Meritorik und Transaktionskosten: Ökonomische Argumente für eine Förderung des ökologischen LandbausMerit goods and transaction costs: Economic arguments for policy support of organic farming

Abstract

In response to conventional agricultural economists, who criticize state-subsidized organic farming by arguing that ecological benefits can be attained more efficiently, this paper presents two new arguments for policy support of organic farming. First, it presents the widely-held positive opinion of organic products and the apparent contradiction that few people are willing to buy them. Along with the calls for support of organic farming, this makes organic food a so-called individualistic merit good. Secondly, it is argued that supporting organic farming is worthwhile because it is a broadly recognized agricultural production system and it is environmentally friendly - suggesting, in the end, reduced transaction costs.