The Determinants and Economic Effects of the Adoption of Organic Farming: An Example of Fuli Rice Farmers in Taiwan

• Main Authors: Min Han Tsai, 蔡旻翰
• Other Authors: Yir-Hueih Luh
• Format: Others
• Language: zh-TW
• Published: 2014
• Online Access: http://ndltd.ncl.edu.tw/handle/z9ky7s

碩士 === 國立臺灣大學 === 農業經濟學研究所 === 102 === As a stable source of quality food, agriculture also has the function of maintaining ecological environment and preserving the pristine lifestyle of rural residents. In recent years, in addition to fastening their eyes on environmental issues, the public are attaching more importance to food safety; organic farming has thus become a new mainstream of farming methods. As well, organic farming in Taiwan has experienced fast growth during past decades since the government put efforts in promoting the adoption of this “ecological production management system”, as defined by USDA National Organic Standards Board (NOSB) in April 1995. Eastern areas, especially Yuli and Fuli in Hualien County as well as Chihshang and Guanshan in Taitung County, are the major rice production areas in Taiwan. Because the problem of environmental pollution has been less severe in those areas, organic farming keeps growing steadily in eastern Taiwan. Based on the survey data of Fuli Township in Hualian County, this thesis attempts to provide a synthesis of recent methodological developments in the literature to examine the attitude formation, adoption determinants as well as economic impacts of organic farming. The major objectives of this thesis are three-folded. First of all, making use of the theory of planned behavior (TPB) developed by Ajzen (1985) and Ajzen and Madden (1986), this study aims at finding out the association between the elements of TPB, that is, the relationships between attitudes, perceived social norm and perceived behavioral control. Secondly, taking into account the different effects of TPB constructs and economic concerns, this study assesses the separate influences of these two determinants on the adoption of organic farming. The third objective of this study is to evaluate the economic impacts of adopting organic farming. Applying the propensity score methods proposed by Rosenbaum and Rubin (1983), this study solves the self-selection problem encountered in effect evaluation of technology adoption. Within the context of Neyman-Rubin counterfactual causal inference framework, the so-called average treatment effect for the treated (ATT) is calculated by measuring the differences in income, cost and profit resulting from organic farming. The empirical results are summarized as the following according to the three major objectives. First is that attitude toward environment and health has differential effects on organic and conventional farmers in terms of forming positive attitude toward organic farming. For the conventional farmers, the positive attitude toward environment and health increases the probability of holding positive attitude toward organic farming. However, for the organic farmers, this positive effect is quite small. Dividing the organic farmers into early and late adopters indicate that, relative to the conventional farmers, early adopters’ attitude toward environment and health has negative effect on forming positive attitude toward organic farming, while no significant effect is observed for the late adopters. This result reveals some problem in the development of organic industry at the early stage. The empirical results in the second part of this thesis suggest that, within the context of TPB, Fuli rice farmers’ positive attitude toward information will increase their probability of organic farming adoption. Moreover, while attitude toward environment and health has no significant influence on the adoption decision, perceived social norm exhibits negative effect. The results also indicate economic concern is the major determinant of rice farmers’ adoption of organic farming. A further division of the organic farmers reveals considerable differences between early and late adopters. The results suggest the main motivation of early adopters comes from the attitudinal factors, while economic concern is the major determinant of late adopters’ adoption decision. In the third part, this study applies both covariate adjustment and propensity score matching methods to investigate the economic effects of organic farming. As a result of adopting organic farming, Fuli rice farmers’ income per hectare decrease, on average, by $24,000 NT, and profit per hectare decrease by $2,500 NT as well. Based on the findings of this thesis, some policy implications for the promotion of organic farming can be inferred. First of all, creating a pleasant atmosphere of organic farming or holding some events and festivals to bridge a close connection between the farmers and consumers will help promoting organic farming. Secondly, the empirical results reveal that economic concern is one of the main factors driving farmers’ adoption decision, and organic farming will reduce both income and profit significantly. Raising the purchasing price of organic-certified rice will therein create a stronger incentive for farmers to adopt organic farming. Last, but not the least, the governmental authorities should reinforce the monitoring and traceability system of organic products to prevent the cheating or misconduct of a small number of organic rice farmers.