Journal
AGRICULTURAL ECONOMICS
Volume 45, Issue 3, Pages 313-325Publisher
WILEY
DOI: 10.1111/agec.12067
Keywords
K42; Organic farming; Random effects logit model; Noncompliance; Economics of crime; C25; Effective control system; Q12
Categories
Funding
- CERTCOST Project [207727]
- European Community
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Applying the economics of crime theory, we model the decision of an opportunistic and/or careless organic farmer and derive hypotheses to explain noncompliance. Where empirical data are available, hypotheses are tested. We use data for the years 2007 through 2009 of organic farms certified by Bio Suisse. Imposed sanctions are used as a proxy variable for noncompliance and farm characteristics as explanatory variables. Random effects logit models show that processing activities and livestock diversity significantly increase a farm's sanction probability. Past noncompliances also indicate a higher present sanction probability. Finally, we discuss some methodological issues and suggest a way to organize risk-based inspections more effectively.
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