Farmer Response to Policies Promoting Organic Farming Technologies in Finland

Posted: 18 Jul 2001

See all articles by K.S. Pietola

K.S. Pietola

Wageningen UR - Agricultural Economics Research Institute (LEI)

Alfons Oude Lansink

Wageningen UR - School of Social Sciences

Abstract

This paper analyses factors determining the choice between standard and organic farming technology in Finland by numerically iterating a Bellman equation backwards in time. The unknown parameters of a switching-type Probit model are estimated by maximum likelihood estimation. The maximised values of the uncertain revenue streams are stimulated. The results suggest that decreasing output prices and increasing direct subsidies trigger the switch to organic farming. The switch is also more likely on farms having large land areas and low yields. Intensive livestock production and labour-intensive production decrease the probability of switching to organic farming.

Keywords: organic farming, technology choice, dynamic optimisation, switching-type Probit, Finland

Suggested Citation

Pietola, K.S. and Lansink, Alfons G.J.M. Oude, Farmer Response to Policies Promoting Organic Farming Technologies in Finland. Available at SSRN: https://ssrn.com/abstract=265120

K.S. Pietola

Wageningen UR - Agricultural Economics Research Institute (LEI)

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Alfons G.J.M. Oude Lansink (Contact Author)

Wageningen UR - School of Social Sciences ( email )

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