Emergence of organic farming under imperfect competition: economic conditions and policy instruments
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2014
- handle: 10670/1.xrb9fn
- hal: hal-01123391
- doi: 10.1515/jafio-2013-0025
- PRODINRA: 279154
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info:eu-repo/semantics/altIdentifier/doi/10.1515/jafio-2013-0025
Mots-clés
agricultural inputs imperfect competition organic farming policy design technological choice Q - Agricultural and Natural Resource Economics • Environmental and Ecological Economics/Q.Q1 - Agriculture/Q.Q1.Q13 - Agricultural Markets and Marketing • Cooperatives • AgribusinessSujets proches
Organic production of crops Organic cultivation Organic crops Regenerative agriculture Organiculture Ecological agricultureCiter ce document
Mélanie Jaeck et al., « Emergence of organic farming under imperfect competition: economic conditions and policy instruments », HAL-SHS : économie et finance, ID : 10.1515/jafio-2013-0025
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Résumé
This paper explores the economic conditions for the viability of organic farming in a context of imperfect competition. While most research dealing with this issue has adopted an empirical approach, we propose a theoretical approach. Farmers have a choice between two technologies, the conventional one using two complementary inputs, chemicals and seeds, and the organic one only requiring organic seeds. The upstream markets are oligopolistic and the firms adopt Cournot behavior. The game is solved backward. The equilibrium distribution of the farmers between both sectors is obtained by a free-entry condition. Since multiple equilibria could exist, including the non-emergence of organic farming, we spell out viability conditions for organic farming. Then, using an “infant industry” argument, we propose several public policy instruments able to support the development of organic farming and assess their relative efficiency. Results could be useful to assess the conditions of emergence and viability of agricultural innovations in analogous contexts.