functional form assumptions. Our results reveal a significant performance gap between organic and conventional farming. However, the difference between productive performance of organic and conventional crop farms has been decreasing over the years. Moreover, a positive trend is revealed in organic production at the end of the study period.