Land use preferences considering resource economics: Case of organic versus conventional wheat production in Turkey

Abstract

The organic agricultural production system is considered to be the best alternative to the conventional system in order to solve agricultural externality problems. The adoption of such systems provide environmental, social, and financial benefits to the related communities. The related community may receive economic benefits although they might not recognize those benefits. The current paper examines prospective organic wheat production's positive impacts on Turkish economy. This research seeks to find the optimal cultivated land requirement to be allocated for organic wheat production, and contributes to the available literature by measuring environmental and social effects using the proxy values of regular wheat production in the country. Results dictate that the social optimum amount of conventional wheat production must be 1.3 million hectares. If the annual negative externality of wheat production, which is 227.5 USD/ha, is taken into account, the total annual external cost would be 1,416,061,536 USD/year. The importance of conversion and superiority of organic farming are stressed in the literature only at the micro-level or farm-level rather than the macroeconomic level. Macroeconomic results examined in the current paper complete micro-level studies in the context of agricultural externalities. The study indicates that macroeconomic efficiency of organic production is higher than the conventional system. However, it is suggested that a mild transition path be implemented for better land conversion in developing countries such as Turkey. The system of good agricultural practices may have some advantages for this path.