THREE ESSAYS ON ORGANIC AGRICULTURE

Hyunjin Lim

doi:10.7273/000006433

This dissertation contains three pieces of empirical research in organic agricultural economics. The first essay examines the factors that influence farmers to choose direct marketing strategy and estimate the impacts of direct marketing on farm performance, with considering farms’ locational environment and spatial interaction between farmers’ choice of marketing strategy. Results from the Endogenous treatment model show that variables of geographic location and spatial interaction have significant influences on marketing strategy choice, and some of geographic variables are associated with farm sales. Also, it is found that there exists direct marketing penalty on the average, while for the smaller farms, the amount of the difference in expected sales is not significant across the marketing strategies, implying that direct marketing may be a viable strategy for some smaller farms. The second research investigates a number of scenarios that represent pest or disease outbreak due to climate change. This research constructed dynamic model of the U.S. apple industry that is separated into organic and conventional industries to better measure the impacts of pest or disease outbreaks on producers and consumers. Findings in this study suggest that there would be heterogenous impacts of the outbreaks between organic and conventional industries and by type of shock since production systems and growers and consumers’ responses to shock could differ widely across industry. The third essay investigates the impacts of price premium on the supply of organic crops. This study estimates an econometric model of land adjustment and yields to determine how the elasticity of supply depends on the market-level organic premium versus farm-level prices. This essay first estimates the supply responses at the aggregate-level and then analyze a rich farm-level dataset. The aggregate-level results show that acreage, production, and yield responses to price premiums and/or own prices are positive as expected, while the long-run production and yield elasticities are inelastic relative to acreage responses. The farm-level results suggest that farm’s yield responds to the average market prices more than the prices they received, and that organic apple producers may depend on the organic premiums rather than organic prices when they invest in organic apple acres.

THREE ESSAYS ON ORGANIC AGRICULTURE

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