Organic and Conventional Grape Growing in Italy: a Technical Efficiency Comparison Using a Parametric Approach

From Firenze University Press Journal: Wine Economics and Policy

Federica Cisilino, CREA — Council for Agricultural Research and Economics Research Centre for Agricultural Policies and Bio-Economy c/o University of Udine

Fabio A. Madau, Department of Agricultural Sciences University of Sassari

Roberto Furesi, Department of Agricultural Sciences University of Sassari

Pietro Pulina, Department of Agricultural Sciences University of Sassari

Brunella Arru, Department of Agricultural Sciences University of Sassari

Organic farming is a well-established reality in Europe, where it has been regulated since 1991.One of the most debated topics in this field consists of measuring organic and conventional agriculture’s technical and economic performance to highlight similarities and differences.Comparison between organic and conventional farming is a very interesting field of research where different approaches have been adopted to find out differences between the two systems mainly to compensate for organic farming additional costs and income foregone. The assumption is that the organic method discounts a gap on the production level compared to conventional agriculture.

This papertries to give evidence of the effective differences in terms of technical efficiency in using inputs by farms as controversial findings have been found on this topic.The analysis is focused on the European grape-growing sector since the relevance of the organic wine sector and because the European Union (EU) accounts for 49% of the world grape-growing area. Italy is the country that devotes the larger land in the world to organic grape-growing.

Specifically, Italian organic vineyards covered about 110K hectares (23% in conversion),corresponding to 15.5% of the total world organic vineyards area [4]. Estimating differences in grape-growing productivity is a crucial issue for better addressing policies and strategies in the sector.At the same time, assessing the role of efficiency in affecting production would provide useful information for understanding if the gap that organic grape-growing pays is only attributable to different productivity –therefore to the adoption of a less performing technology than the conventional one–or, vice versa, to anotherability in using the inputs bundle.

This paper aims to provide a comparative analysis between Italian organic and conventional farms by estimating productivity and efficiency to confirm if a real difference in productivity exists and to evaluate the role of efficiency in affecting observed production level. This paper also tackles the debate on the typology of frontiers that must be used to compare organic and conventional farms. The question turns on the consideration of organic and conventional orientation as two different techniques within a single technological horizon or, conversely, as two different technologies that, in turns, refer to two different types of agriculture that are not directly comparable.

In this context, some conceptual and methodological problems arise and should be addressed: a) firstly, the risk is to consider systems that are not homogeneous from a technological WEP –Wine Economics and Policy Just Accepted Manuscript3or organisationalpoint of view because organic farming is developed on well-defined production processes and use of technical inputs; b) secondly, conventional agriculture can be considered as a jumble of a plethora of agronomic techniques, some of them very close to the organic method, and it is difficult to trace back to a well-defined technical-production paradigm. Regarding the latter aspect, conventional agriculture can be understood as the most widespread practice in each territory or, conversely, all alternative techniques to the organic method can be included in this category.

The answer to this question has pivotal implications. In the first case, due to the use of the same frontier for the two orientations and thus the possibility of directly comparing them, any different productivity levels are mainly determined by inefficiencies rather than by actual technological gaps. Conversely, the two measures are not comparable in the second case because of the difference in productivity derived from both inefficiencies and the different technology adopted by the two production orientations. This implies that the efficiency measure must be related to specific production frontiers, one for the organic method and one for the conventional one.

DOI: https://doi.org/10.36253/wep-10384

Read full text: https://oaj.fupress.net/index.php/wep/article/view/10384