Economic growth of farms: An empirical analysis on organic farming
2017
Brenes Muñoz, Thelma | Lakner, Sebastian | Brümmer, Bernhard
This article investigates which factors influence the economic growth of organicfarms. Organic farming has experienced a substantial growth in Germany since thebeginning of the 1990s until today. Most organic farms are concentrated in thesouthern region of the country, Bavaria and Baden-Wuerttemberg. While some ofthese farms have expanded their business size, others have contracted, reconverted toconventional or ceased to operate. Using a panel data of 318 farms and a SystemGMM method, the economic growth of organic farms is analyzed. Regression resultssuggest that organic farms with high revenue from agriculture are less likely to growthan smaller farms. Growth is influenced by livestock intensity, multiple job holding,share of grasslands areas, soil quality and agri-environmental payments for organicfarming.
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