Organic production in the Republic of Serbia: Economic aspects

Abstract

The authors of this paper discuss the concept of organic agricultural products with an emphasis on economic performance. Research has shown that the total cost of production on organic farms is on average lower than that of conventional farms. Variable costs are 30 -40% lower. On the other hand, fixed costs are 45% higher than those from conventional production. An analysis of the economic situation of organic farms in Europe shows that, on average, they have profits or gross margins similar to those of comparable conventional farms, i.e. within the range of +/-20% of profits achieved on similar conventional farms. A survey conducted among organic producers on the territory of the Republic of Serbia showed that gross margins in organic production were on average 20% higher than in conventional production. Consequently, the economic aspect of organic production is more favorable than conventional production for the shown cultures.