Organic Farming - Economics

Economics

The economics of organic farming, a subfield of agricultural economics, encompasses the entire process and effects of organic farming in terms of human society, including social costs, opportunity costs, unintended consequences, information asymmetries, and economies of scale. Although the scope of economics is broad, agricultural economics tends to focus on maximizing yields and efficiency at the farm level. Economics takes an anthropocentric approach to the value of the natural world: biodiversity, for example, is considered beneficial only to the extent that it is valued by people and increases profits. Some entities such as the European Union subsidize organic farming, in large part because these countries want to account for the externalities of reduced water use, reduced water contamination, reduced soil erosion, reduced carbon emissions, increased biodiversity, and assorted other benefits that result from organic farming.

Traditional organic farming is labor and knowledge-intensive whereas conventional farming is capital-intensive, requiring more energy and manufactured inputs.

Organic farmers in California have cited marketing as their greatest obstacle.