Data/hora: 09/06/2024 12:29:57

Provedor de dados: | 31
País: | United States
Título: | Valuing the Option to Switch to Organic Farming: An Application to U.S. Corn and Soybeans
Autores: | Wossink,   Ada; Kuminoff,   Nicolai V.
Data: | 2005-09-30
Ano: | 2005
Palavras-chave: | Option theory; Organic farming; Direct payments; Switching regression; Conservation Security Program; Crop Production/Industries; D81; Q18.
Resumo: | Based on option value theory, we develop a theoretical model to assess the dollar compensation required for the conversion to organic farming. Our empirical model is a switching regression model with two regimes and we use county level data on organic and conventional corn and soybean production in the U.S. for the application. Assuming an interest rate of 10 percent, a conventional corn-soybean grower would need to receive a one-time payment of $315 per acre to compensate for the conversion cost and an additional $1,088 per acre to cover the long run higher production and market risks. The sum of these two values equals an annual payment of $228 per acre for a 10 year contact. The results are discussed in the context of the recently introduced Conservation Security Program, which will make direct payments to US farmers for organic practices.
Tipo: | Conference Paper or Presentation
Idioma: | Inglês

Identificador:

17854

http://purl.umn.edu/24716

Editor: | AgEcon Search

Relação:

European Association of Agricultural Economists&gt;2005 International Congress, August 23-27, 2005, Copenhagen, Denmark

Contributed Paper

Formato:

13

application/pdf