SLI-Report 2003:2

Socio-economic effects of ecological food production

Authors: Helene Carlsen 

The report maps and analyses the environmental effects of ecological crop and animal production, relating them to conventional production. The aim is on the one hand to make an economic valuation of these effects, and on the other hand to make a socio-economic assessment of the economic support to ecological farming.

The estimations indicate that ecological production of grains or milk give environmental advantages compared to conventional production of the corresponding quantities. The main differences lie in biodiversity, the use of pesticides and the accumulation of cadmium; with an advantage to ecological production. It is difficult to assess how big the difference in biodiversity is between the two production systems, especially when expressed in kilo/good. The estimations however indicate that ecological food production has lower environmental costs than the corresponding conventional production.

The ecological producers obtain a price premium when selling their products on the market. This leads to ecological production being more profitable, even without subsidies. Should the government subsidise ecological farming by area-based support when consumers can choose these products themselves if they find them worth their price? The remuneration to ecological farmers today amounts to 1300 SEK/ha. This amount exceeds the value of the effects considered in the study, especially in the northern regions. Yet, the estimations do not comprise all environmental effects, for example it has not been possible to assign an economic value to biodiversity.

Despite an uncertainty in the estimations, it can be established that the support to ecological production is unjustified in the sense that it is wrongly distributed over the country. It is too high in the less fertile regions (the northern part of Sweden) where differences in ecological and conventional production are small. The analysis indicates that it is probably too high also in the rest of the country. To get a more efficient policy, the support to ecological production should be directed towards flat country areas, in the southern part of the country.


Helene Carlsen

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