Organic agriculture and sustainability: environmental aspects.

AbstractWhile positive effects on the environment lie at the heart of the idea of organic farming they are still surrounded by controversy. The question whether positive effects on the environment justify political support of organic farming is especially critical. The paper outlines some of the methodological difficulties in assessing the environmental costs and benefits of organic farming. It is argued that a set of physical indicators should be used to measure the environmental benefits of organic farming compared to non-organic, rather than using monetary estimates. Results from a literature review on the environmental effects of organic farming based on the OECD agri-environmental indicators are presented, which generally show a superior performance of organic farming on a per-hectare scale. The paper critically reviews the hypothesis that a combination of conventional farming plus agri-environmental measures is always more cost-effective in providing the desired public goods than organic farming. Organic farming has advantages with respect to lower transaction costs and a partial internalization of externalities. Lower per area productivity is not a relevant problem as long as set-aside schemes are used to cut surplus production, but it might be in other situations. The paper concludes that there is sufficient justification to support organic farming for environmental reasons. However, this should be combined with agri-environmental measures targeted at all of agriculture.