Economic effects of sustainable agri-food production in Taiwan: Does spatial agglomeration make a difference?
ISSN: 0007-070X
Article publication date: 2 June 2023
Issue publication date: 14 November 2023
Abstract
Purpose
This study investigates the economic outcomes of organic farming controlling for the four major aspects of a cropping system, including climate, genotypes, management and soil. Considering possible variations in treatment responses, this study also presents empirical evidence of heterogeneous treatment effects associated with spatial agglomeration or farm covariates.
Design/methodology/approach
Rice farm households data taken from the 2015 Agriculture Census is merged with township-level seasonal weather data, crop suitability index and average income per capita in Taiwan. To address the selection bias problem, the authors apply the Probit-2SLS instrumental variable (IV) method in the binary treatment model under homogeneous and heterogeneous assumptions.
Findings
It is found that organic farming leads to a significantly positive effect on rice farms' economic performances in terms of cost reduction and profit growth. This positive treatment effect is more sizable with spatial agglomeration. Furthermore, the treatment effect of organic farming is found to vary with the farm characteristics such as farmland area and the number of hired workers.
Practical implications
Two important implications for the promotion of sustainable agri-food production are inferred: (1) establishing organic agriculture specialized zones may benefit rural development; (2) providing economic incentives to small farms to expand their scale may be a more effective policy means to promote sustainable agri-food production.
Originality/value
The findings in this study complement the body of knowledge by drawing insights from the agriculture census data and providing profound evidence of the heterogeneous outcomes of organic farming due to spatial clustering and farm covariates.
Keywords
Acknowledgements
This paper forms part of a special section “Promoting Sustainable Food Production: Challenges, Practices, Impacts, and Solutions”, guest edited by Wanglin Ma, Hung-Hao Chang, Victor Owusu, Puneet Vatsa and Hery Toiba.
The authors are grateful to the insightful comments from the Editor and the anonymous reviewers.
Funding: This research was supported by funding from the National Science and Technology Council (project number: MOST 111-2410-H-002-151).
Citation
Chang, Y.-C., Luh, Y.-H. and Hsieh, M.-F. (2023), "Economic effects of sustainable agri-food production in Taiwan: Does spatial agglomeration make a difference?", British Food Journal, Vol. 125 No. 12, pp. 4249-4267. https://doi.org/10.1108/BFJ-10-2022-0879
Publisher
:Emerald Publishing Limited
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