Economic Impact of Organic Agriculture: Evidence from a Pan-India Survey

Anugu, Amarender Reddy, Melts, Indrek, Mohan, Geetha, Rani, Ch Radhika, Pawar, Vaishnavi, Singh, Vikas, Choubey, Manesh, Vashishtha, Trupti, Suresh, A and Bhattarai, Madhusudan, (2022). Economic Impact of Organic Agriculture: Evidence from a Pan-India Survey. Sustainability, 14(22), 15057-n/a

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  • Sub-type Journal article
    Author Anugu, Amarender Reddy
    Melts, Indrek
    Mohan, Geetha
    Rani, Ch Radhika
    Pawar, Vaishnavi
    Singh, Vikas
    Choubey, Manesh
    Vashishtha, Trupti
    Suresh, A
    Bhattarai, Madhusudan
    Title Economic Impact of Organic Agriculture: Evidence from a Pan-India Survey
    Appearing in Sustainability
    Volume 14
    Issue No. 22
    Publication Date 2022-11-14
    Place of Publication Basel
    Publisher MDPI
    Start page 15057
    End page n/a
    Language eng
    Abstract The demand for organic foods is increasing worldwide due to health and environmental benefits. However, there are several unanswered questions, such as: Do organic farmers generate higher profits? Will the cost of cultivation reduce to compensate for low yields? Can farmers practice as per the organic agriculture protocols and obtain certification? The literature on organic agriculture varies widely in terms of profitability, yields and costs of organic products. A few studies have researched site-specific organic agriculture, but none have compared organic with conventional agriculture at larger scale in India. The Indian government has promoted organic agriculture since 2015 through its pan-India scheme—Paramparagat Krishi Vikas Yojana (PKVY). Under this program, there were 13.9 million certified organic farmers in 29,859 organic clusters, covering 0.59 million hectares (about 0.4% of the cropped area in India). This study assessed the implementation process of PKVY and the impact at the farmer level using the Difference-in-Difference approach. An economic surplus model was employed to observe the macro scale using data from an all-India representative sample from 576 clusters for the crop year 2017. The results identified that organic farmers experienced 14–19 percent less costs and 12–18 percent lower yields than conventional farmers. The net result is a marginal increase in profitability compared to traditional agriculture. The economy-wide economic surplus model indicates that there will be a reduction in producer and consumer surplus due to reduced crop yields. However, if the shift from conventional to organic is confined to rainfed, hilly and tribal areas, there will be an increase in both consumer and producer surplus.
    Keyword Alternative farming
    Impact assessment
    Natural farming
    Organic farming
    Process analysis
    South Asia
    Theory of Change
    Copyright Holder The Authors
    Copyright Year 2022
    Copyright type Creative commons
    DOI https://doi.org/10.3390/su142215057
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    Created: Thu, 24 Nov 2022, 18:15:23 JST by Hanna Takemoto on behalf of UNU IAS