Assessment of the Environmental Public Goods of the Organic Farming System: A Lithuanian Case Study

Abstract

Organic farming is a farming system that combines environmental farming practices, a high degree of biodiversity, and the protection of natural resources. All these environmental services are used in society as public goods, contributing to societal welfare. Understanding the opinions of residents on these environmental public goods is essential because they are both consumers and financial contributors to the common agricultural policy. Therefore, it is imperative to further existing scientific knowledge in the field of consumer behaviour. Using Lithuania as a case study, the present study focuses on analysing societal opinion and willingness to pay (WTP) with respect to the environmental public goods (reflected in three components: the reduction in water, soil, and air pollution) of organic farming. This study uses the contingent valuation (CV) method to obtain the WTP for public goods. The median WTP was calculated for multiple environmental public goods from organic agriculture, excluding the protest zero. This study revealed that the residents of Lithuania understood the contribution of organic farming in creating environmental public goods and were concerned about environmental issues. It was crucial for them to have a clean environment with, for example, better drinking water quality, lower air pollution and soil erosion. The application of the CV method showed a median WTP of EUR 24.58 annually per family for environmental public goods. The preference towards environmental public goods differs depending on the socioeconomic characteristics and knowledge about organic farming. These findings provide quantitative information regarding the demand for the environmental effects of organic farming, which could be useful for policy-makers. Such research could also prove useful in setting the future direction of the common agricultural policy. The example of Lithuania was used to present a universal research problem that concerns European countries, especially those in the European Union.