Comparison of conventional and organic arable farming systems in the Netherlands by means of bio-economic modelling

Growing environmental concern in society combined with policy stimuli has encouraged farmers to switch from conventional to organic production technologies. However, so far not many have made this switch. This raises the question, what could lie behind the decisions of farmers concerning conversion. A first step in studying this decision is to compare fanning results in an organic situation with conventional farm results from technical, economic and environmental points of view. In this paper a linear progratruning model of a conventional arable farm and an organic arable farm are presented. The models include environmental externalities such as losses of nutrients and pesticide use, the levels of which can be influenced by using different production structures (cropping plans). With the conventional model two different crop rotations (3-year and 4-year), and with the organic model one rotation (6-year) are analysed and the results of these three situations are compared. The example farm modelled is typical for the central clay region in The Netherlands. The results show that organic farming leads to less intensive land use, better environmental results and better economic results. Expenditure on hired labour is much higher in organic fanning which also leads to higher variable costs. Prices for organic products are higher than for similar conventional products, but lower yields and the less intensive cropping plan mitigates the effects on total revenues.