Pollution shadow prices in conventional and organic farming: an application in a Mediterranean context

Abstract

Organic farming integrates environmental concerns and criteria within farm management practices in order to reducethe environmental impact of agricultural production. In this paper, the shadow price of two of the main indicators of pollution arising from agricultural practices, nitrogen surplus and impact of pesticides, are calculated and compared in a context of Mediterranean climate and cultures. Results show that it is more costly for organic farms to reduce their levels of pollution emission than for conventional farms. This may be due to the fact that the specific regulations on organic farming restrict agricultural practices to a larger degree than current restrictions affecting conventional farming. These results suggest that organic farming might be an adequate answer to part of the environmental problems provoked by conventional farming.