Study on the economic effect of production free from chemical use

Kis, Sándor

Keywords: organic farming, turning on, profitability

The assumption, that in case of production different from the conventional one, operational and production risk are increasing in farms, is supported by the calculations. Input/output relations undergo a change in each sector and this may have serious financial outcomes, which would importantly determine profit yielding capacity and efficiency of farming. The statement of Offermann and Nieberg is true of the cost structure, according to which essential cost difference between the two technologies can not be measured. By the aid of the calculation, it was successfully verified – in compliance with the opinion of Wookey – that organic production can be as profitable, as the conventional production or even more so. In contradiction to Bmvel’s data, it can be demonstrated, that even a revenues, surpassing the result of conventional production may be realized in organic farms. On the whole, the results obtained strengthen the standing-point of Szente, according to which the profit, originating from organic production may be higher, than that from conventional production, although it fails already to reach the saliently high values, which were characteristic of the earlier years. In production technology, upon the effect of the change in operational elements and elimination of chemical use, increased yield risk is to be taken into account, although at the same time, the possibility of a more successful operation will increase through the market premium price. Subsidy of each technology is different, which means, that allowances associated with the expectable future much better environment-saving technologies will further increase profitability. Also market changes may promote this process, since consumers and institutions become increasingly disposed to take a turn to goods, produced free from chemicals. It is indicated also by statistical data, that more and more producers are dealing with organic production and also the size of areas turned on organic farming is continuously increasing. The rhythm of the development of organic markets is still lagging behind this, but the possibility is open to the agricultural sector being in process of transition. Conventional agriculture is yet unable to produce commodities, suitable for satisfaction of all demands of consumers in every respect, and also efficiency and profitability of production are very low, several sectors can be operated with loss only.