Market Assessment

The economics of certified organic farming in Tropical Africa: A preliminary assessment, Gibbon and Bolwig / DIIS, 2007

    The paper examines the relative profitability of certified organic and conventional farming operations in tropical Africa as well as differences between organic and conventional farmers in rates of adoption of farming practices an din household factor endowments. The paper is based on three surveys in Uganda of small-holder farmers of respectively, organic coffee, cocoa, and pineapple and of matching control groups of conventional farmers.

    Organic production was in all cases organised on a contract farming type basis in schemes operated by the firm exporting the organic product. The central conclusion from the study is that farms that engaged in certified organic export production were significantly more profitable in terms of net farm income earnings than those that engaged only in conventional production.

    This was the result of generally significant differences between organic and conventional farmers' gross farm incomes, although these differences were further amplified by differences in costs. Income differences related partly to differences between organic and conventional farmers' factor endowments.

    Summary of results
    Preliminary analyses indicated that, among factor endowments, area under crops subject to organic certification (CSC) and numbers of CSC plants had the strongest relations to farmers' sales volume and incomes. As for other factors, yields were strongly related to sales volumes, but average price received was of lesser importance.

    The precise relative contribution of these different factors to sales volumes ad incomes remains to be established in a further paper, however. The results for average net income also show enormous differences in profitability between organic farmers of different cash crops, with pineapple farmers earning three and five times more than cocoa and coffee farmers, respectively. It is worth underlining that, in contrast to the experience in developed countries, we found that organic conversion in tropical Africa is associated with increases rather than reductions in yield, which relates to the low-input characteristics of conventional farming on the continent. Focus group interviews suggest that organic farmers enjoyed higher yields due to more effective farm management technique, but the survey results on rates of adoption of yield-enhancing farming practices could not verify this.

    Associated Activities and Documents
    Market Assessment
    »An overview of the certified organic export sector in Uganda, Gibbon / DIIS, 2006