Comparison between productivity and profitability of organic and conventional production: does the period of analysis matter?
Keywords:
Average treatment effects on the treated, profitability, productivityAbstract
Brazil is the largest market for organic products in Latin America, but only cultivates 0.5% of its land in organic production systems. This may be due to the lower productivity and profitability of organic production compared to conventional production, which was the research objective of the present study. Using data collected in the 2019 agricultural year via face-to-face application of a semi-structured questionnaire to 79 strawberry producers in the Federal District, the average effect of treatment on the treated (ATT) for productivity, profitability and costs using the methods of nearest neighbor/propensity score matching and endogenous switching regression. ATT estimates indicated equal productivity and profitability, but higher costs and revenue for the organic production, suggesting that the absence of economic incentives may be an important barrier to conversion to organic production. As the ATT estimates of Resende Filho et al. (2019) for the 2015 agricultural year indicated equal productivity and costs, but higher revenue and profitability from organic production, it is concluded that the period of analysis matters. Therefore, future studies should seek to control for fixed time effects, possibly using panel data.
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