Do first-movers in the organic market stand to gain? Implications for promoting cleaner production alternatives

Abstract

This study examines the differences in economic performance between the early and late adopters of organic farming practice in Taiwan. The Fuli township in Hualian, Taiwan, serves as the research population to the testing of the first-mover (dis)advantages for the organic rice market. A theoretical model describing farm household’s farming practice adoption decision is proposed to guide the empirical investigation. It is found that the early adopters are committed organic who are mainly motivated by attitude towards environment and health, whereas the late adopters are more of the pragmatic ones most concerned with the economic effects of organic farming. Within the context of the counterfactual causal inference framework, this study further identifies the differential economic outcomes for the two groups of organic farmers. Estimates of the average treatment effect and the parametric test statistics unanimously support the first-mover disadvantages or follower advantages. The results suggest extension services facilitating information dissemination and promoting environmental and/or health consciousness among the crop farmers can help to achieve the long-term agenda of promoting organic agriculture development.