TITLE:
Assessing Organic Cherry Farmers’ Strategies under Different Policy Options
AUTHORS:
Irene Tzouramani, Angelos Liontakis, Alexandra Sintori, George Alexopoulos
KEYWORDS:
Organic Agriculture, Cherry Sector, Agricultural Policy, Stochastic Simulation, SERF Analysis
JOURNAL NAME:
Modern Economy,
Vol.5 No.4,
April
4,
2014
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.