Incorporating environmental impacts into value added from organic and conventional farming

We aim to improve the policy relevance of the aggregate welfare indicators regarding the economic and environmental features of farming practices. First, an analytical framework for measurement of environmentally adjusted net national product for agricultural sector is provided. Second, shadow pricing of direct disutility of environmental deterioration is illustrated with implications of the Finnish water protection policy measures restricting the use of manure on conventional and organic livestock farms over the period 1994-2002. Our simulated shadow prices per cubic meter manure are quite considerable reflecting the potentially high opportunity costs in terms of value added forgone if the only option to comply with regulation is to cut output. In practice, the organic farms seem to comply well with current regulation, and the environmentally harmful contribution of conventional farms to welfare is relatively small.


Issue Date:
2005
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/19259
Total Pages:
23
JEL Codes:
H23; O47; Q18; Q25
Note:
Replaced with revised version of paper 07/16/05.
Series Statement:
Selected Paper 136341




 Record created 2017-04-01, last modified 2017-05-27

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