Productive, Environmental and Economic Effects of Organic and Conventional Farms—Case Study from Poland

Abstract

Due to the changes in the agricultural sector, there is a demand among policymakers, administration, advisors and farmers for comparisons of the economic efficiency of organic versus conventional farms and their environmental impact. The authors of the paper hypothesised that in some conditions, organic farms can reach similar productive and economic results as conventional farms and, at the same time, achieve better environmental effects. The aim of the research was to compare the production, environmental and economic effects of selected organic and conventional farms from eastern Poland (mixed, crop production, animal production). The basis for the comparative analysis was the data from 12 farms obtained using the questionnaire method (direct interview) from the years 2020 to 2021. The yields of cereals in the tested organic farms were about one-third lower than the average obtained on conventional farms. Total organic crop production in cereal units per ha was 43% of conventional production. Balances of NPK indicated surpluses or deficiency, which suggested that in both systems nutrient management should be improved and optimised. The compared groups of organic farms generally had higher economic efficiency—both with and without subsidies—than conventional farms, despite the fact that the latter obtained significantly higher incomes. Gross farm income on conventional farms was higher than on organic farms by 28%, but conventional farms had higher direct costs by 332% than organic ones. As a result, the economic efficiency of agricultural production of organic farms was higher by 59% than conventional farms. The lower level of inputs incurred on organic farms was the main factor determining their high economic efficiency. Organic farms pursuing an intensive model of agricultural production (milk production), but also with specialisation in crop production, proved to be the most economically efficient. Despite diversified production, reducing the income risk, the mixed production, both organic and conventional, in the studied set of farms turned out to be the least profitable, indicating the need to support it. It is suggested that moderate specialisation increases the efficiency of management in organic farming.