Organic Agriculture More Profitable, Study Says

A comprehensive study finds organic agriculture is more profitable for farmers than conventional agriculture

In spite of lower yields, the global study shows that the profit margins for organic agriculture were significantly greater thanconventional agriculture. The results show that there's room for organic agriculture to expand and, with its environmental benefits, to contribute a larger share in feeding the world sustainably. Organic agriculture currently accounts for only one percent of agriculture globally.

The study, published this week in the Proceedings of the National Academy of Sciences , was authored by Washington State University scientists David Crowder and John Reganold.

To be sustainable, organic agriculture must be profitable. That motivated Crowder and Reganold to analyze dozens of studies comparing the financial performance of organic andconventional farming.

"The reason we wanted to look at the economics," said Crowder, an entomologist who studies organic systems, "is that more than anything, that is what really drives the expansion and contraction of organic farming—whether or not farmers can make money. It was kind of surprising that no one had looked at this in a broad sense."

Organic price premiums give farmers an incentive to adopt more sustainable farming practices. The authors suggest that governmental policies could further boost the adoption of organic farming practices and help ease the transition for conventional farmers.

Room to grow

The actual premiums paid toorganic farmersranged from 29 to 32 percent above conventional prices. Even with organic crop yields as much as 18 percent lower than conventional, the breakeven point for organic agriculture was 5 to 7 percent.

"That was a big surprise to me," said Reganold, a soil scientist and organic agriculture specialist. "It means that organic agriculture has room to grow, there's room for premiums to go down over time. But what we've found is that the premiums have held pretty steady over the 40 years represented in the study."

Out of 129 initial studies, 44 met Crowder and Reganold's criteria for inclusion in the meta-analysis of costs, gross returns, benefit/cost ratios, and net present values - a measure that accounts for inflation. The analysis represented 55 crops in 14 countries on five continents. The published article provides the criteria used to select the studies as well as a list of studies that were rejected.

Unique to the analysis was the inclusion of yield and economic data for crops grown as part of a rotational system, in addition to data for single crops. The study included profit data for multiple crops grown over several seasons, a more accurate reflection how farmers profit from agriculture.

Source: Phys.org

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