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Farm‐level determinants of product conversion: Organic milk production
Author(s) -
Skolrud Tristan
Publication year - 2019
Publication title -
canadian journal of agricultural economics/revue canadienne d'agroeconomie
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.505
H-Index - 37
eISSN - 1744-7976
pISSN - 0008-3976
DOI - 10.1111/cjag.12201
Subject(s) - production (economics) , organic farming , agriculture , product (mathematics) , dairy industry , consolidation (business) , scale (ratio) , function (biology) , agricultural engineering , returns to scale , agricultural economics , milk production , organic production , agricultural science , business , environmental economics , environmental science , economics , mathematics , engineering , microeconomics , food science , geography , zoology , chemistry , archaeology , biology , geometry , accounting , evolutionary biology , cartography
We investigate the role of technology in the decision of dairy farmers to convert to organic production methods. We measure the characteristics of the production technology using data from the USDA Agricultural Resource Management Survey and a recently developed functional form that allows for a global approximation to the unknown distance function without compromising approximation at the data boundaries. Conventional dairies with lower technical efficiency, higher returns to scale, and the ability to easily substitute away from restricted inputs are more likely to convert to organic production. Findings suggest further consolidation in the conventional industry as low‐performing farms exits for the organic industry.